Vancouver, British Columbia (PRWEB) April 01, 2014
On February 11, 2014 the Canadian Government announced the termination of the Immigrant Investor Programs (IIP) as part of the 2014 Economic Action Plan (EAP 2014). The program was loosely nicknamed the Wealthy Investor Program, says Michelle Vaughan, a Vancouver Realtor®. To qualify for the Immigrant Investor Program the applicants would be required to show that they have business experience, have a net worth of at least C$1,600,000 that was gained legally and invest C$800,000 as an interest free 5 year loan to the Canadian government. The idea was that the loans would divided between participating provinces and used as funding for projects to create jobs. In return, the applicants were fast tracked to getting permanent resident status in Canada. It was primarily used by immigrants from Hong Kong, Mainland China, and Taiwan.
“Here in Vancouver there was an immediate reaction of doom and gloom from the press and the effect this would have on our Real Estate market,” says Michelle Vaughan, a Realtor® with VPG Realty Inc. in West Vancouver. "I think it is important to remember that there are investors coming from many countries and in addition a lot of the homes bought by Chinese investors in the last few years are either vacant or rented out and not being lived in by the purchasers. This suggests that the investors are buying whether they can obtain permanent residency or not. Further, low interest rates and the Canadian dollar weakening are an incentive for all foreign purchasers to look at investing in the Real Estate market here."
The program was created in 1986, although at that time the amount of the loan was $150,000 and the borrowing time was only 3 years. By 2010 the amount had grown to $400,000. The program was highly controversial as it allowed people to essentially buy permanent residency in Canada. These investor class immigrants typically paid less in taxes than other other economic immigrants, were less likely to speak English or French, and less likely to reside in Canada.
This past week, Canada’s Immigration Minister, Chris Alexander, was in Hong Kong to announce plans to re -invent the Immigrant Investor Program. The new program, referred to as the immigration investor venture capital pilot would involve a longer term loan and double the investment in return for permanent residency. The biggest difference is that the original program offered a risk – free lending situation, the new one will involve at-risk venture capitalist investments, with a strong focus on start –up businesses. The funds will be privately managed and directed.
One of the reasons cited for scrapping the old program was the issue of people buying residency, without having to fulfill the requirements of actually living in Canada. When asked if residency and language requirements would be more stringent under the new pilot Chris Alexander said, “Probably not terribly stringent. Language is important… But we respect the fact that not everyone starts from the same point of departure and we give a lot of English second-language support to those who don’t have a very high level when they arrive.” The problem of absentee residents was never addressed.
Another issue was the backlog of immigrants on the list to apply for the IIP. According to Chris Alexander, “Our biggest challenge coming into government in 2006 was that we had enormous backlogs, approaching 1 million people in our backlogs. As of now with this recent move to eliminate [the immigrant investor programme and the federal skilled workers backlog], we will be under 400,000.”
According to Chris Alexander, China was our largest source of immigrants in 2013, approximately 34,000 people out of an overall immigration level of about 260,000. He suggested that the new program will be announced in a few months.
About About Michelle Vaughan
Realtor® Michelle Vaughan specializes in homes in the North Shore region. Referred to as the “Hollywood North”, the North Shore offers waterfront properties and the mountains in residents’ backyards; the area is an ideal setting for anyone looking to invest in a home. Having grown up in the area, Michelle Vaughan is an expert in the nuances of the North and West communities of Vancouver, benefiting buyers and sellers alike. Michelle Vaughan goes the extra mile for all her clients to ensure they not only find the best house at the best price but are able to turn that house into a home. For more information on Michelle Vaughan's Real Estate services please visit: http://www.michellevaughan.ca/.