As Canada’s population continues to age, immigration will play an increasingly important role in the creation of new businesses but it won’t be the only solution.
A recent study released by the Fraser Institute suggests that the demographic shift towards an older population is already dragging down the number of new businesses starting in Canada.
According to Jason Clemens, executive vice-president of the Fraser Institute and co-author of the report, “There’s an inevitable headwind against entrepreneurship, which is this demographic change.”
The report, based on data from Statistics Canada, found that in 2004 there were 17.9 new firms for every 100 existing businesses. By 2012, that number had dropped to 15. This decline correlates with a 15 percent increase in the proportion of Canadians over age 65.
According to Statscan, in 2009 there were 120 children for every 100 seniors in Canada. The federal statistics agency forecasts that those numbers will become equal sometime between this year and 2021.
The demographic shift, which is trending to as few as 58 children for every 100 seniors by 2036, will have a major impact on the Canadian economy.
While the decline in the number of new businesses will mean less job creation in the short-term, Mr. Clemens says that if nothing is done about the demographic shift, Canada’s future could be at risk. He warns that with a shrinking proportion of the population paying taxes, provinces will struggle to cover growing healthcare costs while also continuing to fund other services.
According to Michael Bloom, vice-president of Industry and Business Strategy at the Conference Board of Canada, Immigration will also play an increasingly prominent role.
“In order for us to be able to project economic growth at a desirable level, in the long-term, we must raise immigration to one percent annual inflow by 2025 to 2030,” Mr. Bloom says.
Canada currently accepts around 250,000 immigrants a year, an annual inflow of around 0.7 per cent of the population.
Immigration is not only important to maintaining economic growth, it’s also important to maintaining entrepreneurship rates.
Immigrants are 1.6 times more likely to start businesses than native-born Canadians according to a report released by the Business Development Bank of Canada in the fall.
Federal programs that were intended to encourage entrepreneurs and investors to immigrate to Canada stopped accepting applications in 2012 and were scrapped in June 2014. The federal government said the programs were ineffective at bringing new money into Canada and creating new businesses.
A new startup visa program, launched as a pilot project and intended to lure high-tech entrepreneurs to Canada, has only issued a handful of visas in two years.
Canada needs to dramatically increase the number of young immigrants it accepts, he says, and even if it is mathematically possible, there would be practical challenges.
For Mr. Clemens, other policies need to change to encourage entrepreneurship and investment by both new and native-born Canadians. One policy change he’d like to see is the scrapping of the capital gains tax.
“It’s low cost,” he says. “The federal government doesn’t collect all that much revenue from the capital gains tax.”
Attorney Colin Singer Commentary
The Conservative government has a stated distaste for business immigrants. Despite having a dubious history in this area, it recently launched an unsuccessful venture capital investor pilot project. The Citizenship and Immigration Ministry under former Minister Jason Kenney allowed more than 15,000 wealthy investor applications to languish in an unmanaged backlog, some dating back to 2008, before extinguishing their applications in 2014. The record is clear that the current government has adopted a series of policies that have significantly reduced the flow of business immigration to Canada.
Nova Scotia has to create more jobs before it attracts immigrants, according to Kenneth Rowe, the head of one of the province’s largest and most successful businesses.
Addressing an audience of business leaders and politicians, Mr. Rowe said ”It’s all right bringing immigrants in, but you should get the jobs first. You know, what comes first — the chicken or the egg? In this case we should have jobs for them, otherwise they become a liability.”
Rowe, the England-born executive chairman of IMP Group International Inc., was the keynote speaker at a fundraising breakfast at Pier 21.
Nova Scotia’s workforce needs immigrants, Rowe said, but it’s not all that’s needed.
“We have an ageing and decreasing population so we need a continuing influx of suitable, taxpaying immigrants. But let me give a word of caution as I believe they should only be part of the solution,” he said. “Training our own young Canadians, including immigrants, in skill sets that match job openings available to them in our local industries keeps more of them in Nova Scotia.”
Referring to the Ivany report, an economic development report that recommended tripling the number of people that settle in Nova Scotia annually, Rowe said “Immigration is a very important part of the workforce solution as is stated in the Ivany report. But for large employers, such as IMP, we have to be very careful how we hire them.”
Recalling his own experience, Rowe said that when his company was facing a worker shortage, he approached English-speaking, British-trained apprentices, making 171 employment offers. The company accepted 94 applicants, but only 67 relocated. This was because many people either couldn’t sell their homes in order relocate, couldn’t overcome all the immigration paperwork or didn’t move because of family ties. To top it off, some of the people who did relocate left soon after due to homesickness or loneliness.
Rowe says that as a result, IMP now concentrates on training people in Nova Scotia.
Lena Diab, Nova Scotia’s minister of immigration, agreed that economic growth is critical to the province’s future.
“We feel enhanced immigration is a crucial component in the future success of Nova Scotia and will help us grow the economy,” she said. “Mr. Rowe spoke to the importance of our business community playing a fundamental role in creating the growth that will keep Nova Scotians at home and attract people from around the world to our province.”
Robyn Webb, of the Greater Halifax Partnership, which helps immigrants and international students connect with job opportunities, agrees with Rowe that the province needs jobs for newcomers, but adds there are lots of opportunities in the hidden job market that immigrants might not be aware of.
“Eighty per cent of the jobs are going unadvertised. It’s quite often who you know to even find out about those jobs,” she said.
“There are opportunities for immigrants searching in Halifax and we just need to make those connections for them in the hidden job market.”
During his speech, Rowe also urged the local government to address the problems with public finances. “Apart from stimulating immigration and new jobs, we have a major financial structural problem we must face with some degree of urgency, which is our growing provincial debt of $15 billion,” he said.
Rowe said the interest payments on public debt would be better spent on health care, education and job creation.
“I think it’s time for the three political parties to give their political agendas a rest for awhile and all work together with the private sector to get our economy afloat and growing again.”
Austria Citizenship Investor Programme
Many countries have provisions that allow the acquisition of citizenship based on an investment and/or a direct contribution to the country’s development. The Article 10 (6) of the Austrian Citizenship Act states that the government can provide citizenship to foreign persons in case of extraordinary merit. This can be in various forms, including investment or any other form of economic benefit being brought to Austria. However, investment is not enough to be granted citizenship of Austria. The investor must also make some type of an extraordinary contribution to Austria besides investment, such as by introducing new technologies to the country or creating employment opportunities for local citizens.
Requirements for Austria Citizenship Investor Programme
Austria’s citizenship-by-investment provisions require an applicant to actively invest in the Austrian economy in the form of a joint venture or direct investment in a business which creates new jobs or produces more export sales. The direct investment should be significant and passive investments in real estate, government bonds, etc. do not qualify.
The citizenship criteria requires the standard documentation – passports, birth and marriage certificates, etc. in addition to a completely clean personal record substantiated by certificate of no criminal record, business background information, a comprehensive curriculum vitae, and impeccable references.
Generally, the applicant will be required to abandon his current citizenship as a precondition for being given the Austrian citizenship. However, if citizenship has been granted to someone under the provisions of Article 10 (6) of the Citizenship Act, then the person can legally maintain his/her former citizenship.
Procedure and Processing Time
The application process for Austrian citizenship requires government approval at many levels. It is therefore important that each application is carefully prepared and informal approvals are obtained beforehand from the key ministries before the applicant makes the investment and formally starts the application process.
Law firm Henley & Partners advises interested applicants on suitable investment opportunities, liaises with the various government ministries and agencies, and also helps prepare their formal application. The procedure would require a complete background check of the applicant and a personal interview in Austria.
On an average, it takes about 12-18 months to process a citizenship application in Austria. The final decision is made by the government of Austria. Successful applicants are granted full citizenship of the Republic of Austria and can apply for a passport immediately afterwards. Passports are usually issued within a few days of application.
Such grants of citizenship are never published or reported to other countries, as they falls under the Austrian’s government’ provisions relating to privacy/official secrets.
Benefits of Austrian Citizenship
An Austrian citizenship allows you to live and work anywhere in the European Union at any time. It also allows you to reside in Switzerland, which is very popular for its tax-advantaged residence.
Once you are granted Austrian citizenship, you are not subject to tax in the country unless you reside there. The Austrian passport has an excellent reputation and it allows you to do visa-free travel in Europe and also to the USA.
An Austrian citizenship also allows your family to enjoy full citizenship for life, which can be passed on to future generations by descent.
Japan fell behind European nations in a ranking of the best places to do business compiled by Bloomberg, underscoring the need for Prime Minister Shinzo Abe to take bolder steps to reduce regulation and attract companies.
As Abe heads to Davos to explain his government’s economic and diplomatic policies to investors and world leaders, Japan dropped nine spots to 12th position, in an index based on six criteria including the cost of setting up a business and readiness of the local consumer base. That left it behind countries including Germany, the U.K., the Netherlands, Spain, Sweden and France. Hong Kong maintained its top ranking.
Abe has vowed to make Japan the easiest place in the world to do business as part of the economic strategy he has promoted since taking office in December 2012. He has yet to introduce legislation such as corporate-tax cuts that companies have advocated to boost Japan’s competitiveness.
Bloomberg Rankings measured nations on a scale of zero to 100 based on six factors including the costs of labour and material, and hiring and moving goods; the degree of economic integration; and less tangible costs such as inflation and corruption.
While Japan scored 75.6, the same as last year when it achieved third place, it performed worse in ratings on the cost of setting up a business, prices of labor and material and the readiness of the local consumer base. Energy costs for Japan have surged as the yen’s drop of more than 14 percent against the dollar in the past year makes imported petroleum and gas more costly.
Japan is depending more on fossil-fuel imports because of nuclear-plant shutdowns after the Fukushima disaster in March 2011. Consumer spending in Asia’s second-largest economy may also slow with a sales tax increase in April.
Germany tied with Australia for fifth place, while France was 11th. The euro area emerged from a record-long recession in the second quarter of 2013 and European Central Bank President Mario Draghi said last month there are “encouraging signs” that the region’s crisis is easing.
“The business environment clearly improved, partly because the fears of the euro falling apart began to fade,” said Stephen King, chief global economist at HSBC Holdings Plc. “Japan has obvious constraints with the demographic story — you can print money, you can’t print workers.”
Canada overtook the U.S. to claim second place as corporate tax cuts in recent years and a weaker Canadian dollar against the greenback in 2013 made it more attractive.
In China, where a labour force decline is robbing President Xi Jinping of an engine of three decades of growth, the score for the readiness of the local consumer base fell. The category includes the size of the middle class and household consumption. China slipped four places to rank 28, while the other BRIC economies of Brazil, Russia and India improved on their standings and made it to the top 50.
South Korea topped a separate Bloomberg ranking of the most innovative countries in the world. The government will establish “creative economy centers” this year to provide assistance to small- and medium-sized companies and help people with fresh ideas get financial aid without collateral, President Park Geun Hye said in an interview earlier this year.
Mid-range net worth individuals with suitable entrepreneurial experience may be eligible to apply under the one of many Provincial Entrepreneur programs. Currently, entrepreneur programs are administered by individual provinces and follow a two-step process to permanent residence. Applicants are first selected or nominated by a province if they meet program requirements. Based on that selection or nomination, they may then apply to Citizenship and Immigration Canada for permanent residence.
There are a number of provinces which manage their own business immigration programs which require active participation in the management of a business based on a specified investment and job creation. The programs vary in the requirements to qualify but generally refer to a minimum net worth in the area of $350,000 with relevant management experience. Some of the programs require a good will deposit which is refundable once the business has been established. Under provincial nominee programs, applicants first apply to be nominated by a province, and on the basis of that nomination may obtain permanent residence following Federal health and criminality checks.
|New Brunswick||Prince Edward Island|
British Columbia’s Provincial Nominee Program has three streams aimed at entrepreneurs with distinct requirements. Net worth requirements range from $400,000 to $800,000 CAD and investment requirements from $200,000 to $500,000 CAD. Unlike other entrepreneur immigration programs, British Columbia first supports applicants in the issuance of a Work Permit. The province will only nominate an applicant for permanent residence once they have successfully established and operated the intended business while in Canada as a work permit holder. Read more >>
- Expression of interest
- Invitation to submit application
The expression of interest must meet the following minimum entry requirements:
- Minimum net worth of $500,000 legally acquired.
- Minimum of three years of entrepreneurial or relevant management experience.
- Investment of at least $300,000 in Regina or Saskatoon, or $200,000 is any other Saskatchewan area.
Candidates enter a pool where they receive a score. The top scoring candidates are invited to submit an application.
Applications must include:
- Business Establishment Plan confirming figures in expression of interest, and including at least one third ownership of a company in Saskatchewan, unless investment is $1 million or higher.
- Commitment to be active in day-to-day management of business.
- Creation of two or more jobs for Canadian citizens or permanent residents if the business is located in Regina or Saskatoon. Read more >>
The Manitoba Provincial Nominee Program for Business nominates applicants who have a minimum net worth of $350,000 CAD, three years of business ownership and management experience or senior managerial experience and who score a sufficient number of points according to an adaptability matrix which takes into account such factors as age, business experience, financial resources, language abilities, and ties to the province of Manitoba. Successful applicants must make an investment into a Manitoba business of at least $150,000 CAD and provide active management. Applicants must first make an “Expression of Interest” submission to the province wherein they provide their profile without supporting documentation. The top “Expression of Interest” profiles will be invited to make a full application to the business program. Successful applicants will be required to make a $100,000 CAD deposit with the province upon nomination, which is returned if they meet certain conditions, which include making the required investment into the province and demonstrating active management of the business. Read more >>
The government of Ontario has authority to nominate certain applicants for Canadian permanent residence under the Ontario Immigrant Nominee Program (OINP). Individuals with a nomination certificate issued by the province may apply for Canadian permanent residence.
Ontario Business Immigration program has two immigration programs directed to applicants with a successful business background. The programs are (click to read more):
The primary requirements are:
- Legally-acquired personal net worth of at least $600,000, of which $300,000 must be available in available in unencumbered liquidity.
- Invest at least $250,000 in a New Brunswick business, taking ownership of at least 33 per cent.
- Show business experience – either three years of ownership or five years of senior management experience in the last five years.
- Be aged between 22 and 55.
- Minimum two years post-secondary education degree or diploma.
- Score at least level 5 on the Canadian Language Benchmark exam for speaking, listening, reading and writing in English or French.
The Prince Edward Island Provincial Nominee Program for Business requires that applicants demonstrate a legitimately acquired personal net worth of at least $600,000 CAD, have relevant business experience, and make an active investment into a local business of at least $150,000 CAD. Age, language and educational requirements are also applicable. Successful candidates will be required to make a deposit with the province of $200,000 CAD upon nomination which will be returned in installments as various conditions are met. Read more >>
The North West Territories’ Entrepreneur Program requires applicants to demonstrate a minimum personal net worth of $250,000 CAD, have relevant managerial experience, and make an active investment of at least $150,000 CAD into a local business. As in other entrepreneur programs, a refundable good faith deposit of $75,000 CAD is required from successful applicants. Read more >>
Yukon’s Business Nominee program first nominates successful applicants for a two year work permit. During the validity period of the work permit, applicants are required to establish their intended business in the Yukon. Only then are they nominated for permanent residence. Successfully applicants must demonstrate a legally acquired personal net worth of $250,000 CAD, have relevant business management experience, and make an active investment of at least $150,000 into a local business. Applicants are also evaluated based on factors such as age, language abilities, education, and prior visits to the Yukon. Read more >>
Interested readers are invited to complete our Free Assessment to determine whether they qualify for immigration to Canada as an Investor or Entrepreneur.
A Quebec entrepreneur is defined as a foreign national with at least two years (within the five years preceding the submission of the application) of management and ownership experience in a lawful and profitable agricultural, industrial or commercial enterprise who creates, acquires or participates in the active management of a lawful and profitable agricultural, industrial or commercial enterprise that will immediately employ at least one full-time resident of Quebec (30 hours per week), other than the foreign national and his accompanying dependants (R21 (b)). The entrepreneur must control at least 25% of the shares of the new enterprise which must have a value of at least $100,000 CAD.
To qualify, an applicant must possess a personal net worth of at least $300,000 CAD acquired legally, and have sufficient settlement funding to cover the cost of the applicant’s first three months of living expenses in Quebec.
There are two important distinctions from the Investors Class. First, Entrepreneur Class applicant must establish and become active in the management of a qualifying Canadian business in Quebec. Approved applicants are therefore admitted to Canada under a conditional visa and must report regularly to immigration authorities. Applicants who do not fulfill their qualifying Canadian business conditions may be subjected to removal hearings which could lead to deportation of the applicant and family members. Second, applicants without qualifying business ownership experience cannot qualify. Senior managerial experience without ownership is ineligible.
Quebec Entrepreneur applicants must successfully defend a business plan during a selection interview which presented in general terms, outlines the feasibility and relevancy of the project to Quebec. The selection interview is typically preceded by a preliminary market visit to the province of Quebec by the applicant.
Once approved, the application proceeds to Federal security and medical verifications followed by visa issuance with mandatory terms and conditions, within an overall processing delay which can vary between 18-30 months.
In summary, to qualify, a successful Quebec Entrepreneur Class applicant will:
- Demonstrate a legally acquired personal net worth of at least $300,000 CAD;
- Demonstrate significant ownership and day to day senior management of a successful business for 2 years in the previous 5 years;
- Commit to investing a minimum of $100,000 CAD into establishing, purchasing or expanding a business or entering into a successful partnership, in which they will retain at least 25% ownership interest;
- Commit to creating at least one full time job for a Canadian citizen or permanent resident in Quebec;
Applicants are also evaluated according to various selection factors and must obtain a minimum number of points against a selection matrix based notably on their education, work experience, age, language proficiency, business plan, and ties to Quebec.
Every year, the government accepts a limited number of applications under the Entrepreneur category. (2014: 500 applications, including those under the Self-Employed category)
Complete our Free Assessment to determine whether you qualify for immigration to Canada as a Quebec Entrepreneur.
The recent announcement by US based Burger King to acquire Tim Horton’s and move its head offices to Canada, highlights the favourable tax policies in Canada.
According to a recent KPMG study, Canada is one of the most business-friendly countries in the world. KPMG examined the total tax costs of doing business in ten major economies including Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom, and the United States. Using the U.S. tax rate as a benchmark, the report found that Canada has the lowest overall tax costs, around 46.4% lower than those in the U.S.
The KPMG report weighed corporate income taxes, property taxes, capital taxes, sales taxes, miscellaneous and local business taxes in each country and found that the corporate tax rate in Canada is 13.5% lower than in the U.S. According to Burger King’s most recent 10-K, in 2013 the company’s effective tax rate was 27.5%, not much higher than the Canadian corporate tax rate of 26.5%. Burger King is run by a 33-year old alum of 3G Capital, a private equity firm which bought out Burger King in 2010 and took it public in 2012.
Source: Business Insider
Over the last eight years, the surge in Chinese immigrants to Prince Edward Island (PEI) has brought about a transformation in the Island’s economy.
From the start of 2006, thousands of new immigrants began arriving at Prince Edward Island. A significant number of them hailed from China. Most of these immigrants came as immigrant investors through the provincial nominee program, which required these immigrants to invest in a business on the Island. Over the past eight years, many of these immigrants have settled themselves in Prince Edward Island and have started their own business ventures too.
When she left China in 2010 with her husband, Vicki Li had not even heard of bagels. In China, they had been running a successful steel supply business; that too, in a province that had one of the highest unemployment rates in the country. Today, although she is not a Canadian citizen yet, she is the owner and operator of the Great Canadian Bagel in Charlottetown. She liked living in the PEI and so she bought the business to support the family.
In China, John Li worked for one of China’s largest food corporations for 20 years. He was in a senior role in the company’s management in 2011, when he quit his job and immigrated to PEI. Upon arriving in PEI, Li launched Golden Bridge Marketing and Consulting. In conjunction with his three employees, he helps the PEI government and the Island food producers establish connections with the markets in China, which represent a potentially huge market for Canada’s very high quality foodstuff.
Gavian Fang came to PEI from China as a student in 2009 and attended the University of Prince Edward Island. She graduated in May 2012 before moving to Toronto with her husband, where she worked in a bubble teashop. Six months later, they returned to PEI, where she started her own bubble teashop – Charlotte Tea in the Confederation Court Mall in January 2013.
Jason Lee is the program coordinator for PEI Connectors, which works to connect newcomers to Prince Edward Island to the existing business community. He said, “These are people coming from a different country with different cultures, different business styles, in many cases there’s a significant language barrier. They were getting here on P.E.I. and they were looking for some help”. PEI Connectors has helped over more than 260 clients, thus far. All of these 260 clients – barring a dozen, are from China.
Source: CBC News
Immigration authorities in the Province of Quebec announced they will now accept new applications under its highly successful Quebec Immigrant Investor Program for a limited period from August 31st 2015 until January 29th 2016.
This comes as welcome news for high net worth individuals looking for an attractive passive investment scheme offering Canadian permanent residence. With the recent closure of the Federal Immigrant Investor program, the Quebec program is the only program of its kind in Canada.
Under the new subscription period, Quebec will accept a maximum of 1750 applications during the subscription period including a maximum of 1200 from China, Hong Kong and Macao. Interested applicants are accordingly encouraged to act early to increase their chances of having their application selected for processing.
The application quotas and the limited period of reception do not apply to applicants to the investor category who can demonstrate an intermediate to advanced level of French language proficiency through an approved standardized language test. Applicants who can meet this requirement may submit an application anytime during the period beginning April 1, 2015 through March 31, 2016.
To be eligible, applicants must demonstrate the following:
- A legitimately acquired personal net worth of at least 1.6 million Canadian Dollars;
- At least two years of senior managerial experience within the past five years in a private enterprise, eligible partnership, government body or NGO;
- Commit to making an interest free investment of CAD $800,000.00 in a prescribed (government guaranteed) investment for a period of five years;
- An intention to settle in the province of Quebec;
- A application processing fee of C$15,000.
The application process proceeds under one-step with a tempered list of documentation from previously. Applications must be fully documented at the time of submission. Quebec policy now provides for the refusal of applications that are incomplete or otherwise inconsistent with the requirements, without requests for outstanding documentation or incomplete information.
Applications are submitted through government approved financial intermediaries who act as facilitators and are each given pre-determined allocations within the overall maximum of 1750 applications. Applicants who wish to secure a spot with a financial intermediary – facilitator may do so with a suitable deposit.
Interested readers are invited to complete our Free Online Evaluation to determine whether they qualify for immigration to Canada as an Immigrant Investor. Our immigration professionals will provide evaluation results within two business days.
The Canadian Government terminated an immigration program that granted visas to wealthy investors because it claimed that the program “devalued” the right to live in the Great White North.
Under the Immigrant Investor Program, the Government would grant permanent residency to immigrants who loaned Ottawa 800,000 Canadian dollars (US$728,531), on an interest-free basis for five years.
Immigrants needed to pay five million Australian dollars (US$4.5 million) in local businesses, $1 million for creating at least 10 new jobs and one million pounds (US$1.7 million) for immigrating to Australia, the U.S. and Britain respectively.
Thus, Canada’s visa scheme was exceedingly popular, especially as immigrants only needed to loan a lesser amount to Ottawa for a 5-year period. In fact, its popularity remained undiminished even after 2010, when the Government doubled the required investment amount.
As of 2012, Ottawa had about 65,000 pending applications, with almost 70 percent coming from China. In 2012, Ottawa only managed to approve 2,615 applications before freezing the program to avoid accumulating a larger backlog.
While the amount stipulated by the visa scheme was considerably lower than the amount demanded by other countries, some Canadians also feel that foreign immigrants contribute little beyond the required C$800,000, while they reap the benefits of becoming “Canadians of convenience”. They feel that many immigrants obtain Canadian citizenship as an insurance in the event that their homelands become unlivable.
In the 1980s and 1990s, people worried about the imminent handing over of Hong Kong to China in 1997, obtained citizenship in Canada. Once conditions stabilised, some of these people preferred to return to Hong Kong. Others stayed behind in Canada, opened businesses, contributed to the welfare of the country and embraced Canadian values.
While the Government is preparing to design a new program i.e. the pilot Immigrant Investor Venture Capital Fund that requires prospective immigrants to invest significantly in the Canadian economy, thus far, it seems as if Canada will be the biggest loser in the bargain. Wealthy Chinese immigrants, among whom this visa program was very popular, would now prefer to take their skills, initiative and resources to another country.
Source: The Wall Street Journal