The Canadian government’s decision to scrap its “Immigrant Investor Program” leaves 46,000 wealthy Chinese who had planned to emigrate to Canada, or at least move their money and families there, searching for a new home.
The decision, announced in Finance Minister Jim Flaherty’s budget on February 10, effectively tosses out 59,000 pending visa applications, 70 percent of them from China, according to the South China Morning Post. Under the terms of the program, applicants with a net worth of over C$1.6 million (U.S. $1.5 million) agreed to give the Canadian government an interest-free, C$800,000 loan for five years in exchange for a resident visa that could lead to citizenship.
The program drew a flood of mainland Chinese applicants via the Canadian consulate in Hong Kong, forcing Canada to freeze the approval process in mid-2012. Part of the problem was that the visa program was priced too low, Canada said, undervaluing Canadian permanent residence. There was also “little evidence that immigrant investors as a class are maintaining ties to Canada or making a positive economic contribution to the country,” the budget says.
In addition to leaving tens of thousands of Chinese citizens in the lurch, the end of the program may also devastate the property market in Vancouver, where real estate agents estimate that Chinese buyers are responsible for 80 to 90 percent of the deals in some wealthy neighborhoods.
China’s wealthy, after making their money from real estate, investments, and shadier sources of income like black market trading and corruption, have been eager to move their families and assets abroad. Three-fifths of Chinese with over 10 million yuan ($1.6 million to spend) were hoping to or had already obtained a foreign visa last year.
And Canada wasn’t the only country vying for access to their considerable wealth: The U.S. issued nearly 6,900 visas to Chinese nationals last year under its EB5 visa program, which requires foreign citizens to invest at least $500,000 in “job-creating ventures” (the U.S. figure includes the investor and his or her family members). And Australia’s Significant Investor Visa has attracted 595 applications since November 2012 (nearly 500 of them Chinese), requiring a A$5 million (U.S. $4.5 million) investment and a clean criminal record.
Portugal, the U.K., and Cyprus, among other nations, also offer investor visas that have attracted Chinese citizens. But Canada’s program was by far the most popular in the world—and one loophole remains: The semi-autonomous government of Canada’s Quebec province has kept its immigrant investor program alive, for now.