IRCC Takes Over SUV Administration, Experts Analyze Implications

Immigration, Refugees and Citizenship Canada (IRCC) has taken over sole administration of the Startup Visa (SUV) program, ending its long-standing partnerships with the National Angel Capital Organization (NACO) and the Canadian Venture Capital and Private Equity Association (CVCA).

This decision follows a policy update in April 2024, when the government capped the number of permanent residence applications to no more than ten startups per designated organization to tackle the growing backlog.

IRCC has now chosen not to renew contracts with NACO and CVCA, which were previously responsible for managing the SUV’s three streams by designating venture capital firms, angel investor groups, and incubators or accelerators across Canada.

Faster processing and no more “cozy relationships”

Slava Apel, CEO of Startup Visa Services, notes that many designated organizations had “celebrated the news” that the double reporting to NACO/CVCA and IRCC is “being dismantled.” He explains that IRCC agents were already “deviating from the original spirit of the program”, where NACO was meant to double-check the due diligence of incubators through a process of peer review.

Apel attributes the program’s changes to “the supervising organizations’ lack of control over the designated organizations’ due diligence processes, complaints, and the granting of designation to those ill-equipped to provide proper due diligence or support to startups.”

He notes that the supervising organizations “failed to revoke the designation status from rogue or ‘bad apple’ incubators, angels, or venture capitalist groups, allowing them to issue letters of support to undeserving applicants,” leading to a surplus of applications and a backlog of over 16,000.

The decision to not renew contracts with NACO and CVCA comes as IRCC looks to “address ongoing challenges in the program,” according to a spokesperson for the CVCA.

Chris Lennon, President & General Counsel of Empowered Startups, believes that “Canada will not be adding any more designated entities to the SUV program anytime soon.” He reveals the “IRCC realized that too many new designated entities were added to the program over the past couple of years and they want less designated entities because they are trying to bring the overall volume of applications down.”

Apel believes that “the positive outcome should be faster processing times and more challenging questions for applicants,” as “IRCC agents not being experts in due diligence” leads to “anti-business growth logic” questions.

He advises applicants to “provide a well-structured business proposal and demonstrate visible business progress in a way that allows the government to self-answer and avoid additional due diligence requests.”

Lennon clarifies that “the end of peer reviews does not mean that designated entities won’t be required to explain their due diligence.” Instead, they will hold these discussions directly with IRCC officials, not representatives.

He notes that “no legitimate SUV applicant should be concerned by this change, unless, of course, you are an SUV applicant brought into the program by a consultant on the belief that they had a cozy relationship with the industry association and could get your file through peer review.”

As IRCC conducts a review of the SUV program, the future of the program’s administration remains uncertain. If IRCC determines a new contract is needed, the government will post a tender on CanadaBuys.

In the meantime, at least ten other organizations are no longer listed as designated organizations for the SUV, as revealed by a comparison between the federal government’s current list of designated organizations and an archived version of the same page from earlier this year.