Tajick’s Take With Stephane Tajick
A seasoned researcher on RCBI, Stephane Tajick analyzes global shifts in the investment migration industry.
As Canada and Quebec battle the COVID-19 pandemic with curfews and travel restrictions, the Quebec Immigrant Investor Program (QIIP) is getting ready for a showdown that will decide its fate.
By April, the Quebec government is expected to determine the future of the world’s longest-running residence by investment program. Against a backdrop of a pandemic-induced recession, it would be surprising to see the program terminated for good. But if certain long-standing problems within the program are not resolved, its continued existence might not be justifiable.
In 2018, the newly elected Coalition Avenir Québec (CAQ) government decided to reduce the admission quotas for the program, driving total processing time even higher than the previous 6-year average. A year later, the QIIP was suspended by the government pending review.
Because of COVID’s disruptions, that review never materialized. In the middle of the pandemic, under financial stress, the government temporarily reopened the program to help battle the economic challenges the province was facing. The program was open for application submissions during the month of April 2020. Despite the constraints of the pandemic, intermediaries were able to fill the quota. Now, the Quebec government has penciled in a deadline in March to figure out the future of the program. Whether the program will be permanently closed or experience significant changes remains an open question.
A number of existential threats face the program. Known shortcomings remain unaddressed. The continual lowering of interest rates has largely erased any financial benefits of the program to the government. In the past, the government raised the program’s minimum investment requirement to counter that drop in rates. Having raised it from CA$800,000 to CA$1.2m as recently as 2018, another price-hike would appear unlikely; if interest rates are near zero, raising the investment amount will make little difference. Moreover, a mechanism must be found to balance the financial benefits of the passive investment program and the volatility of interest rates.
Another persistent headache for the Quebec government has been the province’s inability to retain the physical presence of its investors, too many of whom are allegedly settling in Ontario and British Columbia. The low retention rate has remained a bone of contention between Quebec and other provinces, who say Quebec gets the money while they get the immigrants.
Quebec has been scratching its head for a decade now on how to improve retention, proposing regulations over the years to curb the departure to other provinces. Quebec is the only jurisdiction in the world that publishes data on the retention rate of its immigrant investors. It must be said that numerous researches have concluded that the retention data is unreliable and doesn’t render an accurate picture of the degree to which applicants move to other provinces. Nevertheless, it remains a widely-held belief among all parties involved in the program that retention is a real issue. This is believed to be directly linked to the ballooning processing time.
And this leads us to the last serious challenge the program faces: the extremely long processing time.
When the Federal Immigrant Investor Program ended a decade ago, many applicants turned to the QIIP, leading to an uncontrollable surge in applications. This was not met with a reciprocal increase in admissions, thus creating a large backlog. Since then, the Quebec government has put in place a quota mechanism assuring control of the number of applications received, helping it regain some measure of control over its backlog. It was the previous administration that implemented this strategy to gradually reduce the processing time over a period of several years. That strategy was, however, went out the window in 2018 with the election of CAQ, a novice political party. Their first order of business was to drastically reduce selection rates. For those unaware, the Quebec Immigrant Investor Program has three stages:
- File deposit: the application is deposited by the Financial Intermediary based on their share of the 1,900 quota;
- Selection: The Quebec government selects the candidates and issues a Certificat de Selection du Quebec (CSQ);
- Admission: With the CSQ in hand, the investor can now apply for permanent residence at the Federal level.
During each stage of this process, there are quotas on the number of places provided to the investors and their families. Those quotas are not always rational as the Quebec government can technically approve 1,900 files but selects only 3,000 individuals for that year under the investor category (around 1,000 families). This creates backlogs and further increases processing time.
Some investors finally landing in Quebec today might have applied as far back as in 2012. Most of these individuals expected a 2-4 year processing time, making it very difficult for them to plan a future life in Quebec. It’s also unrealistic to expect high retention rates when the Quebec government’s action purposely increases processing times.
Stephane Tajick is a researcher in the field of investment migration, the developer of the STC database on more than 200 residence and citizenship by investment programs worldwide. He is a regular columnist at Investment Migration Insider.