There have recently been important changes to the Quebec Immigrant Investor Program (QIIP). This residency-by-investment program, which is one of the oldest residency-by-investment (RBI) programs, is now more expensive, and the submission period was just extended. But is the extension of the program coupled with a risk for its future?
New QIIP conditions
South of the Canadian border in the United States, there has been numerous talks about increasing the cost of EB-5 investment, but so far it has not lead to any increases. It is not the same in Canada. After remaining at same cost since December 2010, Quebec increased the cost of the program by 50 percent in September 2018 and the net worth requirements increased by 20 percent. The main requirements now are: two years of management experience in the last five years (same as before); legal accumulation of net worth of minimum $2 million Canadian dollars (as opposed to $1.6 million previously); and, upon approval by the province of Quebec, make an investment of $1.2 million (as opposed to $800,000 previously). The vast majority of applicants would take the financing option, which has also increased by 50 percent to about $350,000. As another change, Chinese applicants no longer take as much as 70 percent of the 1,900 yearly quotas for QIIP; their cap was lowered to 65 percent, leaving more room for non-Chinese families to apply for QIIP.
QIIP is a seasonal program. It typically opens before end of the summer and closes before the end of winter, when the maximum quota of 1,900 files is reached. The program was supposed to be from Sept. 10, 2018, to March 15, 2019, at the latest. However, for several reasons, including the significant increase of the cost of the program, the lowering of the cap of Chinese applicants and geopolitical reasons, QIIP has not been filling the quotas at same pace as in previous years. Therefore, Quebec announced the extension of the QIIP submission period until Aug. 31, 2019, an extension of more than 5 months.
Potential consequences of the QIIP extension
In the short term, this extension is good, since it will allow more people to apply. This extra time will also lead to better application quality since service providers don’t need to rush to prepare applications. However, there could be a downside to this. In October 2018, Quebec province elected, for this first time in history, the Coalition Avenir Quebec. This new political party has implemented its promise for a temporary reduction of the new permanent residents in the province, in view of better integrating these new immigrants. This reduction to 40,000 new permanent immigrants (representing 20 percent to 25 percent compared to previous year) has had an impact on the QIIP. Given the recent extension of the QIIP, one should not be surprised if the program is then suspended for one year or more.
Should we be concerned about having a QIIP after August 31, 2019?
There are legitimate reasons to be concerned about the future of QIIP. Historically, the federal government of Canada and the Quebec Immigrant Investor program have been running side by side since 1986. However, when the federal program was shut down in 2014 with the passing of Bill C-31 on June 19, 2014, Quebec remained the only immigrant program in Canada leading to permanent residency by a passive investment. There has been strong bipartisan support in the Quebec province for this program in the past, as it created strong economic development for SMEs throughout the province, thanks to the subsidies generated by QIIP applicants’ passive investments. However, the Canadian federal government that cancelled its own program has been inviting Quebec to consider closing its own IIP. Considering the intention of the newly elected government in Quebec to temporarily reduce the number of new permanent residents, there is not the same level of comfort that the QIIP will again reopen in September of 2019.
Therefore, the time to apply for QIIP is now. It typically takes two to four months to prepare a QIIP application. Applications are then processed on a first-come, first-served basis, except for the few French-speaking applicants who are fast-tracked by Quebec. Typical processing times are about 12 months for non-French speaking applicants, and two to four months for French-speaking applicants. Given the uncertainty of the future of the program, it’s not recommended that people who consider applying to QIIP wait for the next round of submissions, because there is no way to be sure the program is coming back.
Advantages of QIIP versus EB-5
Many applicants interested in North America choose between the U.S. EB-5 and the Quebec Immigrant Investor Program. Both are programs that lead to permanent residency by passive investment. Both lead to G7 countries that offers lots of similarities, including strong economies, good educational opportunities and quality of life. Often, the choice can be driven by the country in which the children are studying, but there are several other factors. Leaving aside all personal factors such as quality of life, opportunities, climate and such, let’s have a look at the main selection criteria of both programs. Under EB-5, the investor’s money is injected “at-risk” and before submitting the application. If the investment does not create the jobs, the green card is at-risk and the family could be asked to leave the U.S. promptly. On the other end of the spectrum, QIIP requires the investment only after the approval of the application, and the investment is fully guaranteed by the government. The permanent residency status is given without conditions, hence there is no risk of a family being asked to leave Canada.
Both EB-5 and QIIP remain programs that share several similarities but offers different objectives. The so-called “best program” may not be the same for two different families for many reasons. Each program has its pros and cons, both would continue to attract high net worth individuals from all over the world. Let’s just hope that Canada — through the Quebec Immigrant Investor Program as the last RBI program through passive investment for the country — can remain an option in years to come.
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