WASHINGTON, D.C. — As the U.S. government wrestles with its controversial investor-visa program, Canadians are killing theirs.
Like America’s EB-5 system, Canada’s Immigrant Investor Program made thousands of foreign nationals eligible for residency in exchange for cash investments.
But the Ottawa government scrapped its program after finding it provided little economic benefit.
“For decades, it has significantly undervalued Canadian permanent residence,” the Canadian Ministry of Finance wrote in its 2014 budget report.
“There is also little evidence that immigrant investors as a class are maintaining ties to Canada or making a positive economic contribution to the country.”
All 65,000 pending applications, which the government estimates would have taken six years to process, will be returned and paid fees refunded. About 70 percent of the backlog came from Chinese applicants, CNN reported.
The Canadian program differed from its U.S. counterpart in three key ways:
- It required investors to have a minimum net worth of $1.6 million (Canadian dollars; $1.5 million U.S.). America’s EB-5 program has no net-worth standard.
- It set an $800,000 (Canadian) investment level, compared with as little as $500,000 in the U.S.
- Instead of being targeted for private companies through middlemen called “regional centers,” the Canadian cash was routed into five-year, interest-free loans to the government.
Canada’s decision to end its IIP comes amid more criticism of America’s EB-5 program.
Citing internal documents, the Washington Times reported last week the EB-5 system is “rife with fraud and corruption.”
“With hundreds of millions of dollars improperly diverted … government officials lamented a persistent lack of oversight and an inability to investigate or prosecute the perpetrators,” the Times stated.
Watchdog.org, in a series of investigative articles, reported how one company – Terry McAuliffe’s GreenTech Automotive – used high-level political connections in Washington to lobby for investor approvals at the U.S. Citizenship and Immigration Services.
McAuliffe, now governor of Virginia, said he has divested his stock holdings in the company that plans to build electric cars in Mississippi.
The U.S. Securities and Exchange Commission is investigating Gulf Coast Funds Management, GreenTech’s funding arm headed by Hillary Clinton’s brother, Anthony Rodham.
Separately, the Department of Homeland Security’s inspector general is investigating former USCIS Director Alejandro Mayorkas’ handling of EB-5. Senate Democrats, on a straight party-line vote, confirmed Mayorkas as deputy secretary of DHS in December.
Last year, 6,343 foreign nationals applied to the EB-5 program, up from just 470 in 2006, according to USCIS. The agency estimates that the program has raised more than $8.6 billion and created some 57,300 jobs.
But USCIS will not provide a breakdown of how much money or how many jobs have been generated through the privately held regional centers that collect foreign investor funds and fees.
As in Canada, critics question the economic benefits of foreign investors buying their way into the country.
Bob Dane, a spokesman for the Federation for American Immigration Reform, said the credibility of the EB-5 program is hobbled by “loosey goosey rules.”
“There’s mounting evidence that one regional center after another have not delivered the goods, or have taken the money and split town,” Dane said.
Published with permission from Watchdog.org.
Kenric Ward is a national correspondent for Watchdog.org. Contact him at [email protected] or at (571) 319-9824. @Kenricward
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