Wednesday, January 19, 2011

You’re leaving already?

McGill University's Roddick Gates, on Sherbrooke.Image via WikipediaSix out of 10 business-class immigrants who land in Quebec quickly take their money elsewhere

When your province’s birth rate is hovering at replacement level, and when nearly a quarter of the population is nearing retirement, language politics tend to take a back seat to more pressing matters—like how to sustain the economy. No surprise, then, that Quebec has assumed a prominent spot on the immigration bandwagon, treating newcomers as a key to its economic future rather than a threat to its identity. By any measure, its efforts have paid off: in the last decade, the province has jacked up its intake of immigrants by more than 50 per cent, welcoming almost 49,500 last year.
The question now is how to keep the most wealthy and productive newcomers from flying the coop. A recent internal report by the federal immigration department suggests more than six out of 10 of the coveted business-class immigrants who declared Quebec as their destination during the early 2000s quickly fled to other provinces, taking their investment dollars and entrepreneurship potential with them. The big winners? Ontario and the two westernmost provinces. B.C. saw a 22 per cent net gain in the number of business-class immigrants who called it home, due to migration from other provinces. Ontario enjoyed a 14.5 per cent bump while Alberta saw a 9.5 per cent increase.
The report, which was obtained under Access to Information by Vancouver immigration lawyer Richard Kurland, calls into question the widespread belief in Quebec that newcomers will provide much of the province’s future economic momentum. The theory, promoted in policy circles and at all levels of government, assumes a heavy influx of business immigrants—an umbrella term for investors, entrepreneurs and the self-employed who are admitted to Canada on the basis of the wealth they will generate (investor-class immigrants to Canada must be willing to spend more than $800,000 in this country, and their net worth must exceed $1.6 million; entrepreneurs must have a $300,000 net worth and two years of business experience).
Certainly Quebec’s resident population seems disinclined to take up the flag of entrepreneurial dynamism. According to one study published last year, the province’s rate of business ownership is currently half that in the country as a whole, while the percentage of the population that intends to start a business is among the lowest in the country.
Why the wealthy newbies have itchy feet isn’t yet clear. The report compared the stated destinations of immigrants who arrived between 2000 and 2006 with the location from which they filed tax returns in 2006, but it offered no explanations for trends in migration. Curiously, new arrivals to Quebec in other immigration categories show no such flightiness: the province’s overall retention rate of immigrants stands at 79 per cent, which is far short of Ontario’s 91 per cent, but a whole lot better than Saskatchewan’s 48 per cent, or Atlantic Canada’s 43.
Brahim Boudarbat, an economics professor at the Université de Montreal’s School of Industrial Relations, says the exodus may stem in part from Quebec having its own immigration program, which can offer quicker entry to Canada than the one Ottawa provides for the rest of the country. “I think some investors are using the Quebec system as a pathway to other provinces,” he says, noting that the Constitution guarantees freedom of movement once a person has been admitted to Canada. “They know that once accepted by either of the two programs, they can go wherever they want.” The sizable portion of investor-class immigrants coming from China and Hong Kong might also be playing a role, Boudarbat adds. “We know that many Chinese immigrants settle in British Columbia. It seems like immigrant investors are moving close to their community.”
Whatever the reason, the trend is cause for soul-searching in Quebec, given how heavily the province is banking on external wealth to drive its future economy. “I think the general question would be: is Quebec a friendly place to do business?” says Jennifer Hunt, a McGill University economist who has studied the relationship between economics and immigration. “Answering that may have a broader economic payoff,” she adds, by stimulating non-immigrant commercial enterprises. It would also come at a cost—in business-friendly tax cuts, say, or less red tape for start-ups. But if the alternative is more years of recruiting foreign wealth for western provinces, Quebecers might find reform comes cheap at the price.
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