Provincial Nominee Programs (PNPs)

The owner of the Moby Dick Seafood Restaurant in the Vancouver suburb of White Rock is a Ukrainian national who immigrated to Canada through British Columbia’s provincial nominee program for business. Ironically, Mr. Yuriy Makogonsky had never even tasted the restaurant’s main dish, fish and chips, before he came to Canada in 2014. His business broker told him about the opportunity to buy the restaurant so he conducted some research before deciding to buy the business.

Makogonsky first came to Canada with his wife as tourists in 2009. They visited Toronto and Montreal and they realized that they loved Canada so decided to start their immigration process. “We thought it was really good for family to live, for kids especially,” he said.

British Columbia’s provincial nominee program for entrepreneurs selects the best candidates that will come to the province to establish or purchase and expand an existing business. Those selected receive Canadian work visas to start their business, and once all conditions are met after two years, Canadian permanent residency is granted.
 
Makogonsky invested more than CAD 1 million in the Moby Dick Seafood Restaurant, increased the existing staff by 10 full-time employees, as well as increased sales by 15%, which exceeded all program conditions. His success thus far has motivated him to consider opening a second branch in Vancouver.
 
British Columbia’s entrepreneur program has been nothing short of a success with immigrant entrepreneurs having invested more than CAD 550 million and creating 1,400 new jobs in B.C. since 2010. The federal entrepreneur program, however, stopped accepting applications in 2011, and was officially terminated in 2014. The federal government created the Start-up Visa Program in April 2013 which would grant residency only to entrepreneurs who could obtain backing and support from a venture capital fund, angel investor, or start-up incubator. Three years later, only 51 entrepreneurs came to Canada through this new program.
 
Although the number seems low, this initiative was created to bring in only entrepreneurs with good enough business ideas that would attract outside investment. Compared to the thousands of entrepreneurs who came to Canada through the former federal program, the Start-up Visa Program brought in more innovative and risk-taking individuals.
 
Many immigration lawyers and consultants, however, argue that the entrepreneurs of small-time businesses shouldn’t be ignored. The federal government needs to implement a broader strategy that would also attract immigrants looking to take over or start small businesses; otherwise, Canada misses out on the opportunity of the thousands of entrepreneurs available worldwide. Most of these thousands of individuals would never get the opportunity to pitch their ideas to a venture capital fund or another qualifying investor under the Start-up Visa Program. 
 
The main issue is whether having a high net worth and some business experience should be enough to qualify someone to immigrate to Canada. Some argue that because the entrepreneurs who came under the old federal program didn’t have language or Canadian business knowledge, they weren’t a good fit for Canada.

British Columbia and Ontario, among many other provinces, offer their own entrepreneur programs. B.C.’s Labour Minister said, “We are always looking for more skilled workers, businesses and entrepreneurs that want to support B.C.’s thriving economy.”

New Brunswick views foreign national entrepreneurs as a way to bring younger business owners to an aging population. The city of Fredericton has partnered with the Fredericton Chamber of Commerce to create an incubator for immigrant entrepreneurs, matching them with businesses that are for sale. The problem is that the federal government sometimes takes years to admit those nominated under the provincial program.

Another reason wealthy newcomers should be welcomed to Canada is that they can take over businesses from the retiring aging population. The CEO of the Canadian Federation of Independent Business explained that a quarter of business owners plan to sell their business to someone outside their families. However, there is not enough interest from Canadians. If the retiring business owners can’t find replacement owners, this could become a serious problem. A CIBC report projected that by the year 2022, half of all small and medium-sized business owners across Canada would retire.

Canada needs immigration strategies that will encourage foreign nationals to immigrate to Canada and run their own business. A report of the former federal program shows that many immigrants bought businesses just to meet the program requirements, then later sold them to other immigrant entrepreneurs. This is an area where the program lacked oversight. Canada needs to bring in immigrants who genuinely intend on staying and improving the economy by adding employment to the market; not those who just plan on buying their citizenship.

Some provincial nominee programs for entrepreneurs offered direct permanent residency in exchange for a deposit that would guarantee their settlement and business establishment in the province in question. However, wealthier immigrants were just forfeiting their deposits and writing it off as part of their immigration expense.

In addition, several years may pass between an individual’s application under the provincial nominee program and when they finally arrive in Canada. Language ability is also not taken into consideration by all of Canada’s entrepreneur programs.

British Columbia’s program is stricter in this regard. Applicants are required to sit for an interview where detailed questions about their prospective businesses are asked. Further, the province does not give entrepreneurs permanent residency right at the start. Applicants have to meet the conditions of their CAD 200,000 investment and create at least one job before they are granted permanent residency. Entrepreneurs through this program initially arrive on a work permit.

The past failure of the federal government program shouldn’t discourage the country from establishing a new and improved program. Many foreign entrepreneurs don’t qualify under Canada’s Federal Skilled Worker Program. Entrepreneur programs give these individuals a chance to come to Canada and invest in the Canadian economy.

Makogonsky, the owner of the restaurant in B.C., is one such example. He tried to apply as a skilled worker initially, but his application was refused in 2012. He has since then taken over a business, and successfully expanded it to create 10 new jobs. He recommends the entrepreneur program, although he recognizes that it doesn’t come without challenges.

“From the day you immigrate to Canada, you already have a business,” Makogonsky said. “You have a source of income. You have a future.”

Do you have a business idea, or are you interested in purchasing an existing business in Canada? Contact us today.

Learn more about Canada’s Provincial Nominee Programs for Entrepreneurs by clicking here.

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