Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 14 - Evidence - May 14, 2014
OTTAWA, Wednesday, May 14, 2014
The Standing Senate Committee on Social Affairs, Science and Technology met this day, at 4:14 p.m., to examine the subject matter of those elements contained in Divisions 11, 17, 20, 27, and 30 of Part 6 of Bill C-31, An Act to implement certain provisions of the budget tabled in the House of Commons on February 11, 2014, and other measures (topic: Division 20 of Part 6).
Senator Kelvin Kenneth Ogilvie (Chair) in the chair.
[English]
The Chair: Colleagues, we have a quorum, and I declare the meeting in session.
[Translation]
Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
[English]
I am Kelvin Ogilvie, a senator from Nova Scotia, chair of the committee. I will start by asking my colleagues to introduce themselves, starting on my left with the deputy chair.
Senator Eggleton: Art Eggleton, a senator from Toronto and deputy chair.
Senator Nancy Ruth: Nancy Ruth, a senator from Ontario.
Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.
Senator Seidman: Judith Seidman, from Montreal, Quebec.
The Chair: We are dealing with the subject matter of Division 20, Part 6 of Bill C-31.
Today we have two witnesses before us. We have agreed that Ms. Queenie Choo, Chief Executive Officer, S.U.C.C.E.S.S., will present first.
Queenie Choo, Chief Executive Officer, S.U.C.C.E.S.S.: Thank you, Mr. Chair. My name is Queenie Choo, CEO of S.U.C.C.E.S.S.
S.U.C.C.E.S.S. is the largest non-profit social service organization in B.C., and we have been in the immigrant surveying business for the last 41 years, covering a broad spectrum of settlement, language, employment services, family and youth, counselling, business and economic and community volunteer development services as well as seniors' care and housing. It is my pleasure to be invited to speak on the investor and entrepreneur immigration program today.
Immigrants play a significant role in building Canada and making essential contributions to Canada's economy and nationhood. As Canada enters into new and ever-changing economic environments within the global sphere and within its own borders, Canada has the challenge and opportunity to match its immigration policies to best meet the needs and priorities of our country.
To this effect, S.U.C.C.E.S.S. would like to offer 10 recommendations with three key guiding principles. The intent of these is to reflect policy recommendations for the economic immigration category as a whole, and to guide any future programs that are intended to attract immigrants, investors and entrepreneurs.
So S.U.C.C.E.S.S. believes the three guiding principles should be able to shape policy relating to economic immigration. The first one is that we believe in strengthening immigrant ties to Canada, which is important as an ingredient in promoting the successful settlement and integration of economic immigrants.
Second, immigration to Canada should support the building of Canada's economy and its nationhood.
Third, pathways to immigrant permanence should reflect Canada's current and future economic landscape.
Those are the three guiding principles.
The recommendation we hope to be considered will support this principle.
The first one: Establishing language and education requirements across economic immigration streams. It is essential that all economic immigrants have basic skills in one or both Canadian official languages and have the required level of education that will assist in their adaptation to new economic and business environments.
This is especially essential in making the appropriate and relevant business networks and to access corporate Canada.
Second, enhancing pre- and post-arrival settlement services for all economic immigrants is very important.
In order to successfully develop long-term attachment and investment in Canada, economic immigrants require access to settlement services pre and post-arrival in Canada, not only for themselves but also for members of their family.
Citizenship and Immigration Canada's settlement program currently provides newcomers with up-to-date information on essential topics that support all aspects of their adaptation and integration in Canada, and funding of this program should be maintained and enhanced to match current immigration policies.
Third, strengthen support for targeted education opportunities for immigrant entrepreneurs. Immigrant entrepreneurs require targeted support programs that provide essential information about Canada's economic and business environments and to help them access critical Canadian business networks. In order for these programs to keep pace with the ever-changing landscape of economic settlement, new pilot programs should be developed and tested in order to ensure they meet the current as well as the future needs of economic immigrants.
Fourth, we need to ensure that immigrant selection models match landing immigrants to the current and future economic environment in Canada.
Fifth, we need to consider ensuring Canada strengthens its strategies to attract and retain economic immigrants and their families. Immigration is often a multistage, multigenerational undertaking, and supporting immigrant children and spouses, and to some extent grandparents, to flourish and remain in Canada is key to medium- and long-term nation building.
Sixth, ensuring that all our economic immigrant programs align with Canada's current and future economic environments is vitally important. Canada's federal skill trace program and the new Start-up Visa Program and the Canadian experience class program directly matches immigrants to current and future economic environments.
The seventh recommendation is looking to ensure that temporary residents have equitable opportunities to achieve permanent status in Canada.
Eighth, ensure that programs that support entrepreneurs are also offered to immigrants who have become Canadian citizens and permanent residents on residing in Canada.
Going forward, we would like to suggest exploring and considering using future immigrant investor funds to achieve social and economic benefits in communities by creating programs similar to, for example, the Saskatchewan housing development program or targeted at economic development, like venture capital for the technology sector and job creation programs in B.C.
Last but not least, we would like to suggest the following elements be considered if government intends to reopen future immigrant investor programs: Have regular, annual outcome analysis of the benefit and cost of the program. Look at the impact of the program on local economies and markets. We need better research on that. The settlement outcome of investors should also be monitored and reviewed regularly. Canadian requirements of investors should be aligned with other economic immigrants. Last but not least, the productive use of investor funds should be researched and monitored.
Thank you.
The Chair: Thank you very much.
Marc Audet, President and Chief Executive Officer, AURAY Capital International: Honourable senators, today I will give you a clear view of the Federal Immigrant Investor Program termination. Thank you for inviting me to appear before the committee. My name is Marc Audet, and I am the President and CEO of AURAY Capital International, a subsidiary of Raymond Chabot Grant Thornton, specializing in residency and citizenship by investment programs.
I have been involved with the Canadian Immigrant Investor Program since 1995, mainly with the Desjardins Group, one of the largest financial institutions in Canada, where, together with my team, we recruited over 20,000 immigrant investors under the Quebec and federal Immigrant Investor Programs.
Considering that my intervention today is only for five or six minutes, I have prepared a binder that has been distributed to you. It contains additional supporting information on today's subject, which may serve as a reference for question period.
As requested, I am here today to speak to you about Bill C-31, Division 20 of Part 6, more specifically regarding its impact on the Federal Immigrant Investor Program termination and the future program for the Canadian economy.
In recent years, the Federal Immigrant Investor Program has undergone several changes. Since July 2011, it has ceased receiving any new applications. In February 2014, the Federal Immigrant Investor Program was abolished under the last budget.
From my perspective, having been involved in the Immigrant Investor Program for 20 years in Canada and in other countries, this decision makes no sense, mainly regarding the proposition to return all the inventory, and other stakeholders in this field share my position. This decision to put an end to the Federal Immigrant Investor Program can only be explained by faulty assumption and biased information on the Federal Immigrant Investor Program, its clientele and immigrant investor programs in general. The core of my submission consists of a series of facts that together support the previous claim.
Fact one: Investors have more options. From 1984 to 2009, more or less 15 countries were offering this type of program worldwide. Today, we have more than 30 countries involved in residency and citizenship program by investment. This boom in the immigrant investor program market was largely encouraged by Canada's moratoriums on its own programs, despite the great interest of investors in coming to Canada. Our American neighbours are now the first beneficiaries of the government's recent announcements, and they observe an increasing demand with respect to their program, which resembles the Canadian investor program in offering residency before citizenship.
Fact two: The backlog claimed by CIC was in fact largely created by CIC's administrative decisions. The inventory of 20,000 files, meaning more or less 60,000 people, is mainly due to the way the program was managed by CIC as opposed to the program criteria being too easy to reach.
From 2003 to 2006, CIC was receiving an average of 1600 applications per year. In September 2006, CIC implemented a new procedure, the simplified application process called SAP, aimed to technically improve its efficiency. With this procedure, the investor only had to provide an application form and pay the fees, with no supporting documents and no prequalification required. The result is that the average number of applications received by CIC tripled.
In 2009, the market was informed that CIC was planning to increase the investment requirement from $400,000 up to $1 million in the near future, but this happened only in December 2010. This again doubled the number of applications, with an average of 10,000 files per year.
This demonstrates that, in fact, the program was not necessarily priced too low but rather that the administrative measures undertaken by CIC are the real source of the artificial increase in file inventory. The belief for all experienced stakeholders is that the number of serious files in the actual inventory, applicants that are qualified and still interested in pursuing, does not exceed 10,000 files, meaning a three-year backlog with the actual processing target.
Fact three: The positive economic impact of the FIIP has been demonstrated. The economic impact of the federal investor program has been considerable. In a study made by Analysis Group in 2010, it was estimated that the 2,500 immigrant investor families arriving to Canada each year, which is less than 3 per cent of the global admissions, generated on their own a net economic impact of nearly $2 billion for Canada. Studies made by Citizenship and Immigration Canada in 2010, before revamping the program, and the one by Auguste Solutions in 2013 also concluded that the FIIP generates substantial cash inflows at very little cost for Canada. Also, unlike other programs, the Federal Immigrant Investor Program causes little or no concern with respect to security, economic or financial instability. Finally, there is absolutely no public study stating the opposite.
Fact four: Why would CIC stop the FIIP if it's so positive for Canada? Officially, the budget cited four main reasons for abolishing the immigrant investor program: the lower level of required investment versus other countries, the low proportion of immigrant investors retaining ties with Canada, the low contribution to Canada's economy, and lower levels of income taxes compared to other immigrant categories. These criticisms are unfounded. None of them is backed by strong evidence and, in some cases, the truth is the exact opposite. I have detailed my arguments for these four reasons in the attached binder.
The true reasons for the Federal Immigrant Investor Program's end are that since 2006 the administration of the program has not been optimal on both sides, the file reception and the use of funds by some provinces.
In conclusion, the government's intention to eliminate the current backlog by returning applications and refunding associated fees paid by the federal Immigrant Investor Program applicant will be a disaster for Canada's international credibility on immigration matters and generate several complaints and litigation. For instance, we have been informed that over 1,100 investors have already submitted a court case.
Moreover, terminating the federal Immigrant Investor Program will result in a major loss for all the participants — investors, participating provinces, Canadian immigration practitioners, facilitators, CIC, the Canadian economy and society.
Our recommendation: Since its inception, Canada's federal Immigrant Investor Program has been very profitable for our economy and society. It was recognized worldwide as a reference among other similar programs. Therefore, Canada should continue to offer a modern program that will serve as both a benchmark throughout the world and a positive and effective instrument for Canada's continued integration of quality immigrants and economic development.
To do so, my three recommendations are the following: If CIC does not change its approach to clearing the backlog, the concerned article in Bill C-31, Division 20 of Part 6, has to be amended in order to minimize the damage for all participants; there should be engagement in a collaborative process with facilitators to eliminate the current backlog of applications, following the global process described in my submission; and the initiation of a two or three-day structured discussion with different provincial economic organizations and also international immigration organizations on the future of the federal IIP, including considerations such as the desired trade-off between residence privileges and investment levels, the desired clienteles for Canada, the available options of investment type and their associated economic impact, and the need for retention, integration, and other social measures. A task-force committee could then be put in place, as has been done in other countries, before implementing a new program.
Thank you for your attention.
The Chair: Are you nearing a conclusion?
Mr. Audet: That's okay.
The Chair: That's okay?
Mr. Audet: Yes, perfect; done
The Chair: Okay. We are right in sync. Thank you very much. I will open up the floor to my colleagues for questions, beginning with Senator Eggleton.
Senator Eggleton: Mr. Audet, you are very clear that you are not happy about the investor program being cancelled. Of course, I understand that there are some 68,000 people in the backlog whose applications get cancelled by the proposition of the government in this bill.
They're saying that they don't think the program is appropriate nowadays. You commented on that. They're also coming out with some new programs. They're talking about an immigrant investor venture capital fund, and they did start up a program for startup business last year. Do you have any thoughts or opinions about these new programs and whether or not they can be an adequate replacement for what they're cancelling or proposing to cancel?
Mr. Audet: Yes. The information that we received is that the government wants to first increase the threshold of the investment. As I mentioned, we have international competition now that we didn't have 15 years ago. Now, the American program is very popular. You have to understand that, to get a green card in America, an investor — a Chinese client, Korean, Middle Eastern or whatever — has to invest only $500,000 U.S. in an investment. It is a risky investment, but he can get his money back.
On our side, the figure that we put on the table is about $2 million in investment. If we do venture capital asking an investor to put in $2 million, I would say that we will have less than 50 investors a year for Canada. You have to compare the market. People have options on the table now. Canada is a nice destination. We have something nice to offer to immigrants, but we are talking about investors, not about skilled workers. The reason we created this category in 1985 was because those guys cannot comply with the selection grid. At that time, we said, ``Okay we will ask for investment.''
So there are programs in the world through which they can get a passport. If you put 1 million euro into Malta, you have a European passport. That's the competition. We have to be careful.
The use of funds, for me, is level number two. Level number one is that the government has to establish how many we want per year. I have asked the question for the past five years and nobody replied to me. Do we want to have 500 business investors per year? Do we want to have 5,000? So one will know exactly what we want. More or less, Canada receives 250,000 immigrants per year, and the investor represents 3 per cent, more or less, of the total portfolio. Is that something that we want to keep or that we want to increase? Once we know that parameter, it will be very easy for the stakeholders to design the program. If we know that we need only 500, then, yes, we can maybe overprice the market.
Senator Eggleton: I don't know how far these processes are around. The startup business class, I think, was started last year. The immigration investor investment capital fund is not, I don't think, together yet. Have you been consulted?
Mr. Audet: No, regarding the consultation, that's the problem in the market. We asked for access to information to receive all of the reports and everything. We didn't receive anything to our inquiries. You will see the information in the binder.
Senator Eggleton: You have commented on how this affects all of Canada, but your operation is based in Montreal.
Mr. Audet: Toronto and Vancouver also.
Senator Eggleton: In the Quebec context, isn't this program going to continue? Because of the very special agreement between the federal government and Quebec, there are provisions for Quebec to do something different from what the rest of the country does in this regard. Wouldn't this be continuing on in Quebec?
Mr. Audet: In the decision on the budget, Mr. Flaherty abolished the program. He didn't abolish the category. The category is designed by the federal government. That means that Quebec can continue with this program. The thing is that, as I'm sure you know, Quebec is a partner with the federal program also, so the day that we, on the federal side, design a new program, Quebec will follow. Actually, the main reason is, as I state in my documents, Quebec is a very successful program. More or less every year, 400 small and medium-sized enterprises receive money from this investor program.
The other one is that we have a participating province having $1 billion from the federal Immigrant Investor Program and doing nothing. We complained about that. The facilitators are mostly all of the banks duly authorized by CIC to promote and receive the investment for the investor program. We noted to CIC many times that, if the provinces don't use the money properly, that's what will happen.
Senator Eggleton: Okay. Let me ask Ms. Choo, finally: You have given us a lot of recommendations that you think should be incorporated into immigration programs, but what about these two programs I just mentioned that the federal government is proposing? What are your thoughts about that, and do you think also, like Mr. Audet, that it is perhaps a mistake to cancel these two?
Ms. Choo: As I mentioned before, there are actually some programs that happen in some jurisdictions. For example, in B.C. we do have the Business for Immigration Integration Support, which is a provincially run program to help entrepreneurs to set up their own business within that province.
So that is a different nature of the program, in comparison to the investors program. However, I have been putting the emphasis on the humanity side, the social aspect, because it is not just an investment. I think that we also have the obligation to make sure that these people stay in our country and contribute to our country as a nation.
This is what I was talking about in terms of the majority of my recommendations. I think there is some merit to those programs, but we can tweak the program, redesign it, so that we can support people up front, prior to them departing their own country of origin, to make sure that they're well equipped to understand what Canada is all about and what their obligations are as a permanent resident. It is far more important than just talking about the amount of money or when the amount of money is coming up.
I truly believe in the integration, the settlement services, pre- and post-departure.
Senator Seidman: I would like to clarify a few issues if I might, Mr. Audet. Is Quebec still accepting investors into this program?
Mr. Audet: Yes and no. They have a moratorium on the program. They will reopen in September for 1,750 files only because they already have a backlog of 10,000 files so they can manage the backlog.
Senator Seidman: Quebec is managing the backlog.
Mr. Audet: Yes.
Senator Seidman: Does the Quebec program differ at all from the federal program?
Mr. Audet: At 90 per cent it is the same. It is the same requirement of $800,000 investment. The only difference is the management experience — the definition is a bit different. The big difference is the user funds in the way the program is marketed. On the Quebec side, all the money goes to Investment Quebec. They give the money to the provincial fund. They discount the money so with $800,000, they will ask how much money they need to have $800,000 later. So they have $100,000 more on the table and pay the fees and give small- and medium-sized enterprises between $40,000 and $250,000 per enterprise.
As I mentioned previously, about 300 to 400 enterprises per year will receive $150,000 grant per company. On the Quebec side, the program is very strong on the investment side. As you know, Quebec is about retention. That is what they are fighting now.
Senator Seidman: You spoke about international examples.
Mr. Audet: Yes.
Senator Seidman: In fact, you said that this program has been recognized worldwide as a reference among other similar programs. Could you give us an example or two of other international programs that might compare or not compare to this?
Mr. Audet: I invite you to go to Table 2, the first slide where you will see all the programs in the world. You will see all the countries involved from the 1990s to today. Mainly in past years what happened was in Europe because the economy was not so good. To help the economy, they started a residency program, and now they have a citizenship program. We have the Caribbean now doing more passports. You can make a donation to the government or you can invest in a real estate project in the Caribbean.
Actually, because we have to compare apples with apples, the benchmark of Canada is not necessarily the Caribbean. It is more like America, Australia or the UK. Let's say that what we have is like what they have across the border in America. America can benefit from what Canada is doing. They are taking advantage of the growing demand because all world reports show that they have more wealthy persons.
On the other side, Canada can take advantage of that. Since 2011, we haven't received new applications — three years ago — so we are sleeping. We have to react and define what will be, but before we define the category, we have to know what we want. It is not clear.
Senator Eggleton mentioned the start of the visa. This is a disaster. We had fewer than 10 applications in two years. Why? It is normal. They have no consultation. That's what happened with this proposed amendment to return the inventory. It doesn't make sense. As mentioned, we have fewer than 20,000 files, and we know a lot of them are garbage files. A lot of people don't qualify. A lot of them don't have motivation because since 2008, while waiting, their lives changed a lot. They already landed in America or Australia or somewhere else.
The Chair: I'm going to interrupt you. All the things you are describing are described in the bill as reasons for changing. We have a great deal of information already with regard to the programs that exist. That's the nature of the total bill that we're dealing with. You could focus on any unique differences with regard to the questions.
Mr. Audet: To come back to the specific question about programs, we make provisions. Two or three pages later, there is an international graph that I made for 100 different options in the world. You can see that Canada is in the middle. Some countries have two or four options for investment. You can invest in real estate or bonds. I analyzed more than 30 countries in the world so you can see the classification. We have to do that before we revamp the program for the next step. That's why we need to have specialists around the table to see exactly what is going on worldwide. The world changes quickly.
Senator Seidman: Thank you very much. Ms. Choo, in your presentation, you said that immigrants who have become Canadian citizens or permanent residents should not be overlooked for future entrepreneur programs. I would like to know if you can explain why they have been overlooked under the current program and what you suggest as far as that is concerned going forward.
Ms. Choo: That is an excellent question. This is to the point that there is some provincial jurisdiction program for only certain criteria that the new immigrant, they say, is within the five years of residency. As a PR, they can be eligible for this program that is totally free to help them set up their own business in Canada.
What about those old immigrants who have experience living in Canada for more than five years who also might have the talent, resources and interest to set up the business? We should also be able to provide them equitable opportunity to be able to start the business, if that's going to be a line and grow the economy of our country.
Senator Enverga: Thank you for the presentation and thank you for this book. It looks like a lot of information.
Ms. Choo, you made a number of recommendations to this committee in your written submission, such as government-funded programming for targeted education and settlement programs. Later, you suggested the main aim of entrepreneur and investor immigration is to contribute to the economy.
Do you have any indication in terms of research that suggests that these two recommendations make the economy grow? For instance, do we have a number indicating how much these two classes of immigrants invest in the country initially and how much yield to job creation, tax revenue or re-investment that we, as a country, receive? Do you have any data on this? I might want your ideas on this too, Mr. Audet.
Ms. Choo: Thank you for the question. I think it is really relevant and appropriate to ask those questions. As I mentioned, and I think in my package of information that's been circulated to you is the Business for Immigration Integration Support. It shows as a pilot program, but also shows that we could enable the immigrants to grow the business here, to grow our economy here. Within two years about $6.2 million are brought in by these immigrants who set up business in B.C.
This is just a pilot. We have created 165 new jobs in B.C. by these immigrants. It is only a pilot. It was only two years in length recently. I don't have those statistics in terms of what you are asking for. I'm trying to really encourage the government to look at programs that will enable people to succeed, especially to set up business, especially to stimulate the economy in each province.
Right now, as I mentioned, those people who are not meeting the criterion of five years are not qualified for that. It means we have missed out on a whole bunch of people who might have the talent and resources to do it.
I'm asking that we continue to build those into our newly redesigned investment program so that people are enabled to make the investment to have the attachment to Canada as their own country for the future. That's the vision we would like to see.
Senator Enverga: Mr. Audet, have you got any idea on how many jobs were created?
Mr. Audet: Yes, we have two categories: entrepreneur and investor. Entrepreneurs are active and investors are passive. The entrepreneur class, particularly on the federal side, was abolished, and they gave the power to the provinces for the provincial nominee program. On the Quebec side, they still have an entrepreneur program.
The entrepreneur program in Quebec is not a very strong program. The number of applications is usually less than 100 a year and mainly confined to a convenience store and coffee shop or something like that.
The provincial nominee program, I think the provinces try to have more powers with Ottawa. It can be a good thing maybe to have the needs of the economy. The thing that is missing in our regulation is we just consider the main applicant as the entrepreneur. Why don't we pool many of them together? In America that's what is going on. If you cross the border into Vermont, you have a place called Jay Peak Resort. Jay Peak received $650 million from investors and they get a green card.
Senator Enverga: My question is how many jobs. Do you have any idea how many jobs were created?
Mr. Audet: On the entrepreneur, usually it is the entrepreneur himself plus one or two, with the actual structure. With the investor, the result will be what we do with the money. Okay? On the federal investor program, the money that CIC received, the 400, it is split with eight different provinces, and the provinces do what they want with it. On the Quebec side, we give to job creation.
Senator Enverga: Do you know how many?
Mr. Audet: I would say usually it is 2 or 3,000 a year, something like that.
Senator Enverga: Two thousand jobs are created?
Mr. Audet: Something like that.
Senator Enverga: Some are saying that most of the money coming in, let's say they have $1 million, and they just bought a couple houses for half a million; is that true?
Mr. Audet: No.
Senator Enverga: Is that the kind of investment we're getting from a lot of investors, Ms. Choo?
Ms. Choo: The question you are asking is what kind of investment has been seen. Again, my recommendation is that needs to be well documented and researched because there is a lot of speculation in here.
Much of the speculation flows out in the media, depending on the person's position. It needs to be well researched, and also the statistics should be there to support the kind of programs that are more effective in supporting our country's economy. That's what I'm suggesting in my recommendations.
Senator Enverga: You agree there should be some sort of overhaul, because right now we don't have any statistics.
Ms. Choo: No.
Senator Enverga: Or information on what is happening. We don't know where they put their money; we don't know how many jobs are being created. You agree that we need some overhaul in this investor program; right?
Ms. Choo: Absolutely. Those are the 10 recommendations. Plus, going forward, if we are going to redesign that, we need to have those criteria, the leaps and bounds, and make sure we monitor how the money is being invested and used by each jurisdiction. I gave some examples of good practices. We have to be aware of the information for those investors pre-departure and post-arrival.
Mr. Audet: I invite you to go to table 8. A study was conducted in 2010, and the conclusion is that for an immigrant investor the economic impact is about $770,000 for each family investor. They make the passive investment, 800,000, and it would generate 50, 60,000 net for the economy, out of the 800 because we have to return the 800,000 five years later. We don't keep this money.
Those guys spend a lot of money in Canada. There's a study saying they buy a property, they have cars, they have kids, and they pay tax. In the study you will see the figures of $770,000 per family for each investor.
Senator Enverga: There's a question there whether they're here to invest or whether they're here to live. If you have a status change in any country, you can invest in Canada. You don't have to come here. That's the main point.
Mr. Audet: Maybe to clarify, Canada, the program to receive a permanent resident visa under the investor category, you have to lend $800,000 to the government for five years at zero per cent. You don't have to do anything else. If you want to buy a business, if you want to play golf, you do what you want; you have no condition on your visa. You don't have to do anything else.
In the report on table 9, they say one third of them do something — create a business or invest in a business. That's good news.
Senator Seth: According to the old program, I see about 2,500 immigrant investor families enter Canada each year. That means these immigrant investor programs provide an annual economic contribution of at least $2 billion to the Canadian economy.
So after eliminating this program, are we going to get benefit reduction or an increase in the figure? Can you explain this, please?
Mr. Audet: The problem that we have, we will have a shortage because if we return all the inventory and now we are in discussion to start a new program, I think we will have a consultation maybe in the next months, and maybe we will have a new regulation, maybe at the end of this year, beginning of next year. After that we have to do the promotion of the program worldwide because people are going to come like this. We see that with the start of the visa, for example. So we will have an impact in 2017.
That's the reason we say that's a real disaster. We're not only talking about the human side, waiting for five years. On the economic side, because we have the capacity — actually CIC received fewer applications, all categories, than the capacity.
If you check 2012 and 2013, they process more than they receive. So why the backlog? Knowing that if we have another product ready right away that we can sell, and we see the number can be high, maybe. But now we are in between something.
And that's my point also on the other side: we have to make sure that the pricing, not only the use of venture capital, that for me is plan B, but we have to make sure that we have the money we're looking for and the number that we need to make the formula. After that we can use the funds, whatever is for venture capital, for other stuff, that everybody is willing to, but the investor's first question, he will say that Canada is maybe a top country in the world, I'm ready to pay a premium for that, but not necessarily three times.
We have to calibrate this, the residency status. Mr. Kenney announced recently that he wants to increase the citizenship rules, so the more requirements you put, you cannot increase the price at the same time.
Senator Seth: You have also said in your presentation that you recommended that the Immigrant Investor Program be expended. Here the government is saying, instead, getting more processing system, aiming to process the newer applicants faster. How do you feel about this change? Will we be attracting more wealthy investors in the country?
Mr. Audet: From the world report, they have more customers available. Yes, we can play with the price, but on the Canadian economy, we have to take advantage of what is going on. That's why 15 countries in the last three years have jumped at this kind of program.
We're not talking about a small country, but some large; the last one is Malta. Canada has to make sure that we continue to be at eye level. We can ask whatever the amount, but the amount has to make sense. We can ask for a $2 million investment, maybe, but if we have only 50 investors at the end of the year, do we prefer to ask for 1 million and get 500 investors? Because don't forget those investors, if we have 50 or 500, the impact is 10 times, because more or less the same investor will consume the same thing. They will buy one property, cars and so on.
The Chair: She asked specifically about the program being created in this bill. She asked whether you thought that would lead to some success.
Senator Seth: Already I see the backlog. They have closed it. By expanding your program, you are saying it is not creating more backlog again?
Mr. Audet: Depending. The approach was to expand to venture capital funds and so on, so it depends on the amount. If you ask an investor to put $2 million at risk, it will be very difficult to have investors. If we ask them to put $500,000 at risk, like the American program, we are in business. Maybe we can ask for a little bit more. The total number would depend on how many we want. That's the question we ask to the government. What is a percentage of the weight of business category that Canada wants in its total immigration?
The Chair: Mr. Audet, do you or your firm represent investor immigrants?
Mr. Audet: Not really. The way we do the work, we recruit investors through immigration consultants and immigration lawyers around the world. I used to be with Desjardins. To be on the citizenship immigration federal investor program, to be a facilitator, you have to be a member of —
The Chair: I asked a specific question. Do you or your firm represent investors? I heard your answer. Do you collect any fees through the investor program, either from the immigrants or from the government, to manage the program?
Mr. Audet: Yes, from the government. Not from the investor, from the government.
The Chair: You had a financial interest in the program?
Mr. Audet: Yes.
The Chair: I just wanted to get that on the record. I would only say one thing with regard to your presentation here today. In my province, the experience that has been dealt with there was dramatically different than what you have indicated here today. It wound up costing the province a great deal of money because of the way in which it had to be wound up. My understanding is that's not a unique experience in the country with regard to the program. That's just a comment from me.
Ms. Choo, I must admit I was really quite impressed with the analysis that you put forward. This committee has been looking at a number of different bills and programs that have come before it with regard to immigration. Indeed, we did a study on cities, and the immigrant issue there was an important aspect. Many of the things that you have recommended are things that we did identify — the tremendous importance of giving the potential immigrant really solid information before arriving here and after arriving here, and the issue of language was a very important one there. I'm not going to go through all your recommendations. I want to thank you very much for the thoughtfulness that you put into that.
Mr. Audet, I thank you very much for the volume of information that you have provided us, which will take us some time to go through.
With that, colleagues, we now need to move into the second phase of our meeting, which is to deal with recommendations going forward.
(The committee continued in camera.)