Thursday, March 25, 2010

Immigrants with money -- keep them coming

By Don Cayo, Vancouver SunMarch 25, 2010



B.C. is doing much better than any other province at attracting immigrant investors, says a new study on my desk.

What the study doesn't say -- but what I think you'd find if you drilled deeper into the data -- is that Metro Vancouver is doing very, very much better. And the rest of the province, not so much.

I say this based merely on anecdote and casual observation, not the stuff of academic studies. But Roger Ware, an economics professor at Queen's University and one of the study's authors, agrees that immigrants tend to wind up in places like Vancouver, Toronto and Montreal. And he, like me, thinks it would be good policy to find ways to encourage newcomers to distribute themselves more evenly across the land.

Ware and two associates -- Pierre Fortin, emeritus professor of economics at Universite du Quebec, and Pierre Emmanuel Paradis, senior economist at Analysis Group -- found a lot of good reasons to want investor immigrants living nearby.

First and foremost, after 2-1/2 decades that Canada has been recruiting about 2,500 investor families a year (just three per cent of all our immigrants) this relative handful collectively adds about $2 billion a year to our economy.

In addition, they provide provincial governments -- mainly B.C., since we're home to 49 per cent of these new arrivals -- with $400,000 each in interest-free money that must be left on deposit for their first five years in the country.

Plus they come with an average of three family members -- more than most immigrants -- and they tend to be independent and well-educated.

Contrary to common perceptions, they also tend to commit to Canada. The study found that 80-plus per cent spend at least 10 months a year here, and they continue to do so years after they've immigrated.

Almost three quarters of Canada's new immigrants are of Chinese descent -- 29 per cent from Mainland China, 23 per cent from Hong Kong, and 22 per cent from Taiwan.

And investors who come to Canada tend to be younger than those who choose countries like Australia or the U.K., our competitors for attracting new citizens with money to invest. Ware speculates this might be because the $400,000 deposit required by Canada is less than these other countries demand, so we're affordable at an earlier stage in their careers.

While a relatively low financial requirement might be a positive when it comes to recruitment, Canada also has one big negative factor, he notes. This is the time it takes -- 31 months on average -- for our bureaucrats to process an application. This compares to 12 months in Australia, and just 14 weeks in the U.K. And it's getting worse as the number of applicants rises while processing capacity does not.

This is a shortcoming that Ottawa could deal with easily, assuming it wants to.

But the study also points to a deficiency -- and therefore an opportunity -- that the province could and should address. This is in the area of services available to help immigrants integrate into their new communities -- an area where many new arrivals find us wanting.

Although it's not the point of the study, this unmet demand might also provide a way for communities that are usually overlooked by immigrants to compete for a greater share. If they were to prepare a thoughtful and helpful welcome mat, so to speak, it might encourage at least a few newcomers to give them a second look.

Investor immigrants bring money, and money creates jobs. The $2 billion a year in continuing benefits is a big boon to Canada, and attracting young families is becoming increasingly important to communities where old folks will soon outnumber the young.

dcayo@vancouversun.com

Visit Don Cayo's blogs, one on tax issues and one on globalization, at www.vancouversun.com/blogs
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