P.E.I. withholds $18M in PNP deposits from immigrant investors
Province says most immigrants eligible to have deposits returned in 2016-17 failed to set up businesses
The P.E.I. government brought in $18 million in revenue last year by withholding deposits paid by immigrant investors through the provincial nominee program.
Among the 177 immigrants in the business-impact category of the PNP, who had their deposit money withheld, the province says the "vast majority" did not open a business on P.E.I., even though that was a key component of their agreement with the province.
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Those 177 immigrants represent roughly two-thirds of program participants who were eligible to have their deposits refunded in 2016-17.
We're trying to grow our population ... It's working in ways. Can it be improved? Of course it can be improved.- Heath MacDonald , Minister of Economic Development and Tourism
However, Economic Development and Tourism Minister Heath MacDonald said even though the nominees didn't open businesses, most were still living on P.E.I. one year after arrival. In that regard, he said the program is working.
"So we're seeing, even though they're coming here with the intention to set up a business, they're actually staying. So it's half a dozen of one, six of another for us, to be successful," MacDonald said.
"We're trying to grow our population ... It's working in ways. Can it be improved? Of course it can be improved."
How the program works
Currently immigrants selected through the business stream of the provincial nominee program provide an escrow deposit of $200,000 to the province. Of that, $150,000 is considered the business portion. The remaining $50,000 is the residency portion.
To have the business portion of the deposit refunded, government says the participant must meet the terms of their individual escrow agreement with the province. Those requirements include:
- Physically presenting themselves at the Office of Immigration in P.E.I. within 30 days of landing in Canada;
- Investing a minimum of $150,000 in a local business;
- Incurring at least $75,000 in eligible operating expenses within the first year of operation;
- Managing the business from within P.E.I.
The $50,000 residency portion of the deposit requires the participant maintain a residence and provide proof they lived in P.E.I. for 12 consecutive months.
On that portion of the deposit immigrants were much more successful in obtaining a refund. Only seven defaulted in 2016-17, according to figures provided by the province.
Opposition questions program effectiveness
But Opposition MLA Brad Trivers said if immigrant investors come to P.E.I. and are able to obtain Canadian residency without opening a business, "then the incentive for them to stay probably isn't great."
Really it comes down to essentially a way for new Canadians to sort-of buy their residency in that way, it certainly appears like that.- Brad Trivers, Opposition MLA
"Really it comes down to essentially a way for new Canadians to sort-of buy their residency in that way, it certainly appears like that."
Trivers also said government may be relying on the revenue from forfeited deposits, "to help them with their budget."
The $18 million held back in 2016-17 represents a substantial increase over deposits of $5 million held back through the provincial nomination program the previous year. MacDonald said the money ends up in the province's general revenues where it pays for programs like health care.
P.E.I. leading population growth, not retention
Population growth has been surging on P.E.I., largely thanks to international immigration. But for years the province has struggled to hold on to the immigrants it attracts.
Earlier this year the Atlantic Provinces Economic Council published a study which determined only 41 per cent of immigrants who landed on P.E.I. five years ago were still on the Island.
The P.E.I. government is set to provide an update on its population action plan on Friday, including details on how it intends to attract more immigration to rural parts of the province.
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