Foreign investors are using their deep pockets to achieve landed immigrant status in Manitoba, but aren't holding up their end of the bargain under the provincial nominee program for business.
The loophole, revealed in immigration statistics, has caught the eye of the provincial auditor general. Some immigrants are paying a $75,000 deposit to enter Manitoba under the business class and then not fulfilling their obligation to invest a minimum of $150,000 into a Manitoba business. They default their $75,000 deposit and still receive permanent residency status.
In 2008-09, just 22 per cent of the 276 landed immigrants under the business class invested the minimum $150,000 in a company. The situation hasn't improved. The most recent figures from 2010-11 show just 67 of 336 -- or about 20 per cent -- of approved applicants under the program invested in Manitoba.
The province says there may be a time lag with 2010-11 figures because new arrivals have two years to fulfil their investment obligations (more than a year of that time has expired).
But only one in five successful business-class immigrants has invested in Manitoba since the program began in 2000, according to an annual report published by the province's Manitoba Development Corporation (MDC).
A source told the Free Press the system is flawed because some foreigners have found a way to buy themselves landed immigrant status.
"Basically, they're paying for permanent residency," said one person involved in private immigration work, speaking on the condition of anonymity. "If a guy's sitting on a few million dollars, what's $75,000? That's pretty cheap."
The auditor general is auditing the provincial nominee program's business branch. The report is due in mid-January. Auditor General Carol Bellringer wouldn't divulge findings but said there was no single specific reason for the audit.
The province refused requests for an interview, and would only respond to questions by email. In its email responses, it twice refused to answer why it hasn't fixed a program that is apparently being used as a relatively inexpensive gateway to gain permanent residency in Canada.
The province twice responded by saying 60 per cent of applicants under the program gain permanent residency. But the province didn't answer why only one in five successful immigrants in the business class -- about 404 of 2,029 successful applicants between 2001-2011 -- invested in Manitoba.
Neither could the province answer how many of the successful business-class immigrants are staying in Manitoba once they obtain their permanent residency. There are claims within the immigration industry that many of the business people obtain their permanent status and quickly move elsewhere in Canada.
"The program needs are being met, and the Province of Manitoba does not track individual business owners after they have satisfied program requirements," the government said in an email.
Progressive Conservative immigration critic Bonnie Mitchelson said the numbers indicate the nominee program has little accountability.
"When a program is only 20 per cent successful, I think that's a pretty abysmal track record," she said. "Somebody has to take a close look at it and if it's not working should we not be making some changes?"
Mitchelson said federal changes to the immigration system announced last spring -- Manitoba will no longer get $36 million for settlement services -- perhaps were done to plug these holes.
"It might be interesting to know whether the federal government has taken a look at what's happening in Manitoba and are looking to hold the province accountable," she said.
Randy Boldt, a private immigration consultant who ran the province's business immigration program from 2000-2006, said the solution to the poor track record on investments is simple. The province only has to make it mandatory that business-class immigrants fulfil investment obligations within two years before permanent residency is granted.
Since the program began, those applicants who fulfilled obligations have invested more than $170 million. But that figure should be much higher, said Boldt, president of Visamax Immigration Consultants Ltd.
Boldt said the program was initially lax because there was a lot of competition between provinces for immigrant investment. Manitoba needed to jump-start growth.
In 2008, the federal government raised its deposit to $800,000 from $400,000. That resulted in a jump in applications for the Manitoba program. As well, several provinces have abandoned their programs. Boldt said this created an opportunity for Manitoba to insist investment obligations are met. Boldt was interviewed by the auditor general's office for four hours as part of its audit.
Manitoba's program has a backlog of 2,300 applicants. With a quota of 400 spaces, that would take four years to clear at the current 60 per cent approval rate.
-- With files from Bruce Owen