On The Consequences of New Caps for Canada’s Startup Visa

Nicolas Laurin
Hong Kong

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On Monday, Canada’s Minister of Immigration, Refugees, and Citizenship announced a sweeping revision for Canada’s Startup Visa (SUV) program, which took effect on the next day.

The revision, which includes a new cap restricting each designated organization (DO) to supporting only ten startups annually, aims to streamline the program and alleviate application backlogs. While it introduces new dynamics, particularly concerning the pricing strategies of DOs, it will enhance the program’s efficiency. 

The introduction of quotas, as seen in the Quebec Immigrant Investor Program (QIIP), can create an imbalance. Initially, the financial intermediaries in the QIIP promised to double the financing options without adding commissions. However, as market dynamics evolved, these intermediaries soon realized that adopting a more equitable distribution system was necessary for effectively marketing the available slots.

There is some concern within the industry that DOs might use the new cap as an opportunity to increase their fees. For example, long-time SUV practitioner Slava Apel recently suggested in a LinkedIn post that potential fee increases could reach 1,000%.

While price increases are a reality, I believe and hope that they will be measured, recognizing that DOs operate within a competitive and regulated environment. 

The issue of DO pricing was notably addressed in the 2019 federal court decision in Kwan vs. Canada. The decision quoted a peer review panel conclusion that a fee of $300,000 was “not normal,” underscoring the importance of maintaining reasonable fees. 

The Startup Visa program aims to attract innovative entrepreneurs who enhance Canada’s economic vitality. Therefore, entry costs must remain within reach so as not to deter talented individuals who could drive future innovation. 

As the government refines the Startup Visa program, it’s important to consider these changes thoughtfully. We must find a balance that improves the program’s efficiency while keeping it accessible and attractive to future entrepreneurs. Such a balance will help maintain the program’s integrity. 

I do not view this change as signaling the end of the program; quite the opposite. I see it as a new phase of opportunity and intend to remain deeply involved in this program’s development for years to come.