In the 2012/2013 fiscal year, 197 business immigrants selected to immigrate to Manitoba did not have their $75,000 security deposits returned. Under the Manitoba Provincial Nominee Program for Business, foreign businesspersons can apply for permanent residency to set up a business in Manitoba. Once a businessperson is chosen by Manitoba, he or she must enter into what is called a “deposit agreement” in which he or she agrees to live in Manitoba and set up a business in Manitoba. As security for that promise, the business person puts up a deposit. If the business person fails to live up to his or her part of the agreement, the deposit is forfeited to Manitoba. If the business person lives up the his or her part of the agreement, the deposit is returned.
If almost 200 immigrants are walking away from $75,000, the big question is whether these businesspersons are using Manitoba’s business program to simply buy Canadian visas?
In March, I received this response to a Freedom of Information and Protection of Privacy Act request that I submitted to the Manitoba government. In my request, I asked for the following:
- The number of deposit agreements entered into between the Province of Manitoba and applicants under the Manitoba Provincial Nominee Program for business in fiscal years 2009, 2010, 2011, 2012 and 2013 respectively (broken down by year);
- The number of deposit agreements under the Manitoba Provincial Nominee Program for business under which the Province of Manitoba made a final decision not to return deposits to the applicants in fiscal years 2009, 2010, 2011, 2012 and 2013 respectively (broken down by year); and
- Total revenues from unreturned deposits in connection with the above for fiscal years 2009, 2010, 2011, 2012 and 2013.
Under the Manitoba program, once a businessperson puts up the deposit and signs the agreement, Manitoba finalizes his or her “selection” decision for immigration purposes. The business person then forwards his or her immigration application to the Canadian government for finalization.
If the Canadian government refuses the application, Manitoba returns the deposit. If the Canadian government approves the application, the businessperson becomes a Canadian permanent resident and can eventually apply for citizenship.
If the businessperson decides to default on his or her obligations, there are no negative immigration consequences. Essentially, the only thing the businessperson can lose is their $75,000 deposit. (Recently, the deposit was increased to $100,000)
Now, one would think that the number of people who would default would be small. After all, why would anyone walk away from $75,000?
Under the deposit agreement, most businesspeople have two years to make their investment. If two years is not ample time, Manitoba can extend the period of time to make an investment. Certainly, time should not be a factor.
In my mind, there are two reasons that businesspersons may walk away from $75,000. They are as follows:
- The investment climate in Manitoba was not conducive to an investment. As a result, almost 200 businesspersons in 2012-2013 decided that it would be better to lose $75,000 than invest in a Manitoba business where they may lose more; or
- The businessperson had no intention of investing in Manitoba. Losing $75,000 was simply seen as the cost of their Canadian visa.
While neither scenario is overly flattering to Manitoba and its business immigration program, the second reason is more troubling.
Are businesspersons using Manitoba’s business program to buy Canadian visas? Under the business program, it is not necessary to show as high a proficiency in English or French as immigrants coming to Canada as skilled workers must show. If a person has money and cannot communicate as well in English, perhaps $75,000 is just the cost of buying a visa.
As well, perhaps these businesspeople have no desire to come to Manitoba and are using the Manitoba program to immigrate to Montreal, Toronto, Calgary or Vancouver. Manitoba’s business program is one of the “cheaper” ones in Canada. Why risk hundreds of thousands of dollars on another province’s immigration program when you can get a Manitoba visa for a mere $75,000? Once a person is a Canadian permanent resident, he or she is free to move about Canada.
Every $75,000 cheque Manitoba cashes should be viewed as a failure of the program. Instead of getting a business investment two or three times that number, all Manitoba gets is $75,000. If a business was created, the taxes paid and business spinoff would likely generate more than $75,000 in relatively short order.
Now, in the last year or so, Manitoba has revamped its business immigration program. The question is, have they fixed the fundamental flaw in the system which led to this large number of failed investments? Time will tell.