Prince Edward Island is still raking in millions of dollars in default payments under investor streams of its Provincial Nominee Program (PNP) that were cancelled long ago.
Four years after the end of its 100 Per Cent Ownership and Partial Ownership entrepreneur streams in 2018, that Atlantic Canadian province was still able to pocket almost $8.9 million in default payments last year.
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Under those now-defunct streams, prospective immigrants could get their permanent residence to the island province by opening a business there and paying a $200,000 deposit. That deposit would then be returned to the immigrant provided certain conditions were met.
The programs were controversial because many immigrants put down their deposits with no intention of starting business, effectively paying for Canada permanent residence.
And, due to the delays in processing things at IRCC, many of those deposits are only now being deposited into the province’s coffers.
“Once the province of PEI nominates an individual and their family members, it then goes to the federal government for processing,” Finance PEI CEO Jamie Aiken reportedly told SaltWire Network.
“Federal processing times, unfortunately, have increased over the last number of years, upwards to 24 months. And then with the pandemic – that also slowed down the processing of files.”
Finance PEI is the provincial crown corporation of the Department of Economic Growth, Tourism & Culture that serves as the leading financing group for Prince Edward Island.
There are tens of millions of dollars of similar deposits in escrow accounts waiting for final decisions by the IRCC.
Island Investment Development’s 2021-22 year-end report reveals Prince Edward Island is still hanging onto $37.4 million in deposits from other investors who immigrated to the province under these streams.
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The millions of dollars in defaulted deposits last year came from 47 immigrant entrepreneurs. With their dependent family members, their applications brought a total of 169 people to the Island through those streams.
Since 2018, the Start-Up Visa Program (SUV) has largely replaced those two entrepreneur streams. Started in 2013 as a pilot program, the SUV was made permanent in 2018, the same year Prince Edward Island cancelled its PNP entrepreneur streams.
Foreign nationals with a qualifying business or business idea who want to get their permanent residents through the SUV must secure the support of a designated angel investor group, venture capital fund or business incubator, plus have the required settlement funds and language ability.
Candidates under the SUV can move to Canada on a work permit while they establish their business, before qualifying for permanent residence. To qualify, applicants must be actively involved in the management of the business within Canada.
Canada plans to welcome 3,500 newcomers through business programs in 2023, rising to 6,000 by 2025. A significant number of these will come through the Start-Up Visa.
Under the SUV, the required commitment from a designated entity must meet the following criteria:
- A designated angel investor group must confirm that it is investing at least $75,000 into the qualifying business, or two or more commitments from designated angel investor groups totaling $75,000; OR
- A designated venture capital fund must confirm that it is investing at least $200,000 into the qualifying business or two or more commitments from designated venture capital funds totaling $200,000; OR
- A designated business incubator must confirm that it is accepting the applicant into its business incubator Program.
In order to qualify, the intended business must also be incorporated and carrying on business in Canada at the time the commitment is made and:
- The applicant must own a least 10 percent of the voting rights in the corporation, and;
- No other person can hold 50 percent or more of the total amount of voting rights in the corporation.
Up to five applicants may have their application for permanent residence supported by the same business investment. However, certain applicants may be designated essential to the intended business.
If any of the essential applicants withdraw their application or are refused for other reasons, all other applicants under the same business investment will see their applications terminated.