Banks look to immigrant market for growth

English: The Montreal head office of the Royal Bank of Canada is the Place Ville-Marie's largest tenant (Photo credit: Wikipedia)

ORA MORISON
The Globe and Mail


Major banks are duking it out to attract Canadian immigrants, a key market in a retail banking sector that is grappling with an aging population and a tighter lending environment.

Some of Canada’s largest financial institutions are offering unsecured credit cards, multilingual banking services, periods of no-fee banking and help sending money to relatives overseas.


Banks are looking to the immigrant market in a bid to broaden their retail divisions; as the growth of the Canadian-born population slows, these newcomers represent a key category for banks and the economy as a whole.

“It’s really somewhat of a clear-cut business case,” said Paul Sy, director of multicultural markets at Royal Bank of Canada. “The forecasts are quite clear that Canada is an aging population. Moving forward, newcomers are really the key source of growth and will be fueling the … growth of the Canadian economy for years to come.”

The most recent census showed two-thirds of Canada’s population growth over the previous 10 years came from immigration. In 2010, about 280,600 immigrants became permanent residents in Canada, more than in any of the 50 preceding years. Some projections show immigration will account for 72 per cent of growth by 2036.

“These are great new customers to the bank,” said Winnie Leong, vice-president of multicultural banking at Bank of Nova Scotia, which, like many other banks, has started to market unsecured credit cards to recent immigrants.

Traditionally, a lack of credit history barred recent immigrants from taking out loans or applying for a mortgage until they built a credit history; that often meant starting from the ground up with a secured credit card for $1,000 or less.

When Kamal Jain came to Canada 40 years ago with a master’s degree in engineering. In his first 18 months here, he found work as an engineer, saved enough money to buy a car without taking on debt and had started to save money. Still, he was denied a credit card because he had no credit history.

“I remember telling [the bank] that there could be no better credit record than not having to have taken a loan at all and still managing to accumulate the necessities of life, paraticularly having come here with less than $400 in my pocket 18 months prior,” Mr. Jain said.

Decades later, Canadian banks are trying to woo customers like Mr. Jain.

Similar to Scotiabank and Canadian Imperial Bank of Commerce, RBC’s unsecured credit card for newcomers has a base limit of $1000, an interest rate of 19.99 per cent and a monthly fee, which is waived for the first six months. The limit may be increased on a “case-by-case” basis, Mr. Sy said.

Ronald Miranda, originally from the Philippines, said that although he had a job lined up in Canada, he arrived in the country with less than $1,000 in cash. In the beginning, money was tight and having access to a credit card at Scotiabank made things much easier, he said. Mr. Miranda and his wife now have a joint $10,000-limit credit card.

While these products can be helpful, offering unsecured credit cards to immigrants introduces them to risks too, said Adam Fair, a program manager for the Canadian Centre for Financial Literacy.

“Some people come from countries where they didn’t even have credit or credit cards … there needs to be a good understanding of what credit is useful for, how it can be helpful, but how it can also be harmful,” he said.

The immigrant unemployment rate is close to double the figure for the population as a whole. In 2011, 14.2 per cent of immigrants who had been in Canada five years or less were jobless, compared with 7.4 per cent for all Canadians, according to Statistics Canada. Nearly two thirds of immigrants experience periods of low-income during their first 10 years in Canada.

Still, it’s clear why the banks are targeting this group, Mr. Fair said.

“A lot of newcomers come highly educated and if they are able to adapt and establish themselves in Canada, they and their family could be lifelong customers of that institution,” he said.

Luis Meza, for example, first met an RBC representative while still living in his native Venezuela. After having lived in Canada full-time for about a year now, Mr. Meza has a mortgage, car loan and $20,000-limit credit card with the bank.

He launched a cafe in Ancaster, Ont., when he settled in Canada and does his business banking with RBC too.

Mr. Meza provided statements from his bank in Venezuela and that was enough for RBC to assess his credit-worthiness.

“It’s about the potential of the market,” Mr. Sy said. “From what we’ve seen, there’s a strong determination by newcomers to succeed.”

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Tax in Canada and the US: the differences that really matter

taxes (Photo credit: 401(K) 2012)

by Moodys LLP Tax Advisors on 8/29/2012

[author: Kim G C Moody CA, TEP]

Many people assume that the US and Canadian tax systems for individuals are similar. Not true. There are some important differences. Accordingly, the purpose of this article is to point out some of these important differences that can cause problems for the uninformed. By no means is this article intended to be exhaustive... simply informative.

1. How individuals are taxed

The US is one of the only countries in the world that taxes on a citizenship basis. If you are a US citizen or a US "green card" holder, your income is taxed on a worldwide basis pursuant to US law no matter where you reside. Many people are not even aware that they are a US citizen. This issue is a complex immigration matter and often will require a US immigration lawyer's assistance.

Canada, does not tax on a citizenship basis. Instead, like most countries around the world, Canada taxes on a residency basis. To the extent that you are a "resident" of Canada, you are taxed on your worldwide income. There is no statutory definition of residency in the Canadian Income Tax Act and therefore the common law on such a subject is relevant. The Canada Revenue Agency's administrative views are published in Interpretation Bulletin IT-221R3. Simply put, Canada's system of residency is very much a "facts and circumstance" test. In other words, an individual's facts and circumstances will determine whether or not they are resident in Canada for income tax purposes. The US also taxes residents but the determination of residency is a statutory test and is dependent upon the number of days that the individual was physically in the US during the current year and the previous two years. This test, the so-called "substantial presence" test, is formulaic and objective (we briefly discuss the substantial presence test in our January 5, 2009 blog). Accordingly, a US citizen who is resident in Canada would be subject to double taxation (both from the US and from Canada) were it not for the Canada-US Income Tax Treaty (the "Treaty"). Such a Treaty (one of many that those countries have in place with other countries around the world) does an admirable job of eliminating double taxation for such a person. However, the Treaty is not perfect and in some cases the US citizen who is resident in Canada can be subject to adverse tax consequences if their affairs are not planned carefully.

2. The US has an estate tax... Canada does not

The US has an estate tax that applies on the value (as opposed to gains) of a decedent's estate. The US estate tax applies to its citizens and to people who are "domiciled" in the US. Domiciliary is a facts and circumstances test and therefore people who are not US citizens have to be cognizant of whether or not they are domiciled in the US so as to try and avoid the US estate tax upon death. The US estate tax also applies to non-citizens and non-domicillaries to the extent that such people hold US situs property (such as US stocks and US real property). At present, US citizens are exempt from the US estate tax on the first US $5.12 million of value of the estate. This eliminates most, but not all, of US estates from the application of the estate tax. At its highest marginal rate, the US estate tax is presently at 35 percent.

Prior to 1972, Canada also had an estate tax. However, the Canadian estate tax was abolished effective January 1, 1972 and instead replaced with a system that forces the recognition of any unrealized gains immediately prior to death. Such gain recognition is subject to many exemptions and deferrals. Canada also taxes certain registered pension assets (such as Registered Retirement Savings Plans or Registered Retirement Income Funds) upon the death of the Canadian resident but, again, the taxation of such amounts are subject to certain exemptions and deferrals.

Accordingly, the US estate tax and the Canadian "deemed disposition" tax can cause significant issues for a US citizen who is resident in Canada upon death. Similarly, it can cause significant problems for a Canadian resident (who is a non-US person or not domiciled in the US) who owns US situs property on death. The Treaty has limited provisions that attempt to reduce the negative exposure of the application of the two "death tax" systems but such provisions usually result in minimal relief and therefore it is crucial for affected persons to plan carefully.

3. How corporations are taxed

The US has certain corporate entities that enable income to be earned by such entities but taxed at the "shareholder" level (this is often referred to as a "flow-through" vehicle). This can be very beneficial for US persons since it can often eliminate double taxation which can sometimes arise with the use of corporations. Canada does not have a similar regime. All income realized by a Canadian corporation is taxed at the corporate level. Any after-tax corporate amounts paid to a shareholder will normally be taxed as a dividend. This can lead to double taxation for the shareholder of Canadian corporations if not properly planned.

The US also has unique flow-through entity called a Limited Liability Company ("LLC"). Accordingly, it is very common for a US tax advisor to recommend the use of a LLC to a Canadian resident person when they are considering investing in the US. However, the use of a LLC for a Canadian resident investor is most often not a recommended entity since the LLC will not be a "flow-through" vehicle for Canadian tax purposes (but it may be for US purposes). This can cause significant tax problems that could result in double taxation.

Accordingly, it is critical for Canadians who wish to invest in the US to get proper tax and legal advice to ensure that double taxation will not result from the realization and repatriation of profits back to Canada. Similarly, it is crucial for US persons to get proper tax and legal advice to ensure that the ultimate tax burden is acceptable to the extent that they are investing in Canada.

4. Foreign reporting regime

Both Canada and the US have reporting regimes that they impose on their taxpayers to the extent that such persons hold assets or earn income outside of their country. In the US, the most common report is the so called "FBAR" (Form TD F 90-22.1). To the extent a US person has ownership in or signature authority over certain foreign accounts then the FBAR will need to be filed on a timely basis. Failure to file comes with a $10,000 penalty but if the failure to file is willful the penalty escalates to the greater of 50 percent of the highest account balance during the year or $100,000. Also, there is an additional foreign reporting requirement that is new for 2011 – Form 8938 – that must be filed by US persons who own "specified foreign financial assets" if the value of such assets exceeds certain thresholds which vary according to filing status.

For Canadian residents, to the extent that they hold specified foreign property with a cost of $100,000 or greater, prescribed form T1135 will need to be filed on a timely basis (we have written about this before and you can read about it here). The penalties for not filing are to a maximum of $2,500 but can be subject to an additional level of penalties which can escalate quickly. To the extent that Canadians have foreign affiliates, then a separate foreign reporting regime exists.

5. Taxation of the same source of income

Our firm has written on this subject in our blog of December 14, 2011. Rather than spill more ink on this subject, suffice to say that a US citizen resident in Canada must be very careful and aware of how the same source of income is taxed in Canada and in the US so as to potentially avoid nasty surprises.

6. Canadian departure tax versus US departure tax

Since Canada taxes on a residency basis, Canada will no longer have the right to tax that person to the extent they become a non-resident of Canada (with the exception of certain Canadian source income that such a person may receive). When a person becomes a non-resident of Canada, the Canadian tax rules impose a "departure tax" which, generally, will cause a deemed disposition of the person's assets at fair market value thus triggering any accrued gains or losses on such properties. The deemed disposition rules are subject to many exceptions. In a worst case scenario, the Canadian departure tax can cause significant liquidity problems. Notwithstanding, the resulting tax liability must be paid or adequate security provided to the Government of Canada. Thus, careful planning must occur to the extent that the person is considering becoming a non-resident of Canada for income tax purposes.

The US also has a departure tax known commonly as the "expatriation tax." The US expatriation tax applies to US citizens who renounce their citizenship and to certain long-term residents who lose US residency. Determining whether you are a long-term resident and whether you have lost US residency is complicated. But know that losing US residency for purposes of the expatriation tax is surprisingly easy. For example, failing to waive tax treaty benefits to which you are entitled may result in the US expatriation tax applying. If you have renounced your US citizenship or lost your long-term US residency, the expatriation tax will apply if any of the following are true:

• Your average annual net income tax for the last five years is more than US $151,000 (this amount is adjusted for inflation). Because of the foreign tax credit, it is somewhat uncommon for Canadians to owe this much in US tax.
• Your net worth is at least US $2 million.
• You are not in compliance with your US tax obligations.

When the expatriation tax applies, it works like this: Pretend that all of your assets are sold for their fair market values and you recognize a gain or loss on these sales. Add the gains and losses together. Then subtract $651,000 (an amount adjusted for inflation) from your net gains. If the number is positive, you will owe tax on the remaining amount. There are ways to defer paying this tax, but doing so involves posting a security bond with the Internal Revenue Service ("IRS").

7. Paid tax preparers

In the US, only tax preparers who have a Preparer Tax Identification Number ("PTIN") are able to prepare US income tax returns and charge a fee for such. In Canada, no such system exists although our firm has written recently that we believe Canada should have a similar system and are hopeful that Canada will shortly follow suit.

Accordingly, for US citizens who are resident in Canada, one of the challenges they face is finding a tax preparer who is capable of preparing both their Canadian and US tax returns and who has a US PTIN. There are not many Canadian firms who have professionals who hold valid US PTINs. In fact, according to the IRS there are only 2,392 such individuals in all of Canada, and only 274 in Alberta. At this time there is no easy way to determine whether an individual holds a valid PTIN but the IRS recently announced this information will be available on its website.

Concluding comments

The above represents many, but certainly not all, of the fundamental differences between Canada and the US tax systems. As always, the devil is in the details, which are complex and can sometimes produce surprises and counter-intuitive results. We will continue to highlight the more common differences in our articles and blogs.

Related articles

• An unnecessary overreaching of U.S. tax law into Canada

Canada has lesson to learn from Australia in foreign student policy

Graph showing international students at Melbourne University by region of origin as well as the top five countries (Photo credit: Wikipedia)

By Diane Francis, National Post

Friday, Aug. 24, 2012

Canada is finally moving toward a smart, two-step immigration policy, like Australia and others have, that will recruit talent through a targeting policy of foreign student education.

Australia’s success has been widely disseminated and last week a blue-ribbon federal task force in Canada released a report that would emulate its policy. The number of foreign students allowed entry into Canadian institutions should nearly double in a decade and those who graduate from Canadian institutions should be eligible to remain, rather than having to return home and wait years to get in.

Most foreign students in Canada get their degrees and never come back. Most Australians apply to remain and the majority stay.

The next step will be consultations across the country and the new policy will likely become part of the reforms being developed by Immigration Minister Jason Kenney.

Most foreign students in Canada get their degrees and never come back. Most Australians apply to remain and the majority stay

Australia currently has 256,087 international students, mostly post-secondary, slightly ahead of Canada’s 239,130. The Canadian task force recommends that this be increased to 450,000 in a decade without taking places from Canadians.

Canadian universities and other educational institutions have catered to this market but Australia has outclassed Canada’s efforts by pooling their marketing efforts.

Ottawa should emulate the [external] studyinaustralia.gov.au website, where anyone can research educational opportunities, by courses, majors, institutions, regions, cities. Its “wizard” feature allows users to deep-dive into concrete information about housing, scholarships, fees, tuition and living expenses. In Canada, the [external] studyincanada.com website offers incomplete information. A cursory review of university websites found that fees and other information were unavailable.

Australia charges more than Canadian institutions because along with graduation comes immigration eligibility, providing criteria are met. Another benefit of the Australian method is that outcomes for immigrants are far superior than immigrant outcomes in Canada, where unemployment among so-called university-educated immigrants is four times’ higher than for Canadians with university degrees.

Canada needs this tool to attract skilled and educated workers who will immediately be successful in the country because they have assimilated and have bona fide credentials.

And Canada can charge more too:

– The University of Melbourne charges bachelor of commerce international students $32,700 annually compared with $26,900 at the University of Toronto, $25,400 University of Alberta and $25,300 for UBC.

– Melbourne charges international students studying engineering $33,000 a year compared with $30,400 at U of T and $23,300 at U of Alberta.

– Medical school for international students in Australia is more than $55,000 a year and $36,500 at University of Toronto, according to its website.

Worse yet, there are inadequate places for Canadians at Canadian medical schools and the result is that hundreds of Canadians go to Australian medical schools, and virtually all stay, according to University of Melbourne Professor and immigration specialist Lesleyanne Hawthorne.

(This points out another needed immigration reform. As Canadians go abroad to become doctors because foreigners have taken their places, foreigners who study here cannot stay to practice medicine because they must go home and re-apply. No foreign credentials, Australian or even American, are recognized by Canada’s protectionist medical profession.)

“Canadians who graduate from Australian medical schools are immediately licensed and get residencies. We are keeping 92% of our Canadian medical students. Now dental students from Canada are coming to Australia in large numbers for the same reasons,” said Ms. Hawthorne at a recent conference into immigration at the University of Calgary.


By offering eligibility with an education, universities here can up their fees substantially, and provide more spaces for Canadians.

The Australian system also picks and chooses among international students, selecting those with credentials that are in demand and rejecting those who have not adjusted to the culture or who have not behaved properly. Since 1999, some 630,000 foreign students have been allowed to immigrate in Australia and have achieved superior outcomes compared with immigrants who have never lived or studied there first.

“By 2006, at a time of sustained economic boom, labor market participation rates were strong in Australia for former international students. Ninety-five percent were employed, compared with 93 percent of those recruited offshore — a far more positive level of engagement than 1999-2000 arrivals (62 percent),” said an article about the Australian immigration experience published a few years ago in Canada’s Policy Options.

However, one caution is that if Canada hurtles headlong into doubling foreign student populations governments must be wary of the proliferation of private-school rackets offering diplomas as a means of gaining entry for unacceptable, unqualified persons.

“Serious abuses in Australia were uncovered, at a time when vocational private-sector quality assurance mechanisms were poorly developed,” said the Canadian report. “By May 2009, international student enrolments in vocational education and training were growing by 50 percent per year, compared with just 1 percent in the tertiary sector. There was a growing concern that ‘widespread rackets among private trade colleges were…undermin[ing] Australia’s education, immigration and employment systems.’”

Such hazards can be averted by putting safeguards in place to monitor providers of “education” to foreigners. If not, a proliferation of schools will result, handing out worthless diplomas and credentials as backdoor entries into Canada.

http://www.financialpost.com/m/wp/diane-francis/blog.html?b=opinion.financialpost.com/2012/08/24/canada-has-lesson-to-learn-from-australia-in-foreign-student-policy

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Immigrants, young buyers to buoy home sales, CIBC says

English: Kings Grove, Longniddry This residential area was built during the early 1970s. At that time, the post-war "Baby Boomers" had entered the housing market, creating a big demand for accommodation within easy commuting distance of Edinburgh. (Photo credit: Wikipedia)

CBC News Posted: Aug 23, 2012 12:55 PM ET
A large bubble of people in their prime home-buying years, coupled with an influx of immigrants, is poised to support Canada's housing market for the next decade, a major bank economist said Thursday.

Benjamin Tal of CIBC put out a report on Thursday in which he argued that Canada's population demographics are working in favour of the country's housing market.

Canada is facing a well-documented demographic pinch over the coming years, as Baby Boomers retire and seek to cash out their homes to finance their retirement. Experts have gotten increasingly concerned on the impact this boomer bulge will have on the job market and the housing market.

But beneath the numbers, Tal sees some reasons for optimism. Although the 55- to 74-year-old age group will see the largest population increase in the next decade, the second-largest will come in the 25-44 group. That's the prime home-buying demographic, with recent research suggesting 18 per cent of that group buys a home in any given year.

"In other words, the group that is most likely to buy a house will grow faster in the coming decade," Tal said.

Canada is forecast to see a decrease in the 45-54 demographic, but historically, that group represents a very small percentage of home buyers as people are typically late career with established families, making them less likely to move.

Down the line, there's a concerning 170,000 decrease expected in the number of Canadians under 25. But the "low propensity to buy among this age group will limit the damage" at least until 2022 and beyond, Tal said.

 REAL ESTATEMapping average home prices across Canada
Secondly, immigration will act as a key supporter for real estate demand. Most of the growth in population is now due to immigration, Tal writes, and that bodes well for the housing market over the next decade.

While immigrants often face many hurdles integrating into society while finding a home and employment upon first arriving in Canada, the numbers show a significant uptick in home ownership after three years.

Indeed, "after ten years in Canada the propensity among immigrants to own a house is higher than among native-born Canadians," Tal writes.

In the short term, Tal agrees with the consensus of economists who expect some sort of modest contraction in the housing market, after years of outsized gains fueled largely by low borrowing rates. But longer term, the particulars of Canada's population should help keep the real estate market sustainable.

"While housing market activity is projected to soften in the near-term, the good news is that any adjustment will not be aggravated by negative demographic forces," Tal says.

"At least for the next decade, demographic forces will be strong enough to mitigate the damage and probably shorten the duration of the upcoming market adjustment."

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Canada’s new immigration rules put premium on young people

Happy Canada Day (Photo credit: Anirudh Koul)

BILL CURRY
OTTAWA — The Globe and Mail


New immigration rules will target workers aged 18 to 35 as the Conservative government provides the clearest sense yet of how Canada will rely on young immigrants to soften the fiscal pain of a demographic crunch.

The federal regulations reveal a sweeping overhaul of the points system used by Canada for approving foreign worker applications.


The new points grid provides details that are in line with previous government pledges to gear the immigration system toward younger workers with strong language skills in English or French who already have a job lined up in Canada.

Under new rules that will take effect next year, workers aged 47 and over will receive no points for age, compared with 12 for those between 18 and 35, the most coveted age group under the Federal Skilled Worker Class of immigrants.

The available points for applicants decreases by one for each year above 35.

The government says the change, announced over the weekend, is based on clear evidence that older immigrants are much less likely to succeed in the work force, although that position is not without its critics who say that the government points system should be more flexible.

Driving the change is the concern that the ratio of working-age Canadians to retirees is shifting dramatically.

“An aging population … represents a significant policy challenge for Canada,” a federal analysis of the changes says. “The immigration of young people able to work at relatively high wages for a number of years can help lessen the consequences of this phenomenon.”

Independent research supports the government’s claims that younger immigrants perform better financially, but some say there shouldn’t be hard and fast rules.

“The next Frank Stronach could be 38 years old, and then what do we do?” said Ratna Omidvar, president of the immigration-focused Maytree Foundation and board chair of the Toronto Region Immigrant and Employment Council. “I think a little less rigidity would be preferable.”

On language, the new rules will give significantly more points to applicants who have strong language skills in either English or French, but points for speaking both official languages will be cut in half from eight to four.

Some immigration experts say this could, at least temporarily, have the effect of curbing immigration from regions with relatively poor average English or French skills like China and South Asia.‬ A spokesperson for Immigration Minister Jason Kenney rejected such theories as “innapropriate.”

In addition to changing the Federal Skilled Worker Class, the new regulations also create a new Federal Skilled Trades Class and updates the Canadian Experience Class, which was created by the Conservative government in 2008.

Over all, the changes aim to help employers bring in the workers they need and make it easier for temporary workers to apply for citizenship while in Canada. The rules also decrease the points for work experience outside of Canada.

Citizenship and Immigration has posted an extensive rationale for the changes in the Canada Gazette, citing numerous academic studies to support specific measures.

One of the cited researchers, McMaster University economics professor Arthur Sweetman, who co-authored a paper called “Immigrant Earnings: Age At Immigration Matters,” says the federal age rules are clearly supported by data.

“It makes a lot of sense,” he said. “Immigrants who arrive later in life – on average – have a lot more difficulties in the labour market.”

However, on the broader objectives of the federal rules, Dr. Sweetman noted that the government discusses how they will benefit employers and new immigrants, but is silent on their potential impact on existing Canadian workers.

“If you were going to design an immigration system that was going to help employers keep wages low, this is pretty close to what you’d want,” he said, noting that it will be important to ensure employers are really making an effort to find Canadian workers before turning to the immigration system.

NDP immigration critic Jinny Sims said the government’s approach to changing demographics seems poorly thought out. She said that listing workers over 35 as “too old” to come to Canada seems at odds with the government’s plans to have Canadians work until 67 before qualifying for Old Age Security.

“It just doesn’t make any sense,” she said.

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Chinese continue to seek residency overseas

English: The Great Wall of China, near Beijing in July 2006. This is a section of Mutianyu. (Photo credit: Wikipedia)

By Cheng Guangjin in Beijing and Li Xiang in Paris (China Daily)

Print Mail Large Medium  Small 1

Despite tightening immigration rules in many destinations popular with Chinese immigrants, the number of applicants — who have growing wealth and a desire to live elsewhere — continues to rise.

This year it has become even more difficult for many Chinese citizens to realize their immigration dreams, as most of their favorite destinations are adjusting immigration rules with higher qualification requirements and fewer openings.

Canada announced in late June that it would temporarily suspend new applications to the Federal Skilled Worker Program and Federal Immigrant Investor Program, effective on July 1. The government is expected to accept applications again in January.

Meanwhile, Quebec, a province of eastern Canada, has limited the maximum number of investor applications between March 21, 2012, and March 31, 2013, to 2,700.

"This has been a heavy blow to new applicants, applicants being processed and the immigration intermediaries in China like ours," said Ding Wei, director of the Canadian immigration department at JJL Overseas Education, a Beijing-based education and immigration intermediary.

According to Ding, many ongoing application cases in his company have stalled.

"Applicants being processed have to wait longer, with a higher chance of being turned down," Ding told China Daily.

Canada is not alone in having new immigration rules.

Australia, for which China is the biggest source of immigrants, on July 1 introduced a new Skilled Migrant Selection Model, one of the biggest changes to the Australian immigration system in years.

The new system will be less convenient for prospective immigrants to Australia. They will have to wait probably about six months to find out if they are allowed to make an application.

According to Ma Jing, who is in charge of the Australian immigration department at JJL, the new model has higher requirements, including education, language ability and business experience.

Because more detailed rules have yet to come out, "now is a transition period with fewer new applicants to Australia", Ma said.

However, Ma is optimistic about a continued increase in the number of new applicants in the future.

"Generally speaking, it has become more and more difficult to move to other countries with higher requirements, including investments, but Chinese people's wealth is also on the rise," Ma said.

Ding said that people may turn to other countries such as the United States and some European countries instead of Canada, since not all news is bad news.

The US on Aug 14 directed young illegal immigrants to fill out new forms and pay $465 if they wanted to apply under a new program that will let them avoid deportation and obtain a US work permit.

Earlier this month, the US Congress agreed in principle to a three-year reauthorization of the EB-5 Regional Center Program, which grants residency permits to foreign investors, a program that is due to expire in September.

Ding is not surprised: "The US knows well the benefits to the development of its regional economy and employment as a result of Chinese investors."

In Europe, at the French Senate's Judicial Committee hearing on July 24, French Interior Minister Manuel Valls signaled that the new Socialist government of President Francois Hollande intended to make changes to French immigration law.

Valls' plans would make it easier for foreign students to work in France after their graduation, said Daniel Kahn, founding partner of French law firm Kahn & Associes in Paris.

Furthermore, if other measures are made regarding the residence and work permit authorization, the lives of foreign employees in France will be more stable, and they will be encouraged to settle in France for good, Kahn said.

Kahn noted that the French government recognizes that non-EU students who have graduated from French universities are an asset to the French economy.

"All companies established in France will benefit from this change in French immigration law," he said.

Many Chinese students are studying in France. Some of them graduated from the most famous French business, commercial and engineering schools and institutes of political science.

"They speak two or three languages and have a Sino-French cultural background," said Kahn.

"The new immigration policy should enable many of them to find suitable and interesting positions in French companies and obtain the appropriate work permit."

No matter how the rules are changed, people's wish to live elsewhere simply won't fade.

Ma said that many of her clients have children who study abroad.

"They feel it's a pity if their children spend years studying in a foreign country without obtaining citizenship there. So they apply for immigration, which can also help their children," Ma said.

"People also want to have a life with less pressure and to enjoy a better pension when they grow old after emigrating to countries like Australia," Ma said.

As for businessmen who travel around the world from time to time, a foreign passport can mean less time waiting for a visa, compared with a Chinese passport, Ma said.

Yao Lei, 29, a senior system administrator on global infrastructure in the IT industry at a US company in Beijing, will soon join the middle-class force with a good salary.

But he has found new momentum for life after making a decision to emigrate to the US.

He plans to acquire permanent residence under the EB-1A category, which is for immigrants who can demonstrate extraordinary ability, with the help of his US-based company. He has found that his specialty is increasingly in demand, even in the US.

"I think I can get a higher salary, a life with less pressure and easier access to educational opportunities for my children in the future," Yao said.

Contact the writers at chengguangjin@chinadaily.com.cn and lixiang@chinadaily.com.cn

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New immigration system will award more points for language, fewer for work abroad

Nicholas Keung
Immigration Reporter

Ottawa is revamping the point grid it has used for the past 10 years to judge skilled-immigrant applications. The proposed revisions, to go into effect next January, will put more emphasis on language skills and professional credentials equivalent to Canada’s — while de-emphasizing work experience abroad.

This would be the first major overhaul of the immigration point grid system since 2002, when the Liberal government of the day lowered the passing mark and jiggled minor point allocations.

Under amendments to the federal skilled-worker program published Friday, language proficiency — a strong indicator of how well new immigrants do economically — will become the most important factor in whether applicants are approved, worth a maximum of 28 points, up from 24.

The total “passing” mark will remain at 67, but the revised grid will favour younger immigrants by awarding a maximum of 12 points for applicants in the 18-35 age bracket. Applicants over 46 would get 0 points.

Citizenship and Immigration Canada is also proposing to reduce the total number of points given for work experience from 21 to 15, and increase the years of experience required to achieve full points from four years to six.

“These changes will reflect the relative value Canadian employers place on foreign work experience, and redirect points to language and age factors, which are better indicators of success,” said the government statement. .

“Education points would be awarded based on the equivalent Canadian educational credential and points would be redistributed in recognition of the credential’s relevance in the Canadian labour market.”

Applicants with a background in a regulated occupation (medicine or accounting, for example) must also submit to a foreign educational credential assessment by the relevant professional body to establish that a credential earned abroad is equivalent to Canadian requirements.

To address a perpetual labour shortage in the construction industry, Ottawa has also proposed creating a new federal skilled-trades class, which would also be open to people working in natural resources or agriculture production, as well as chefs, cooks, bakers and butchers.

But such applicants need to meet other criteria as well, including having an offer of employment or a provincial certificate of qualification; language proficiency; and 24 months of work experience in the same skilled trade over the past five years.

Changes are also contemplated to the Canadian Experience Class, which allows highly-skilled foreign nationals with Canadian work experience, or graduates from a Canadian university, to apply for permanent residency.

The government is proposing to reduce the work experience required from the current 24 months to 12, over the preceding three years.

Details of Revised Federal Skilled Worker Program Released

osted on August 19, 2012

Skilled tradespersons in eligible vocations like construction work will be able to apply for Canadian permanent residence under the new Federal Skilled Trades Program (FSTP) (Paul Keheler)

Citizenship and Immigration Canada (CIC) unveiled information on Friday about the new Federal Skilled Worker Program (FSWP) that will be launched in the new year.

The revised program will have more demanding language requirements, more selective credential assessment, and will give preference to Canadian work experience over foreign work experience, among other changes.

CIC placed a temporary freeze on the acceptance of new applications for the FSWP on July 1st to give the immigration department time to instate change that it said were needed to address shortcomings in the program.

The following are the major changes to the FSWP that were announced in Friday’s release:

Increasing the maximum points awarded for proficiency in an official language, from 16 to 24 points
Awarding a maximum of 12 points to applicants aged 19 to 35, and decreasing the points awarded until age 46
Reducing the maximum number of points awarded for foreign work experience from 21 to 15
Eliminating points awarded for spousal education and awarding points for spousal language proficiency instead
Awarding a maximum of 10 points for Canadian work experience
Awarding points for foreign education credentials based on an assessment of the foreign credential’s equivalent value in Canada as assessed by an organization that is designated to provide credential assessment and authentication
New Federal Skilled Trades Worker Program

In addition to the changes to the FSWP, CIC also announced the details of a new Federal Skilled Trades Program (FSTP) that will be open to tradespersons skilled in eligible trade occupations.

The requirements announced for the FSTP are:

An offer of employment of a duration of least one year from up to two Canadian employers or a Certificate of Qualification from a provincial or territorial Apprenticeship Authority.
Proficiency in an official language
At least two years of work experience in an eligible skilled trade in the last five years
Required qualifications in the skill trade as described by the National Occupational Classification (NOC)
Changes to the Canadian Experience Class

As forecasted by CIC earlier in the year, the Canadian work experience required to qualify for the Canadian Experience Class (CEC) program will be reduced from 24 months to 12 months, to allow temporary foreign workers in Canada to more quickly qualify for Canadian permanent residence status.

Source: http://www.cicsnews.com/?cat=331

Is the Canadian economy in trouble?

By Kevin Press, BrighterLife.ca
June 20, 2012 Topics: Today's economy Comments (24)
“Conditions in the international financial system are fragile.” That is how the Bank of Canada chose to begin its latest Financial System Review, released on June 14. The report goes on to note that our domestic financial system “continues to be robust.” But that good news comes despite a host of risks to the system and to the Canadian economy, including the eurozone sovereign debt crisis, a slowdown in other advanced economies and potential trouble in the Canadian residential real estate market. Consistent with December’s report, the Bank says the risks facing the Canadian financial system are “high.”

I was in to see Sadiq Adatia, chief investment officer of Sun Life Global Investments, last week so I asked him what he thinks about the outlook for Canada. He wasn’t optimistic. After talking about his confidence in the U.S. recovery, he told me: “Canada is turning a corner too, but in the opposite direction.” We may not see gross domestic product growth above 2% this year.

Adatia sees five problems:

Household debt. “We’ve had a great run in our markets, fuelled by consumer spending,” Adatia told me. “Consumers have added a ton of debt to their balance sheets.” Indeed, we learned on June 15 that Canada’s household credit market debt (consumer credit, mortgage and loan debt), measured as a percentage of personal disposable income reached 152% in the first quarter of this year. That’s a new record. Actual borrowing has slowed, but income has too. According to the Bank of Montreal (BMO), the percentage of Canadian households with debt-service ratios above 40% of income – a level considered to be vulnerable by lenders – has risen over 6%. That’s “slightly above the past decade norm,” reports BMO.
Housing prices. Adatia thinks a double-digit drop in prices is possible. “We think there’s going to be a pullback across the board,” he said. “Some regions may be hit harder than others, but I think a 5%-to-15% drop is definitely in the cards.” That may be a conservative call. Across Canada, home prices are up 12% relative to where they were before the most recent recession.
Global factors. No surprise here: There’s trouble in Europe, a slowdown in China and the U.S. recovery (while it gives Adatia reason for optimism) remains vulnerable to global economic factors. These are all potential threats to Canada. By the way, Adatia does not believe there will be a hard landing in China.
Rising interest rates (eventually). Adatia doesn’t expect the Bank of Canada to move on rates this year, but they may start to come up in 2013: “Until we see a better resolution in the eurozone and a stronger U.S. economy, the Bank of Canada is not going to jump out too far ahead, particularly given that the U.S. Federal Reserve has already said it’s not going to raise rates until 2014.” When it happens, higher rates will dampen spending by a lot of highly indebted households.
Unemployment. “We’re probably going to see unemployment move up,” said Adatia. “I’m not convinced the employment picture is really as strong as it looks right now.” The four points listed above could each contribute to job losses.
Are we headed down a path similar to the one Americans took toward the end of the last decade? “These are the same things that were going on in the U.S. economy before it faltered,” Adatia told me. “We’re probably where the U.S. was a few years back.” Meanwhile, the U.S. housing market is showing signs of stabilization and according to the Federal Reserve Bank of New York, Americans have slashed their debt by about $100 billion since the fourth quarter of 2011.

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