Canada was once the global leader in attracting business immigrants.
In 1978, Canada’s new Immigration Act took effect, which was revolutionary for a variety of reasons.
It was the first act to spell out Canada’s immigration classes: economic, family, and humanitarian.
It also introduced new programs that have since had a major influence around the world.
For example, the act introduced the world’s first Private Sponsorship of Refugees (PSR) Program, which enabled Canada to welcome nearly 70,000 “Boat People” from Vietnam, Laos, and Cambodia the following years, and refugees from many more countries ever since. The program has been adopted globally and contributed to the people of Canada receiving the prestigious Nansen Refugee Award from the United Nations in 1986 (Canada is the only country to earn this honour).
The act also introduced a business class of immigration, paving the way for the federal government to launch the Entrepreneur Program and Self-Employed Persons Program in 1978, and the Immigrant Investor Program (IIP) in 1986, programs which have since been emulated by some 70 countries.
The Entrepreneur Program allowed entry to immigrants who planned to start a business in Canada while the IIP was available to those who would make an investment. Initially, the IIP allowed immigrants to invest in private sector projects but the federal government eventually mandated investor funds to only be managed by provincial governments. The IIP required a five-year fully refundable investment which provinces could use over this period towards economic development projects.
Both programs proved extremely popular, resulting in Canada welcoming over 10,000 immigrants annually under them beginning in the late 1980s. At its peak, Canada welcomed some 20,000 business immigrants in a year through all three programs, with the overwhelming majority being under the Entrepreneur Program and IIP.
Business programs were particularly popular among wealthy Asians seeking stability in Canada. Hong Kong was a major source due to immigrants seeking certainty prior to the return of its sovereignty from the UK to China in 1997.
At one point, business immigrants accounted for one-third of Canada’s economic class admissions and up to 13 per cent of all immigrants to the country.
Today, business immigration comprises a tiny amount of federal and provincial newcomer levels. Under the Immigration Levels Plan 2024-2026, the federal government is seeking to welcome up to 6,000 business immigrants per year, which comprises 2 per cent of economic class targets and 1 per cent of overall immigration levels.
In April, Canada announced it would reduce the intake of the Start-up Visa Program and would stop accepting new applications under the Self-Employed Persons Program. Quebec has imposed French-language requirements on business applicants, while Ontario has recently suspended intake to its entrepreneur stream. Similarly, the intakes by other provinces and territories is miniscule.
So, what happened?
There are two major factors at play.
First, both federal and provincial governments have found business programs to be a headache to manage. On the entrepreneur side, government continues to struggle to determine selection criteria that will predict an immigrant’s ability to start a successful and scalable business that will create jobs and other significant economic benefits. Previous federal research has argued that the job creation and overall economic benefits have been minimal.
When interest rates plummeted following the Global Financial Crisis, Immigration, Refugees and Citizenship Canada (IRCC) research showed provinces were scared to invest IIP capital since they were worried they would lose the money and be on the hook for the principal they owed immigrant investors after five years. This upset the federal government, contributing to it terminating the IIP in 2014 (along with its Entrepreneur Program). Meanwhile, some provincial streams were used by some immigrants to obtain permanent residence from jurisdictions they had no intention to reside in. Other issues have included actors charging high fees to business immigrants to support their entry into the country.
Second, Canada became globally uncompetitive. Following the Global Financial Crisis, dozens of countries launched business streams to support economic growth. Whereas Canada previously had a handful of competitors when it led the world in business immigrant attraction, it must now compete among many advanced economies including the United States, United Kingdom, various European Union Countries, Australia, and more. Canada’s onerous program requirements and slow processing times have seen the country fall well behind the pack.
Is there a future for business immigration in Canada?
I believe the answer is yes.
However, for us to be successful, we will need significant will among our governments to explore how we can get business immigration right. At present, there is a lot of skepticism, fatigue, and apathy within government when it comes to business immigration due to Canada’s previous failures. But in addition to downside risk, there is upside risk, and hence, there are common sense ways Canada can design business streams to support economic development.
The answer to fixing Canada’s business streams isn’t easy, but here are a few things we can consider if we want to improve our efforts to attract more business immigrants:
First, we need to determine what we want to achieve. In recent years we’ve tried to achieve everything with our business streams. We’ve sought to attract tech entrepreneurs, self-employed farmers, entrepreneurs to smaller jurisdictions, francophone entrepreneurs and investors, among other goals. These are all important objectives, but it has been difficult to achieve them at scale due to a lack of focus.
Second, we need to determine an optimal points system or program criteria to screen business immigrants. We’ve tried this throughout the decades and it hasn’t yielded results, but that doesn’t mean we should give up. We should continue to refine points systems to identify what mix of age, education, language skills, work experience, among other potential factors can help us better identify high-potential entrepreneurs. Statistics Canada has a lot of longitudinal data that can assist us.
Third, we need much quicker processing times. Canada’s average processing times of three years or more for business class permanent residence is too slow amid the internationally competitive landscape. The Global Talent Stream is a good example of Canada being able to bring service standards down to a globally competitive level (the stated service standard is just 10 days, although anecdotally, it takes about one month or so for an individual to obtain their work permit under the stream).
Finally, we must be willing to fail and iterate until we get business immigration right. It is very common in business to fail and try again until you eventually find success. Unfortunately, Canada is very risk-averse when it comes to designing its business streams. We use a cookie-cutter approach for provincial entrepreneur streams and will quickly shut down new streams if they do not show results within a short period of time. We then give up and call it a day. There are countless examples of business immigrants succeeding in Canada and yielding huge economic benefits. As such, we should pursue efforts to reform our business programs with the same vigour we do on our skilled worker programs.
Governments across Canada do not give up if a skilled worker program doesn’t pan out, rather, they constantly introduce new streams to get the results they want. Why should our business immigration efforts be any different?