Why has Canada given up competing for immigrant investors?
TheStar.com – Opinion/Commentary – By cancelling the Immigrant Investor Program, Ottawa is giving up on competing for investors who can add to our economic vitality.
Feb 25 2014. By: Sergio Marchi
One of the budget items that received little attention was the termination of the 25-year-old Immigrant Investor Program (IIP). It was the flagship immigration tool that specifically focused on attracting global entrepreneurs and investors to Canada.
The program was “suspended” some two years ago for study. Many, myself included, were thus hoping for the program’s resurrection, as a more effective and strengthened version. Instead, the budget announced its obituary.
I believe this decision was a missed opportunity, and this view should not be seen as partisan concern. After all, the IIP was established by the Mulroney Conservative administration and under the Chrétien government, during which time I served as Minister of Citizenship and Immigration, we further developed the program.
No, my regret is about squandering our leadership in this sector.
We were the very first country to establish such a program. Now, more than 20 countries have copied and adopted our model, and the list will continue to grow, since the economy growth is the priority-one issue for all governments and the labour market continues to be increasingly mobile. Just when this concept is really taking off globally, and when demand has never been higher, our government abandons this policy ground. Why give up on competing for investors who can add to our economic vitality?
It is not as if our intake of immigrants is being overwhelmed by the investor class. At best, the number of investors represents only 2-3 per cent of the roughly 250,000 immigrants that annually enter our country.
Apparently, the government’s rationale was about ending “abuse.” If there were shortcomings, it is incumbent to fix the problems and tighten the criteria. Absolutely no disagreements here. But why throw the baby out with the bath water? Moreover, if ending programs is the way to address government abuse, then how many federal programs would have to be axed?
If the government had concerns, then it should have consulted extensively, in an effort to address these problem areas, and seek out better ideas and practices. But there was no meaningful dialogue. The government failed to recognize that in developing sound public policy, how you do it is as important as what you do.
I fully admit that the IIP was not perfect (what program is?) But if the government thought the investment amount was too low, then they could have proposed an increase. Most stakeholders were actually anticipating and supportive of a higher threshold. Indeed, Canada would be worth every extra penny!
In addition, if they thought that residency was being undervalued, then deepen the commitments.
If they wanted the program to deliver additional economic heft, then introduce innovations to target new national or regional economic priorities.
Rather than refocusing and reinvigorating the program, it was turfed, all without providing any economic analysis. Did the ministers of Finance and Immigration, for example, examine and quantify the impact of the collective investments; or tabulate the additional consumer expenditures that these high net worth individuals made, or the contributions that their children are making to our nation? In the budget document, the Finance Minister took less than one page to explain his decision, with reasoning that is rather weak and speculative.
And to add insult to injury, the budget purports to replace the IIP with an undefined “pilot” project. Talk about ending with a bang and restarting with a whimper.
The truth is that Harper government, for whatever reasons, was never comfortable with this program. Perhaps they found it easier to pit a few well-to-do immigrant investors with a “jumping the line” argument, against the many more modest independent or family class immigrants. They don’t worry about other provinces now aiming for Quebec, which was allowed to continue its unique investor program. And when you examine the new Citizenship Bill they introduced, the government clearly devalues the standing of Canadians living abroad, some 3 million strong, and thus pits them against fellow citizens living at home.
Perhaps we should not be too surprised. Wedge, populist politics has been a main staple of the Harper school of governance, but it is a divisive and unhealthy way of running a country.
Trying to attract global investors and talent is a highly competitive game, and Canada needs to play in the big leagues. This budget decision should have been about enhancing economics and not advancing Tea Party politics. Pity.
Sergio Marchi served as Minister of Citizenship and Immigration from 1994 to 1996 in the government of Jean Chrétien.
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