Super rich investors stuck in immigration limbo
Applications frozen as federal government overhauls Immigrant Investor Program
By Fabiola Carletti and Janet Davison, CBC News Posted: Dec 10, 2012 7:58 AM ET Last Updated: Dec 11, 2012 10:33 AM ET Read 519
Jade and Jacob Zhou, seen here with son Jerry, have held off expanding their business in hopes of coming to Canada from China as immigrant investors. (Courtesy of Jade and Jacob Zhou) Facebook
Chinese businessman Jacob Zhou was ready to hand over $400,000 in 2009 to meet the Canadian government’s financial requirement to bring his multimillion-dollar autoparts manufacturing operation, and his family, to Ontario.
Three years later, Zhou, 41, is still in China. He’s also in limbo, caught in an immigration backlog along with thousands of other millionaire businesspeople around the world who are trying to enter Canada under Citizenship and Immigration Canada’s Immigrant Investor Program.
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“It’s a little bit complicated for me right now,” Zhou said in an interview from Beijing.
The uncertainty has made it more difficult for him and his co-owners — his wife, Jade, and another man — to plan for the future of a business that makes specialized car parts, employs more than 20 people and had sales last year of $2.5 million.
Expansion plans for the company have been put off, but other preparations have gone full steam ahead as the Zhous remain hopeful they will be able to move to the other side of the world.
“We have prepared this position for many years,” Zhou said.
His son, Jerry, 14, has been working hard learning English. Jacob and Jade have been looking for business opportunities and potential customers in Canada.
“We adjusted our lifestyle to fit in Canada in the future,” says Zhou.
He just wasn’t counting on the fact that Canada might have a change of heart.
The Immigrant Investor Program, which has been criticized as a way for people to buy their way into this country without contributing much to the national economy, has been in bureaucratic limbo since an overhaul was announced earlier this year.
Canadian immigration targets 2013
Economic categories — 158,600 immigrants, 62.3 per cent Family categories — 73,300 immigrants, 27.2 per cent Humanitarian categories — 28,500 immigrants, 10.5 per cent
Total immigrants — 260,500
Source: Citizenship and Immigration Canada
No new applications have been accepted since July 1 and won’t be until further notice.
Those that were in the pipeline are still being processed, but there’s no indication when applications like the Zhous might surface.
By June 2012, the backlog was down to 85,598 people. As of 2011, the backlog was 91,248 people, representing 26,158 investors and 65,090 family members. If admission levels remained at current levels, CIC says it would take nearly 10 years to process the existing applications.
From January to June 2012, the government processed a total of 6,973 applications under the program: 5,230 were accepted, 576 were rejected and 1,167 were withdrawn.
Under the program as it was set up when Zhou applied, investors had to provide an investment of $400,000 and have a net worth of $800,000. In 2010, the government doubled those requirements.
Target for critics
That investment requirement – and the perceptions around it — made the program a target for critics, who have said it is only a way for people to buy their way into Canada — or drop their kids off for an education.
Some observers have questioned where the money from investors goes once the federal government receives it.
CIC says it is allocated to provinces participating in the program. Provinces guarantee repayment to the investors after five years.
In April, Immigration Minister Jason Kenney announced an overhaul of the program and suggested it could be better focused to create more jobs.
“Canada’s Immigrant Investor Program undervalues the importance of Canadian citizenship and fails to ensure that new investors are investing actively in the Canadian economy,” Kenney said at the time.
CIC is now considering setting up new business immigration programs, and if the government decides to proceed with a new investor program, it would be designed to complement — not replace — the existing one while targeting a “higher-value global investor,” the department said in an email to CBCNews.
“Unlike the current program, which essentially requires a five-year interest-free loan to provincial governments, the investor would be actively involved in managing their investment and would bear the associated risk, for example, by providing venture capital to the private sector.”
For potential immigrants such as Zhou, however, the limbo has only served to ratchet up the worry that they may not get a chance to come to Canada at all, particularly if Kenney chooses to wipe out the backlog completely, as he did with a different immigration stream, the Skilled Worker Program.
(Kenney has said those whose applications were wiped out are welcome to reapply.)
‘[W]here I disagree with the minister is that you don’t knife the people who have been in the queue.’
— Toronto immigration lawyer Tim Leahy
Toronto immigration lawyer Tim Leahy has taken up the case of Zhou, five other Chinese investors and three investors from Spain, Germany and the United Kingdom who would like to bring their businesses to Canada.
In documents filed in Federal Court in late October, Leahy asks for a judicial order requiring the investors’ applications under the Immigrant Investor Program be assessed within one year. He’s also seeking $5 million in compensation from the federal government if the applications aren’t considered.
Leahy says the Immigrant Investor Program can and should be improved.
“That I agree with the minister on. But where I disagree with the minister is that you don’t knife the people who have been in the queue.”
For its part, CIC says the “pause” on accepting new applications will allow the department to work through the large backlog of applications, and shouldn’t affect annual admissions under the program.
Proponents of the Immigrant Investor Program say it offers a way to boost the Canadian economy, particularly because of its ability to bring in people who have investment capital, can create jobs and won’t be a drain on the Canadian health-care system because of their relatively young age.
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Meanwhile, changes to Canada’s Federal Skilled Worker Program are expected to give younger, English and French speakers with Canadian experience a boost.
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But Toronto immigration lawyer David Rosenblatt, who says he’s seen potential investors wait five years and then give up on their applications, says any wait longer than two years should be considered unreasonable, and that the focus should only be on those “who are going to create employment.”
From Rosenblatt’s perspective, increasing the number of immigrant investors could have economic advantages for a country that faces the prospect of rising health-care costs because of an aging population.
“You look 10 or 15 years down the road — we need to have a very strong economic engine to create wealth to support this major problem that’s coming down the pipe and so what’s the solution?” he asks.
“It’s so easy for the government who have offices around the world to just turn the tap on and bring people in.”
Back in China, Zhou says it will be a “big shock” for him, his wife and son if their application is erased and they don’t have a chance to come to a country that attracted them because of its good social benefits and democratic values.
Still, there is a stoicism in Zhou’s voice as he considers his prospects and the fact that his Canadian dream may not come true.
“Emotionally I think it will be a pity not to live in Canada. It’s quite difficult to tell,” he says.
“Canada is a good place for people to move to. If we get chance to move to Canada, it’s quite good for us. We will be very happy to have the chance to be there. If the chance disappears, maybe we will try our best to offer our kid.”