Category Archives: PNP investor program

Immigration Minister to Visit Silicon Valley to Promote ‘Start Up Visa’

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Waterloo, Ontario, sometimes called Silicon North, is one of Canada’s major tech centres. Citizenship and Immigration Canada hopes the new Start Up Visa encourages foreign technology entrepreneurs to start companies in the country

Canadian Citizenship and Immigration Minister Jason Kenney will be visiting California’s Silicon Valley on Friday for a four day trip intended to promote Canada as a place to live for the region’s entrepreneurs.

According to an article in San Jose’s Mercury News, a billboard is currently appearing near Silicon Valley advertising Canada to foreign tech workers struggling with H-1B visa restrictions:

On Tuesday, just days before Kenney was set to tour San Francisco and the South Bay to promote his new visa for startup entrepreneurs, a giant red maple leaf emerged on a billboard off Highway 101 on the route from San Francisco to the heart of Silicon Valley, part of a Canadian advertisement encouraging tech workers here temporarily to migrate north permanently.

Modeled on an idea first introduced but never passed in the U.S. Congress, Canada’s new “startup visa” grants permanent residency to entrepreneurs who can raise enough venture capital and start a Canadian business.

“H-1B problems?” asks the South San Francisco billboard, referencing America’s temporary visa for skilled foreign workers. “Pivot to Canada.”

Citizenship and Immigration Canada (CIC) hopes to capitalize on the frustration tech companies in the U.S. are feeling over immigration restrictions on foreign technology workers and encourage them to relocate to and invest in Canada.

The eventual goal is to help foster the development of a Canadian equivalent to Silicon Valley.

One challenge that CIC faces in this mission is the country’s top marginal income tax rate, which is significantly higher than that of the U.S. A Canadian entrepreneur can look forward to paying about 50 percent of their income to the government if they succeed in joining the top bracket of income earners.

Compensating for this disadvantage, the federal government is offering a perk that no other advanced economy offers foreign entrepreneurs: permanent residency status.

For foreign tech workers in the U.S. anxiously awaiting the six year limits on their H-1B visas, immigration to Canada offers a chance of stability that only permanent residency can provide.

Also working in Canada’s favor is the perception of being a safer country than the U.S., with significantly lower violent crime rates, particularly homicide rates. A better fiscal situation, with a much lower deficit to GDP ratio than the U.S., also gives foreign nationals more confidence in the country’s economic future.

Regardless of how successful CIC’s headhunting campaign in Silicon Valley ends up being, the federal government has a lot of ground to make up for, with total venture capital funding in all of Canada in 2012 coming to $1.5 billion -less than 15 percent of the $10.9 billion worth of deals that happened in Silicon Valley last year.

Immigration Pushes Canadian Province’s Population Growth to 40 Year High

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Cold winters have historically discouraged Canadian immigrants from settling in Manitoba, but a path to permanent residence through the Manitoba Provincial Nominee Program has increased the number of immigrants arriving in Manitoba and led to its largest population increase in 40 years this year

The population of Manitoba, a province in Canada’s prairie region, increased by 16,227 people over the last 12 months, which is the most in 40 years, according to the Manitoba provincial government.

The arrival of 15,199 immigrants to Manitoba over the last 12 months, the highest number since 1946, was the main reason for this year’s record population increase.

Many of the immigrants arrived through the Manitoba Provincial Nominee Program (MPNP), which allows temporary residents with six months of work experience in Manitoba to qualify for nomination by the provincial government for permanent residence, subject to meeting official language proficiency requirements for semi-skilled workers.

Manitoba has historically drawn a low percentage of total Canadian immigrants due to its frigid winters and lack of any coastal cities, which tend to be favoured over inland cities.

To reverse this trend, the Manitoba government has been requesting that Citizenship and Immigration Canada increase the cap on the number of immigrants the province can nominate through its provincial nominee program from the current 5,000, to 20,000 by 2016.

Regulatory Compliance Costs Canada’s Economy $6,000 per Employee, Possible Relief on the Way

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Regulations cost Canadian businesses nearly $6,000 per employee per year, with most of that cost borne by small businesses

A report by the Canadian Federation of Independent Business (CFIB), which represents Canada’s small and medium sized businesses, estimates that the country’s regulatory burden costs Canadian businesses nearly $6,000 per employee per year, with the cost falling heaviest on small businesses.

The report, done in partnership with auditor KPMG, also found that compliance costs are higher in Canada than the US for businesses in all size categories except the largest – those with 100 or more employees – for which per employee costs in Canada, at $1,146, are slightly lower than the $1,278 cost in the U.S.

For the smallest businesses, which are categorized as those with 5 or fewer employees, regulatory costs in Canada average $5,942 per employee, significantly more than the $4,082 per employee cost in the US.

In the survey outlined in the report, 31 percent of Canadian business owners said they may not have gone into business if they had known the burden of regulation, a discouraging finding for Canada’s business environment.

The report is the second major analysis in the last year showing that regulations are placing a heavy burden on Canada’s smallest economic players.

A study by the Canadian Labour Market and Skills Researcher Network (CLSRN) last October found that occupational regulations are preventing many of Canada’s immigrants from working in their field of study, at a cost of $2-5.9 billion a year to the country’s economy.

A turning of the tide

Like most OECD countries, Canada has experienced gradual regulatory creep over the past several decades, as a diverse array of labour and business interest groups have promoted the expansion of regulations in their respective sectors, to limit the competition they face from the greater labour and business markets.

The trend could see a reversal over the coming years though, with the seminal Red Tape Reduction Action Plan. The plan is one of the most ambitious regulatory reform initiatives in Canadian history, and includes:

  • A One-for-One Rule which will require compliance costs imposed by the enactment of new regulations to be offset by an equal reduction of regulatory compliance costs through the reduction of existing regulations.
  • A Small Business Lens which will require regulators to take into account the costs imposed on small businesses by regulations.
  • The publication of Forward Plans, which will inform businesses of upcoming regulatory changes 24-months in advance of their enactment, to allow them to prepare for the changes.
  • Service Standards that set targets for speedy issuance of licences, certifications and permits, and encourage the establishment of feedback mechanisms by regulators for businesses subject to licensure.
  • An Annual Scorecard which will publicize progress on reforms, in particular the One-for-One Rule, the Small Business Lens and the Service Standards.

In addition to the six systemic reforms, the plan requires 90 department-specific reforms over the next three years. The President of the Treasury Board of Canada, Tony Clement, described the Red Tape Reduction Action Plan as a “game changer” when it was unveiled last October.

Court Forces Canadian Province to Reveal Names of Companies Involved in Immigrant Investor Program

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Immigrants invested an estimated $120 million into PEI-based businesses through the PEI PNP Investor Program in 2007 and 2008 before it was shut down in 2009

A Provincial Crown Corporation responsible for managing Prince Edward Island’s (PEI) Provincial Nominee Program (PNP) was ordered by a court this month to release a list of 1,423 businesses that were approved to receive funding from immigrant investors.

The Crown Corporation, Island Investment Development Inc (IIDI), was initially successful in blocking requests under the Freedom of Information and Protection of Privacy Act (FOIPPA), by applicants that included the CBC, Canada’s largest news broadcaster, for it to release the names of the businesses that it approved to receive investments through a now defunct “Immigrant partner” stream of the PEI PNP.

Under the Immigrant partner component of the PNP, the government of PEI would grant nominations for Canadian permanent residence to immigrants who made a $200,000 investment into a qualified PEI business and who had a net worth of at least $400,000.

PEI’s privacy commissioner ruled that disclosure of the names of the businesses and the number of PNP investment units that each received through the program would violate the FOIPPA by revealing financial information about the companies that they had a reasonable expectation of remaining confidential when they applied for the program.

The CBC subsequently appealed to the PEI Supreme Court to over-turn the privacy commissioner’s decision, and on November 2nd, the court did just that for one portion of the CBC’s request: the release of the names of the businesses.

The privacy commission’s decision to uphold IIDI’s refusal to release the number of investment units it approved for each company was upheld by the presiding judge, Justice Wayne Cheverie, as he argued that the minimum net worth of the concerned companies could be deduced from this information, given it was a criteria for eligibility under the program.

The list of companies was posted online by the CBC, and can be found here.

PEI currently has an active immigrant investor program, but unlike the Immigrant partner program which allowed for an unlimited number of nominations, the current program is capped at 400 applications per year.