Canada Restricts SUV Application Volume to Tackle Backlog

---

On April 29, 2024, Marc Miller, Minister of Immigration, Refugees, and Citizenship, announced several changes to Canada’s federal business programs. These changes, which take effect on April 30, 2024, aim to reduce processing times and the application backlog.

To improve the Start-up Visa Program (SUV), the government will encourage designated venture capital firms, angel investor groups, and business incubators to focus on the most promising proposals. 

To achieve this, the government will:

• Cap the number of permanent residence applications the government will accept for processing each year to no more than ten start-ups per designated organization.
• Provide priority processing for entrepreneurs whose start-up is supported by Canadian capital or by a business incubator that is a member of Canada’s Tech Network, including applications in the inventory and new applications as they come in.

Slava Apel, CEO of Startup Visa Services, illustrates the severity of the current situation: “The government of Canada has been taking in a lot of files with the letters of support, and at one point, the inventory of applications came close to 20,000 applications.”

Apel highlighted the disparity between the number of approvals and the application volume since “the government was only doing 1,000 approvals per year. So what they’ve done is they have increased the quota from 1,000 all the way to 5,000 for this year and 6,000 for the next year. However, an onslaught of new applicants came through, and the numbers kept increasing, adding to the backlog.”

Patrick McCarthy, Director of Residency Programs at ClientReferrals, underlines the potential impact of the backlog. Application volume, he says, has “ballooned in recent years. ”The result, he remarks, is that processing times are now upwards of 37 months, which “ultimately reduces Canada’s ability to attract genuine entrepreneurs who have the genuine intention of launching innovative businesses in Canada.”

Tackling Backlogs and Unethical Behavior

McCarthy believes that “changes to the SUV were inevitable.” He says the “explosion in the number of applications has largely been due to how some people promote the program.” 

McCarthy explained that some companies promote the SUV as “a program where you pay a fixed amount, and someone else will come up with the business idea for you, write the business plan and develop the prototype for you, and even operate the business for you.” He says that companies use this framework “to make it appear like you, Mr. Foreign Entrepreneur, have an innovative business,” which isn’t always the case.

Apel told IMI that he and his partners have been consulting the government on a solution for the SUV’s problems for some time, particularly trying to address the issue where “some incubators were pumping out way too many letters of support without doing the proper vetting.”

The government “knew who those incubators were, but they could not discriminate because, in Canada, you cannot discriminate until someone is found guilty,” Apel explained, “the government had rejected many of these particular incubator files for inadequate vetting or ineligibility. However, this created another issue for the government by adding more work to the already considerable backlog.”

He and his associates consulted the government to limit the number of applications per designated organization to 30 a year. However, amidst a “change of staff at the government,” the ministry announced a cap of ten applications “so they can reduce the incoming flood of new files and they can clear out the backlog of the old ones.”

Apel says pending applicants are “lucky because they’re in the system. They will be in the queue, and the government will process them.” For new applicants, Apel says that only “the best of the best” will be able to succeed under these new guidelines because incubators, angel groups, and venture capitalists are going to be a lot more picky about who their top 10 for the year.”

McCarthy appreciates this approach, believing “by limiting the number of startups designated organizations can support, hopefully they will be incentivized to choose the best ideas to support, and not just accept anyone willing to pay their fees.”

Government Freezes Self-Employed Persons Program to Shorten Processing Times

Minister Miller also announced a full pause on application intake for the Self­-Employed Persons Program starting April 30, 2024. This program provides a pathway to permanent residence for individuals with notable experience in art, culture, recreation, or sports who will contribute to Canada’s cultural vitality. Due to the high number of applications submitted for this program, processing times have increased to beyond four years.

While the pause is in place, Immigration, Refugees and Citizenship Canada (IRCC) will continue finalizing applications from the backlog while assessing options for reforming the program and ensuring its integrity. 

By restricting application intake through the end of 2026 and through planned increases in admissions for the federal business category, as outlined in the 2024–2026 multi-year levels plan, IRCC aims to reduce the backlog and bring down wait times while continuing to welcome talented, innovative, and entrepreneurial newcomers to grow Canada’s economy.

Minister Miller emphasized the importance of fast processing for the success of entrepreneurs coming to Canada through federal business programs. He stated, “These necessary changes will set the Start­up Visa Program and Self-Employed Persons Program on the path to faster processing times while we look ahead to further reforms to make these programs more sustainable and effective over the long term.”

However, since there are about 80 designated organizations, each one capable of processing ten files and able to include five applicants per file, we could still see thousands of new SUV permanent residency applications per year.