More than 45,000 wealthy Chinese who had hoped to gain Canadian residency may be looking for a new haven outside of China after Canada cancelled its investor visa program last week.
The move by Canada’s government came within one week of a Hong Kong media report that revealed how the overwhelming majority of applicants under the program were from mainland China, and against a backdrop where local residents of Vancouver were rapidly finding themselves priced out of the city’s housing market.
The Ottawa government announced on Wednesday that the country’s Immigrant Investor Program, which allowed foreign nationals to gain Canadian residency by loaning 800,000 Canadian dollars (US$726,720) interest free to any of the country’s five provinces for five-years was being cancelled with all pending cases being rejected.
Public perception that the program had become a visa expressway for wealthy mainland Chinese was reinforced after a report in Hong Kong’s South China Morning Post revealed that among the 59,000 applications pending for the program, more than 45,000 were from mainland Chinese.
Reshaping the Vancouver Real Estate Market
The influx of wealthy mainlanders came on top of a significant migration of Hong Kong residents to Vancouver, and newcomers have reshaped what was once a sleepy city on Canada’s west coast. While the immigration boom has made some local residents rich, many others resented the impact of the new immigration, particularly the competition it caused in the local real estate market.
Since the visa program was introduced home prices in Vancouver, where 80 per cent of Chinese investor migrants seek to live, have become the second-least affordable in the world behind Hong Kong. Now run-down bungalows in Vancouver are said to sell for as much as US$1.8 million in a city where median family income averages $64,000.
Canada’s Program Among the Most Popular with Applicants
While many countries have investor visa programs, Canada’s program was considerably more liberal than that found in many other developed countries, which normally require investments rather than loans. In the US, investor visas require a minimum US$1,000,000 investment, except in the case of high priority investments qualifying under the EB-5 visa program, which require a $500,000 investment.
The case-load for Chinese applicants to Canada’s program amounted to approximately six times the combined applications from all other nationalities to the investor visa programs in the US, Britain and Australia.
“Undervaluing Canadian Residency”
While the media report appears to have been the catalyst for Canada to cancel the visas for loans program, the investor visa scheme had clearly been unpopular with many Canadians.
Studies had shown that residents admitted through the investor visa program reported investment income and employment below the national average and paid significantly lower taxes than those in other immigrant categories.
In ending the program, the Ottawa government said that the investor visa scheme “significantly undervalued Canadian” permanent residency.
For the tens of thousands millionaires looking for a new home, perhaps they can find a home in someplace warmer than Canada. The Caribbean nation of St Kitts-Nevis now offers passports that allow for visa-free travel to Europe, the UK and most of the British Commonwealth for only a $400,000 investment. No word yet on language requirements in the island nation.
(An earlier version of this article appeared on Forbes.com)