Cancelled PNP stream continues to bring in millions for P.E.I. government
For third straight year, PNP deposit defaults worth more than $17 million for the province
One year after the P.E.I. government announced it was shutting down a controversial immigration program, documents show that program continues to be a significant source of revenue for the province.
For the third year in a row, the province took in more than $17 million in revenues from deposits withheld from immigrant investors through the provincial nominee program, according to the latest audited financial statements for Island Investment Development Inc.
IIDI is the Crown corporation that manages the provincial nominee program on P.E.I. The corporation's audited financial statements for the fiscal year ended Mar. 31, 2019, show the province took in $17.4M in PNP default deposits, along with $2M in program fees and $5.7M in deposit-related interest income.
The year before, the province took in $17.6M from default deposits.
Under the cancelled program, immigrant investors provided escrow deposits of between $150,000 and $200,000, and agreed to operate a business in the province for one year.
If they fail to meet the conditions in their agreement within two years of landing in Canada, the P.E.I. government keeps their deposit, and the money goes into general government revenues.
While this particular stream of the PNP has been cancelled, government said Tuesday there is still a backlog of 844 applicants who were accepted into the program prior to its cancellation, who either haven't had their applications processed by the federal government, or haven't reached the two-year window after which their deposit will either be withheld or refunded.
According to IIDI's financial statements, the corporation was holding a running total of $173 million in immigrant investor deposits as of March 31, 2019, down from $215 million the year before.
For years the Progressive Conservatives, in opposition, complained about "chronic mismanagement" of the PNP under the Liberals, and questioned whether the program was simply a government "cash grab."
But Thursday the new PC minister responsible for immigration, Matthew MacKay, pointed to a bright side in the figures.
While 128 immigrants defaulted on their agreements in 2018/19, a further 298 had their deposits refunded, resulting in a compliance rate of 70 per cent, an improvement over previous years.
"I'm disappointed in the defaults," said MacKay. "I don't want to see any defaults, I want to see our population grow."
The defaults in question occurred in the fiscal year before the PCs came to power. MacKay said since the April 23 election government has hired more staff to work with nominees to "find out what some of their struggles are, what some of their challenges are."
He said government is also hiring more staff to monitor compliance.
Since 2007 successive Island governments have taken in a combined $140 million in revenues from PNP deposit defaults.
Official Opposition Leader Peter Bevan-Baker said the annual injection into government's bottom line has become "an important source of revenue."
"But immigration programs were never designed to be sources of revenue, they're designed to bring new people into our communities, to enhance the cultural mosaic we have here, and we're really failing in that account."
Bevan-Baker said the new government needs to redevelop the PNP "to make sure that it actually meets the ends that it is designed for, which is to bring new Islanders here to P.E.I."
Full review underway
MacKay said a full review of the province's immigration programs has been underway.
The most recent figures also show the province has been moving more toward sponsoring workers rather than business owners. Of the 957 nominations for 2018/19, 127 were in business streams of the PNP, the rest in labour-related programs.
For years the federal government expressed concerns about the number of immigrants in P.E.I.'s PNP defaulting on their deposits to the province, citing concerns about "potential misuse" because nominees received their permanent Canadian residence status upon landing in the country.
P.E.I. still has a program to bring immigrant entrepreneurs to the province, but the program no longer requires a deposit, and immigrants don't receive permanent resident status upon landing.
Instead they have to operate their business on P.E.I. for one year, and then wait about one more year while Ottawa processes their permanent resident application.