Q&A with Chris Alexander, Canadian Minister for Citizenship and Immigration

PUBLISHED : Thursday, 20 March, 2014, 7:45pm
UPDATED : Thursday, 20 March, 2014, 7:51pm

What were the main reasons for scrapping the immigrant investment visa?

First, it was a programme that wasn’t meeting its objectives. In 1986 when it was established, it did serve some of the purposes for which it was designed and we’re very proud of the investors that actually did come to Canada, resided in Canada, have became Canadian citizens and have contributed strongly.

Secondly, there have been a large number of people, who qualified under the programme, who didn’t reside in Canada. And that really wasn’t an issue so much in Hong Kong and for Hong Kong applicants as it was for mainland applicants and some from elsewhere in the world.

That meant that when we measured the results of our progress because we follow up on immigrants that come to Canada. We look at how they’re doing in terms of education, employment. The results weren’t good compared to our other economic immigration programmes and finally we also thought it had serious shortcomings in terms of the impact the so-called investment was having. It wasn’t really an investment. It was a loan, strictly speaking, to the government of Canada, which was then distributed among the provinces.

And last time we did the numbers, only about half of the resources distributed to the provinces had been actually invested in productive projects. So the amount was small. The investment performance was weak. We think there are much better ways of attracting investors to Canada and putting their resources to work.

I guess I’d add a fourth reason why it was not a great programme. There was a long backlog. It was going to take a minimum of six to seven years, for some people nine to 10 years, to come through the programme. For busy people with investments, with projects, with careers on the go, and often at the most intense points in their careers, that wasn’t fair.

What were the programme objectives were and how long had they not been met?

Well, it was an immigrant investment programme. Instead, we were getting soft loans from absentees.

How long had you identified this as a problem?

I think in the early years, in the late 80s, early 90s, it seems to have been meeting its objective.

In the later 90s, early part of this century, it started to attract fewer people who actually resided in Canada.

And we saw in recent media coverage, a large number of consultants on the mainland admitted that they were happy to work with people to ensure they benefitted from the programme without actually meeting the residency requirement.

Canadian permanent residence requires residency for the required number of years.

Most people who immigrate, the huge number who’ve come from Hong Kong over many decades, respect those rules and we want the basic criteria to be respected in all of our immigration programmes.

Do you know how many of the mainlanders are not meeting the residency requirements?

No, I don’t. But I do know that there are thousands of investigations underway for people who have, not necessarily not met the terms of this programme, but who acquired Canadian citizenship without actually living in Canada for the required number of years. That’s unacceptable.

I wouldn’t say that was the principal reason, though, for ending this programme and eliminating this backlog. There were shortcomings in terms of the nature of the investment. The size of the backlog was an almost insuperable obstacle.

And then thirdly, we had an integrity problem in that a significant number of people found ways to get around the residency requirement. And that essentially means you’re giving people status in Canada without actually benefitting from their presence.

I read recently how there might be double checks now on both side leaving and coming back into the country to try and tackle tax.

Many countries in Asia have had this for a long time. The government can know and check both when you’ve arrived in the country and left the country, so if there is a tax requirement or an immigration requirement, they can find out when you were in the country.

We haven’t had that data available as we tried to check the records of people under these various immigration programmes. As of next year, we will have them.

Will there be any repercussions for any of the investors who have gained permanent residency without meeting those requirements?

Anyone who has respected the rules will have absolutely no problem, so I don’t anticipate a huge wave of new investigations.

Or they can wait a couple more months until we announce this immigration investor venture capital pilot, which will be a larger investment in an at-risk project focused on the start-up side of the venture capital spectrum. And that’s similar to what are peers are doing in Europe, Australia and elsewhere.

Do you have any more information about this new programme?

It will be more than twice the amount we’re talking about now. The details will have to come when we actually announce it because that’s only fair.

But it’s going to be a venture capital investment. We’re essentially going to say to investors, “In return for permanent residence, in return for the opportunity to do business with status from Canada, we’re taking your money for a good long time to help create jobs, growth, opportunity in Canada and for global businesses, we hope, through venture capital-focused that will be managed in Canada, and privately managed, not managed by the government.

Do you foresee the duration of the loan to be more than five years then as well?

I think it will be more than the kind of duration we’ve seen up until now. Again, we still have consultations to do at home, so I can’t give you a number. But it’ll be on the longer side because that’s what’s needed to drive growth of start-ups in all of the new fields that we know are the key to the future, whether it’s internet-based companies, biotech companies or entertainment, animation, film, television-related start-ups. This is hugely dynamic and competitive around the world.

We have very vigorous start-up hubs in Vancouver, in Calgary, in Toronto, in Montréal and in many smaller Canadian cities like Waterloo. But they need even more capital than they’re getting right now and so this will help us fill that gap.

Will residency and language requirement be more stringent as well?

Probably not terribly stringent. Language is important. Everyone who comes to Canada with working French or English does better and it’s easier to understand the business environment. It’s easier make partnerships. It’s easier to understand government regulations. It’s easier to function. But we respect the fact that not everyone starts from the same point of departure and we give a lot of English second-language support to those who don’t have a very high level when they arrive.

Will there be regional options for the scheme?

No, these will be pooled funds initially, so they’re going to have to be managed by professional private-sector investment managers in financial centres where those people exist. And that is quite a few Canadian cities now. We’ll have a competition to select who the managers will be, but I don’t think we’ll be directing the investment beyond that. We want it to be privately managed and directed and we want the managers to consider all of Canada their potential field for investment.

There are very exciting start-up ventures happening even in rural Atlantic Canada, about as far in Canada from Hong Kong as you can get. And believe me, there are Hong Kong and Chinese students, entrepreneurs, investors who are part of those small ecosystems driving this forward.

How much choice do investors have in terms of what they invest in and where?

Under the pilot, it’ll go into a single fund, so they won’t have choice. But in subsequent offerings of the pilot and when we turn it into a programme, we will certainly listen to the advice and the feedback from all of these immigrants.

Is there any news on the future of Quebec immigrant investor programme?

There is a Quebec election underway. Quebec delivers its own programmes, so it’ll be up to the Quebec government to decide what to do with its Quebec immigrant investor programme. For the moment, it continues as it was.

Is the Canadian government trying to control immigration in any way?

Canada may be the only advanced economy with that high standard of living that has not pulled back on the scale of its immigration programmes in any way and that has, on the contrary, expanded them. From 2006 to now, including those three or four years of serious financial crisis, we have sustained the highest levels of immigration in Canadian history. I’m talking about absolute numbers here.

Our biggest challenge coming into government in 2006 was that we had enormous backlogs, approaching 1 million people in our backlogs. As of now with this recent move to eliminate [the immigrant investor programme and the federal skilled workers backlog], we will be under 400,000.

What is reaction to the mainland applicants who are trying taking the government to court?

Our reaction is that we want Chinese investors in Canada and the door is open, the pathways are multiple. They should take those pathways.
We are making these changes for them, to make it easier for them to come.

China was our largest source of immigrants in 2013, something like 34,000 people out of an overall immigration level of about 260,000.

We are pursuing a strong partnership with Hong Kong and with mainland China in all fields. Our economic relationship is already approaching CA$75 billion million. The human ties, with 1.5 million Canadians tracing some of their origins to China, are already huge and as I say, because of these programmes, they’re growing. We don’t wan people waiting six or seven years to come as investor or an economic immigrant. We want, as of January 1 2015, to process economic immigrants in six months.

So why would anyone wait around, often paying consultants and lawyers large sums of money, in a backlog for almost a decade to become an investor to Canada when the opportunity to invest is open right now. The number of immigrants from Hong Kong and China has never been higher and we’re about to create new pathways, such as the immigrant investor venture capital pilot, that will be better and faster than ever.

Do you think they have a case?

We face litigation all the time. But in some of the coverage of the press conference they held, some enterprising journalist contacted some of the consultants and lawyers who had been working with these prospective immigrants and by one journalist’s estimation, eight out of ten of these were consultants, lawyers were willing to help these candidates succeed in the programme but without having to reside in Canada.

We don’t have that with kind of issue with lawyers and consultants in Hong Kong. We have that issue to a lesser and lesser extent with lawyers and consultants in Canada because we’re regulating that profession. And my appeal to those in Beijing, anywhere on the mainland, who are interested in Canada, is leave the consultants and the lawyers to one side. Look at our website. Talk to people who have immigrated to Canada. It’s easier than you think. The pathways are there. It’s definitely first come, first served, but we are serving a very large and growing number of Chinese citizens.

How do you respond to accusations mainland investors have been making home prices unaffordable in Vancouver and elsewhere?

The impact of this one programme is negligible to zero in recent years. The impact of Canada’s status as the only country of its size with a triple-A positive credit rating from all three agencies, as the country with the most stable financial sector in the world as rated over the past five or six years by the World Economic Forum, our status as a relatively successful safe haven through and even after the global economic crisis that has definitely influenced decisions by people around the world to buy property, invest in real estate in Toronto, Vancouver, Montreal - just as the stability of Hong Kong has made this a wonderful destination for real estate investment over the long term.

It’s fundamentals that attract investment, not immigration programmes. And you cannot reduce our policy on immigration to any one programme. It is a portfolio of programmes. The numbers and have never been greater. The skill level, the talent level has never been higher, but we’re doing it on the basis of innovation and reform.

Do you think there is resentment against investor migrants who buy their way into Canada?

We have a level of diversity and a level of support for immigration in Canada that is, in my opinion, unequalled in the world. There are voices in the United States, there are certainly voices in Europe, there are voices in Asia that really are negative about immigration. You will not find that point of view organised or prominent in Canada at any level.

You’ll hear all kinds of anecdotal information, but the reality of Canada is that immigration is seen as part of our national vocation. And not just in the big cities, even in rural parts of the prairies, even in small towns in Atlantic Canada that haven’t had immigration for 100 years or 150 years, people will come up to me as Minister of Immigration and say, how do we get more people here. Because they know the demographic challenge they face, they know the potential our country has to grow even faster and they want to compete and succeed in the global marketplace for migrants, for talent. Everyone in Canada has an immigration story, not just in the abstract, in their family. The country has only grown on 10 million square kilometres to the population we have because of strong immigration in every generation. I think the strength of our economic fundamentals today justifies an even stronger commitment to immigration.