Ian Young: Chinese millionaires appear to be deserting Quebec’s immigrant investor scheme
An Asia-based immigration industry source said that the scheme, which had a 2014 quota of 1,750 applications (including up to 1,200 from China), had failed to hit that target – and by a wide margin.
In 2013, the window was open for only two weeks, and was flooded with 5,389 valid applications, including 4,676 from China, Hong Kong or Taiwan (nearly all were mainland Chinese); a lucky draw was held to extract 1,750 applications for processing. In 2012, the cap of 2,700 was hit in under a month.
Although there is a huge pool of wealthy would-be emigrants in the mainland “my colleagues do not think that China currently has 1,200 cases of the quality that the Quebec government expects,” the source said. “Of course, there may be millions of rich people in China who wish to move to Quebec, but it seems that Quebec has raised the bar too high.”
The Quebec immigration ministry has yet to respond to questions about the scheme.
[UPDATE: Jonathan Lavallée, a spokesman for Quebec’s immigration ministry, was asked whether the QIIP had failed to obtain 1,750 applications. He said on Thursday the ministry had yet to finish counting applications and assessing their validity. A final tally was expected in a few weeks]
However, the source’s assessment is lent credence by Quebec’s announcement last month that the 2015 application window for the QIIP would last for five months, from August 31 to January 31, 2016. This strongly suggests Quebec has been forced to adjust its expectations about the popularity of the program.
[UPDATE: Lavallée said: “A longer intake period was established this year to allow more time for potential investors to prepare their application and find a financial intermediary who will sign their investment agreement.”]
The QIIP has previously been very popular indeed. Quebec had recently been approving more investor migrants than Ottawa had for all other Canadian provinces combined. From 2008-2012, certificates of permanent residency were issued to 27,490 QIIP immigrants, compared to 24,555 issued by Ottawa under the now-defunct federal Immigrant Investor Program. By comparison, there were 8,524 applications approved for the entire United States under the famous EB-5 scheme in the same period, likely representing 25,000-30,000 individuals.
Quebec runs an independent immigration policy under the Canada-Quebec Accord governing relations between Ottawa and the French-speaking province. For years, the QIIP was run in parallel to the federal IIP. Both schemes most recently required applicants worth a minimum of C$1.6 million to loan the respective governments C$800,000 for five years, in return for permanent residency visas. The federal IIP was shut down last year, but the lucrative QIIP continues.
The QIIP is of major significance for the distant west coast city of Vancouver, since federal data shows 89 per cent of Quebec investor migrants have actually ended up living elsewhere in Canada; if these are dispersed in the same manner that federal investor migrants distributed themselves, then about 60 per cent of all Quebec investor immigrants likely ended up in British Columbia. It is an act of deception that has cost BC billions in IIP loans, that have instead gone to Quebec. Freedom of movement, guaranteed under Canada’s charter of rights, makes it almost impossible to halt the practice.
The SCMP estimates QIIP arrivals in BC at 25,000-26,000 in the eight years to 2012, representing more than half of all likely investor migrant arrivals in Vancouver – where nearly all rich immigrants to the province settle. Housing affordability in Vancouver is now the second worst in the world, behind Hong Kong, with the average detached house price now C$1.4 million.
Maxime Lapointe, head of the legal department for Hong Kong-based immigration consultants Yelo Consulting, said in February that the QIIP was in trouble. He cited a new 15-page list of documents required from applicants as a major deterrent.
“The list of documents is huge for this programme,” he said. “The QIIP list is way more intrusive [than other schemes] with personal and corporate credit reports as well as detailed audit reports for companies.”
Lapointe said three Quebec-based financing companies – which earn their cut from the industry by loaning immigrants their C$800,000 “investment” – had approached him to ask if he could refer them to any non-Chinese clients to fill their quotas issued by the Quebec government, since the Chinese market had apparently dried up.
An increased processing fee of C$10,106 may also have deterred some, Lapointe said. “Quebec is now not so competitive,” compared to other popular schemes, such as the EB-5 or Portugal’s “golden visa”, he said.
“Maybe Quebec has forgotten that there is now a global competition for immigration.”
*The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email email@example.com or on Twitter,@ianjamesyoung70 .