Annual Contribution of $2 Billion to the Canadian Economy
TORONTO, March 24 /CNW/ - Three prominent Canadian economists recommend that the Canadian government expand its Immigrant Investor Program, which provides an annual contribution estimated at $2 billion to the Canadian economy.
A study released today by Analysis Group measured the economic impact of the Program, which was founded 25 years ago to encourage the immigration of individuals likely to provide a positive economic and social contribution to Canada. In the study, Roger Ware, Professor of Economics at Queen's University, Pierre Fortin, Emeritus Professor of Economics at Université du Québec à Montréal and Pierre Emmanuel Paradis, Senior Economist at Analysis Group, conclude that Canada should welcome more immigrant investors, as they directly contribute to alleviating the country's demographic and economic challenges.
The authors of the study state that the "Immigrant Investor Program should be not only maintained, but expanded. It is financially profitable from a management standpoint, and results in the presence in Canada of thousands of affluent families who significantly contribute to the economy. Moreover, their demographic profile and the integration of the second generation directly contribute to respond positively to our future economic and social challenges. Also, because they still represent only 3% of new immigrants to Canada, their numbers may well be raised substantially."
Since its inception, more than 130,000 individuals have immigrated to Canada through the Immigrant Investor Program. About 34,400 of these immigrants were principal applicants and the rest were their family members. Program participants must demonstrate a net worth of at least $800,000 (all countries combined), commit to an interest-free investment of $400,000 for five years and possess adequate business and management experience.
Mr. Ware, Mr. Fortin and Mr. Paradis indicate that the Canadian Program is clearly competitive vis-à-vis similar initiatives designed to attract wealthy immigrants throughout the developed world. In addition, they recommend that Canadian authorities leverage the study's analysis as a starting point to optimise the Program's criteria and conditions compared to similar international initiatives and improve its weaker aspects. Specifically, they suggest reducing the processing time of applications, analysing the levels of initial contribution and wealth requirements, and improving the integration of new immigrants.
On the selection process, the study states that "although the number of applications processed reached an all-time high of 3,700 in 2008, it represented only half of the total number of applicants during this same year. A huge inventory has resulted from this excess demand, with nearly 9,000 files still waiting to be processed at the end of 2008."
The benefits of the Program include direct foreign cash inflows, productive use of investor funds, acquisition of personal assets (houses, cars, etc.) and personal consumption items, net productive contribution of immigrant workers and entrepreneurs, and the integration of second-generation immigrants in Canadian labour force and society.
Additional findings of the Analysis Group study include:
- top-5 countries of last permanent residence for immigrant investors
in Canada are China (29 %), Hong Kong (23 %), Taiwan (22 %), South
Korea and Iran. After 1999, mainland China became the main source
country, accounting for 53% of all investor immigrants;
- British Columbia is chosen as the primary province of settlement by
49% of all investor immigrants, followed by Ontario (23%) and Quebec
(22%);
- each immigrant investor is accompanied, on average, by three family
members, which is almost twice as much as in other economic immigrant
categories;
- the majority of immigrant investors were between 40 and 49 years old
at the time of immigration;
- educational attainment has substantially improved over time, as the
proportion of individuals with a high school education or less
dropped from 50% to 30% in recent years after 2000;
- immigrant investors are active players in the Canadian economy,
having acquired an average of $721,500 in personal and business
assets in Canada, including real estate;
- a majority of immigrant investors (82% of respondents) reside in
Canada on average between 10 and 12 months a year. About 90% of them
bought an apartment or house after settling in the country;
- among self-employed immigrant investors, some 30% were active in
business in Canada, with 12% having invested more than $1 million in
business assets;
- about 80% participated in philanthropic activities by donating their
time and/or financial support to a charity organization.
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