Toronto Star: Giving immigrants `the business'

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felinecats
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Toronto Star: Giving immigrants `the business'

Post by felinecats »

Toronto Star: Giving immigrants `the business'

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Giving immigrants `the business'

With average processing times rising to five years before admission is granted, the number of highly desirable entrepreneurial types entering Canada has fallen by more than 50% since 1993

Jul. 30, 2006. 01:16 AM
NICHOLAS KEUNG
IMMIGRATION/DIVERSITY REPORTER

The number of business-class immigrants coming to Canada has dropped by a whopping 50 per cent since 1993, prompting fears of the demise of what was once a bread-and-butter immigration class that pumped billions of dollars into the country's economy.

At the peak of the influx in 1993, a total of 7,217 entrepreneurs and investors — led by people from Hong Kong, Taiwan, South Korea, China, Egypt and Saudi Arabia — landed in Canada, compared with last year's 3,341.

The drop comes as little surprise to immigration lawyers, who say the average time it takes to process applications by immigrants looking to park their assets in Canada has grown to five years. A decade ago, it took as little as eight months. It's now easier to get a sponsorship for Grandma through the red tape — just 37 months on average.

"This particular group of immigrants likes to do business in a business way. They are not going to put their money and business plans on hold for five years to wait for a decision," explains Bay Street immigration lawyer Mendel Green, who has seen his business-immigrant files shrink 90 per cent over the past decade.

Several of his clients — with a net worth of $55 million — have been waiting to see their files processed for almost four years, a few of them since 2001. Some, tired of the delay, have abandoned their applications altogether.

"The economies of China, India and Russia are booming and, all of a sudden, we are seeing a new crop of instant millionaires," Green says. "Things are changing around the world so quickly and Canada can't afford to be smug any more."

It's not all bad news. The number of applicants in the wealthier investor category has actually risen significantly, from 1,607 to 2,590, over the past decade. But the entrepreneurial class — people who come here to set up small businesses and thus create jobs directly — has taken a huge dive, from 3,208 to a meagre 751 in 2005.

The impact of long processing times is obvious: Business-class applications have declined steadily from 5,378 in 2001 to fewer than 3,000 in 2005. In the first five months of this year, fewer than 900 applications were filed.

The drop means a significant loss of investment. Between 1986 and 1999, immigrant investors brought $2.7 billion into Canada as part of their obligations under the program. Even in the declining years, between 2000 and 2004, immigrant investors dropped $720 million into provincial economies.

"Canada is an extremely attractive destination for immigrants and we receive considerably more applications than we are able to process within the annual levels plan," explains Immigration Canada spokesperson Marina Wilson.

"We have a carefully balanced immigration program that is based on three concepts: immigrants who can contribute to our economy; reunification of families; and refugees and those in need of protection.

"Given the importance of meeting our target of economic immigrants, the goals of our humanitarian program, and the priority we place on processing close family members first, we have to make difficult choices," she says.

Toronto immigration lawyer Guidy Mamann says efficient processing is key to attracting this premium class of immigrants. Without it, the quality of entrepreneurs and investors Canada gets would be compromised.

"Those who can afford to wait for five years plus to get here have no intention of coming. They get their wives and kids here, and then return to their home country. All they care is to get a Canadian passport in the back pocket," he explains.

When Venezuela's economy experienced a meltdown several years ago, Mamann was contacted by several wealthy businessmen in exodus.

`This particular group of immigrants likes to do business in a business way. They are not going to put their money and business plans on hold for five years to wait for a decision,' says immigration lawyer Mendel Green
"They came to us because their currency was dropping like a stone. They asked us to get them here quick," Mamann recalls. "When we told them how long it'd take, they just walked out the door and took their money somewhere else."

Mamann, a former immigration officer, used to run seminars a few times a year in South Africa and Hong Kong, intended to lure business immigrants. Visa post officers attended.

That's all history now.

"Business immigration is simply not a priority any more," he laments.

In January, the federal department's director of business immigration, Michael Boekhoven, was reassigned to another job, fuelling speculation that Ottawa has lost interest in attracting this class of migrants.

One reason for the growing processing time is Immigration's stepped-up efforts, after 9/11, to probe applicants' financial background, to crack down on money laundering and organized crime.

To be eligible to enter under the entrepreneur class, applicants need a minimum net worth of $300,000 and must be committed to running a business that will create at least two full-time positions. To be an investor immigrant requires a net worth of $800,000 and a commitment to investing half of that in a Canadian business.

In addition to the usual documents required of any immigrant, business-class applicants must provide proof of their past business experience, such as financial statements, corporate and personal income tax returns, tax assessments, bank statements, business licences, minute books, letters of reference and promotional material as far back as 10 years.

A key component is that they have a minimum "legally obtained" net worth; the officer who reviews their records has to be satisfied that their assets have come from legitimate sources.

Immigration lawyer Joel Guberman recognizes that stringent checks are necessary.

Nevertheless, he says, "the process has drifted to such stupidity that it can't be viable to start business here. The system is no longer flexible anymore. The business class isn't something I'd recommend to potential immigrants."

Ontario Immigration Minister Mike Colle says the province is looking into bringing in its own investor and entrepreneur immigrants through a provincial "nominee" program, made possible by an agreement the province signed with Ottawa last November. It's a fast-track system that allows provinces and territories to select, process and recommend potential migrants of various classes for Immigration Canada's final stamp of approval.

While nominee programs in other provinces have opened doors more quickly for some business-class applicants, the number of nominees accepted by provinces and territories remains small (2,643 in 2005) and most are skilled workers, not well-heeled investors and entrepreneurs.

Ottawa acknowledges that there used to be a separate office of Business Immigration, but it was absorbed into the existing economic policy and program division during a departmental reorganization.

"But you've got to have a specific program in place that's designed to promote this particular class of immigrants and make it work, so these investors and entrepreneurs know that they are welcomed to start businesses and invest in Canada," says Guberman, whose business-class applications have declined to a 10th of what they were in the program's heyday.

"They are the backbone of the economy. What Immigration is saying is that we don't care about that part of the economy."
Skoorb
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Joined: Mon Feb 21, 2005 8:44 pm

Post by Skoorb »

An interesting, if terribly written article. Where is the dissent? Did the author even interview anybody besides immigration lawyers? Who can say that the number of business-class immigrants coming to Canada has dropped because of processing times and not because of other factors? Maybe their countries are now more attractive. Maybe there is another country that has short-tracked the application to 30 minutes, so people go there instead. The US has seen a great rise in processing times. Has it noticed a loss in business immigrants?

It makes sense that long processing times scare some away, but this article talks of nothing else, making an egregious correlation between processing times and lessening of business immigrants.

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I do think it's ridiculous that Canada, the US, and others will make people who have all their ducks in a row, solid educations, earning potentials, etc. wait for many months and years and yet turn a blind eye to those of "lower calibre" (my words!) and all but ignore their illegality, though that's an argument for a different forum, of course!
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