Tajick’s Take With Stephane Tajick
A seasoned researcher on RCBI, Stephane Tajick analyzes global shifts in the investment migration industry.
In the last few months, bad news concerning the future of investment migration programs has been piling up. In the middle of all that negativity, there were whispers of a glimmer of hope coming from Quebec, with the possibility of the Immigrant Investor Program reopening after a few years of suspension. April 1st was the expected date. Unfortunately, no good news materialized. But many of those involved in the program remain optimistic. Below, I will detail why.
Timeline of the QIIP suspension
- In the fall of 2018, the Coalition Avenir Québec (CAQ) won the Provincial Election in Quebec and reduced quotas for the Quebec Immigrant Investor Program.
- In the fall of 2019, the program went into moratorium for review.
- On April 1st, 2021, the program was suspended until April 1st, 2023.
- On March 13th, the Ministry of Immigration decided to keep the program’s suspension until January 1st, 2024.
Why was the program suspended in the first place?
- The program was losing profitability
With interest rates dropping following the 2008 Financial Crisis, the benefit of an interest-free bond was diminishing for the Quebec government. The program was first put under moratorium prior to the Covid pandemic. As the rate continued to drop as a response to the lockdowns, the program’s current “business model” was no longer viable, and the government suspended it in 2021.
- Painfully long processing time
Processing times were reaching anywhere from five to eight years in most cases, and there were horror stories of cases taking up to 12 years to conclude. The CAQ objective to lower quotas for immigrant investors sent processing time skyrocketing and promptly brought the program to a halt.
- Low retention rate of Quebec immigrant investors
This had been getting worse over the years due to the Canadian IIP’s closing and the ballooning processing time. There was suspicion that investors were entering the Quebec program to relocate to Toronto or Vancouver, never fully settling into Quebec.
- Low “francization” of immigrant investors
The CAQ strongly defined “integrated into Quebec society” as “speaking French”. Under the CAQ microscope, an immigrant investor is considered an immigrant before they are considered an investor, and, in that context, they must “integrate into Quebec society” for that process to be deemed successful.
Where are we now?
The government created a roundtable in 2019 to address some of the issues at hand with the financial intermediaries. Since then, we’ve seen three immigration ministers and zero solutions. But discussions are inching toward the light at the end of the tunnel. Especially now, after four years of de facto suspension, the backlog at the provincial level is close to depleted.
A backlog remains at the federal level, but it still means that a revamped QIIP will not suffer from painfully long processing time. The expectation now is that the program will finally (hopefully) reopen on January 1st, 2024. Unfortunately, the government has yet to confirm the details of the revamp, but we still have a hint of what the changes might look like.
For over a decade, I’ve recommended a post-landing settlement program to complement the QIIP – a “concierge service” that would facilitate the arrival of investors and improve/accelerate their integration into Quebec’s economy. The program would aim to increase the investor’s economic output and promote francization.
But the CAQ government has always been more a proponent of the stick than the carrot, so logic dictates a handful of strict conditions to ensure immigrant investors “integrate into Quebec society”. The expectation is that the revamped QIIP will become a two-step program similar to the EB5, whereby applicants first land on a conditional basis and must fulfill certain conditions to be eligible for permanent residency.
In practice, the investor would be treated similarly to other temporary Quebec immigrants on a work permit: Spend one year in Quebec and pass a French language test to qualify for a Quebec Selection Certificate (opening the door for PR at the Federal level).
There are still question marks surrounding the investment structure. The current structure is at the mercy of the volatility of interest rates. If we stick with the existing structure, the logical solution would be a “floor rate” that, once hit, would require the investor to go out of pocket. That’s what I’ve been recommending for the last five years, so the investor compensating for the possible loss of government revenue is the likely outcome.
Will the possible changes impact the competitiveness of the program?
Yes and no.
- Yes, because the program will likely not offer any guarantee of PR. The investor (or family member) will probably need to learn a minimum of French and have spent at least one year in Quebec. The investment cost might also increase when interest rates drop.
- No, because even with the two-step process, the lack of a backlog will considerably speed up the path toward Canadian citizenship. Furthermore, temporary residence still counts towards the 1,095 days in Canada needed for citizenship (albeit at half value). To apply for citizenship, you still need either French or English language level 4 or higher. Learning basic French might help with that.
Overall, with the current climate around investment migration, the industry would welcome any new form of QIIP. Landing investors on a temporary permit should also expedite the process, and it might take only a few months before they can land in the province.
The devil will be in the details, and it all rests on how high the French language level requirement is set and how expensive the investment is. Knowing CAQ, they won’t open the floodgates to foreign investors, so don’t expect a free lunch.
Will a revamped QIIP overshadow the Start-up Visa?
The SUV is supposed to be “active” in nature, whereas the QIIP is “passive”. That said, the SUV will remain the best solution for those looking to move to Canada outside of Quebec. The QIIP will actively look to dissuade investors who are looking for a door to other provinces. This will probably be enforced by the financial intermediaries that certainly will not want the program to be suspended again. Firms trying to sell the new QIIP as a new entry to Toronto or Vancouver, beware. A word of advice: Instead of selling QIIP as a doorway to English-speaking Canada, learn to promote the benefits of Montreal and how “classy” it is to speak French and correctly pronounce “champagne” and ” Givenchy”.