Business immigration falls short of target
Despite reduced requirements, investors shy away from B.C.
Published: Monday, May 05, 2008
When B.C. first started trying to attract business immigrants through its so-called provincial nominee program, it set a very high bar, believing that candidates, with a minimum net worth of $2 million and at least $1 million to invest, would flock to life in lovely Lotusland.
But that did not happen.
In its first year, 2002, the program approved a grand total of zero applications. The next year, it eked out a scant 26 of them. Since then, requirements have been slashed and tweaked — candidates can now commit just $200,000 if they are willing to set up shop outside Metro Vancouver — but there is still hardly a flood of approvals in the category.
Recently, as the province celebrated the program for bringing in a total of more than 4,600 skilled workers, the same stats also show a decline in its track record for business immigrants, with a measly 61 for 2007-08.
“Certainly, we are exceeding our targets for strategic occupations. But we are falling short on our targets for business immigrants,” said Minister of Economic Development Colin Hansen in an interview.
By many accounts, one of the biggest deterrents to business immigration programs is competition from other provinces, and by Ottawa itself.
“We know, anecdotally, that B.C. is, in many cases, the destination of choice, even though business immigrants may come into Canada via a program in one of the other provinces where requirements are lower,” said Hansen.
Specifically, he named Manitoba. It has the longest-running, most-established of these provincial nominee programs. But, more to the point, it has one of the easiest financial hurdles to clear. Candidates need only a personal net worth of $350,000 and the intention to invest $150,000.
Until last September, B.C. required candidates to invest $800,000, down from the original $1 million, but still high compared to Manitoba. Now, the threshold has been pushed lower to $400,000 for businesses within Metro Vancouver (and Abbotsford), and to $200,000 for those outside that boundary. Net-worth requirements dropped in tandem, but are still slightly higher than what Manitoba demands.
The B.C. program is generally more restrictive in other ways. “A high-net-worth individual with $800,000 can give the [federal] government $400,000, and they don't have to do anything. And they get their landed status,” said Brian Tsuji, a Vancouver-based immigration lawyer.
By comparison, in B.C., “you have to apply, get a work visa, and then you have two years to do what you promise. And if you don't, your work visa is not renewed. It's a two-step process, [a] more conservative approach,” said Tsuji. “[In B.C.], we want to see that you have done something to earn your permanent status. Other places may be more inclined to provide the visa without as much of a testing-out period.”
This is all in great contrast to an earlier heyday of investment immigration — in particular, from Asia to B.C. in the 1990s. Large syndicates of investors, many fleeing uncertain political futures in Hong Kong and Taiwan, eagerly and controversially opened their wallets to secure Canadian passports. Even though many of the malls and hotels developed with that money, especially in the city of Richmond, still exist and commercially thrive, the oft-described “passive investment schemes” used to fund them at the time were unregulated, and rife with well-publicized fraud.
The federal government some time ago clamped down on these, but as recently as a few months ago, it was once again busy going after business immigration programs run by provincial governments in Nova Scotia and Prince Edward Island for the same reasons.
(The federal government itself runs an immigrant investor program. Business immigrants pay money directly to Ottawa, which splits it among participating provinces. Then it gets earmarked, somewhat vaguely, for general economic development.)
As provincial nominee programs elsewhere in Canada slowly get forced to become more rigorous and, at the same time, as B.C. has adjusted some of its net-worth and investment requirements, the playing field may eventually level out.
“We think that we will see our numbers increase next year and in the future,” said Hansen. He added that, to be fair, the B.C. program has, of late, been more focused on bringing skilled workers rather than business immigrants because of pressing labour shortages in many sectors.
Currently, upwards of 45 per cent of these business immigrants arrive from China.
Jeff Wu and his sister, Dan Wu, for example, were real estate developers in Hangzhou, China, before immigrating to Abbotsford in 2005 to start C-Sky Windows via B.C.'s provincial nominee program. Today, the company is based in Coquitlam, employs 12 people and has sales over $1 million, according to Wu.
“When we came, my sister saw an opportunity in the [nominee program]. There was also lots of activity in the custom renovation and new construction business,” said Wu. “We looked at other provinces, but chose B.C. for its proximity to China.”
Interestingly, Abbotsford saw a boomlet of these nominee program businesses, with 55 out of the total 355 across B.C. launched there. That may be only 15 per cent, but is more significant on a per-capita basis.
In 2005, the nominee program allowed businesses outside Metro Vancouver to qualify for much lower investment requirements, that is, just $200,000 compared to $400,000. Abbotsford, being the first place outside that border, benefited. In fact, there were more nominee program business immigrant approvals (105) that year than any other before or since. Today, Abbotsford is lumped together with Metro Vancouver, pushing the frontier further out to Chilliwack.
“Despite the low numbers, I think we do need this program,” said Tsuji, the immigration lawyer. “In particular, the regional program is important. In these places, outside of [Metro] Vancouver and Abbotsford, business immigrants can really make a difference.”
By the numbers
B.C. Provincial Nominee Program approvals by fiscal year
Fiscal Business Skilled
Year Immigrants Workers
2001-02 0 88
2002-03 0 181
2003-04 26 241
2004-05 105 381
2005-06 85 721
2006-07 78 1,254
2007-08 61 1,820
TOTAL 355 4,686
Source: Ministry of Economic Development
Countries of origin
Country of origin for business immigrants arriving in B.C. via the provincial nominee program
China 46 per cent
U.K. 17 per cent
Korea 13 per cent
Source: Ministry of Economic Development