In the early 1990s, a phenomenon known as the “astronaut family” was commonplace in Hong Kong. The term was given to people seeking to emigrate to another country who were spending their time flying back and forth between Hong Kong and their new homeland. Oftentimes the husband stayed in Hong Kong to support his wife and children financially. But they would move abroad to hedge against the city’s uncertain future in the run-up to the handover back to China in 1997.
Canada was an especially popular destination for the astronauts. Foreign nationals could obtain residency by loaning C$800,000 (about $730,000 at current exchange rates) interest-free to any of Canada’s provinces for five years. Many families in Hong Kong took advantage of the offer: more than 110,000 people secured residency using the scheme in the decade before 1997.
But last week the Ottawa government announced that the longstanding policy – called the Immigrant Investor Programme (IIP) – has been cancelled. All pending cases have been rejected (a parallel scheme run by Quebec remains open, although it has been capped at 1,750 applicants a year, with a maximum 1,200 from any one country).
Of course, more recently the most enthusiastic applicants for residency in Canada have been mainland Chinese rather than Hong Kongers. The South China Morning Post revealed that among the 59,000 applications pending for the programme, more than 45,000 were from China. In the last full year of operation, 86% of the applicants were from China too.
Investment-linked visa schemes are common but Canada’s was one of the most permissive. Australia’s immigration visa requires an investment of $4.5 million in local businesses. The UK sets the bar at $1.7 million. The United States requires a $1 million investment leading to the creation of at least 10 new jobs.
The comparisons have prompted the Canadian rethink. Finance Minister Jim Flaherty said in his annual budget proposal that “for decades, [the investor scheme] has significantly undervalued Canadian permanent residence, providing a pathway to Canadian citizenship in exchange for a guaranteed loan that is significantly less than our peer countries require.”
Needless to say, the move quickly stirred up sentiment in China. “As a country that is ruled by democracy and governed by the rule of law, the recent action of the Canadian government shows that it cannot be trusted. Its action is very damaging to the country’s image and credit,” immigration lawyer Wang Limin complained to Southern Metropolis Daily.
“The Canadians are looking down on Chinese people,” a netizen wrote on weibo.
“This policy has been in place for so many years and only now did you think about the issues. Is it because you have collected enough money from Chinese immigrants?” another questioned.
Canadians complain that Chinese arrivals don’t contribute enough to their new country. “A significant number of people made a commitment to reside in Canada as a condition of the programme, but without actually having the intention to reside. Any programme that becomes subject to abuse and fraud on that scale had to be reformed,” reflected Chris Alexander, Canada’s immigration minister.
Indeed, Fiona Li, herself a Chinese immigrant to Vancouver, told the China Daily that there is widespread discontent among residents about ‘investor immigrants’ because of their limited involvement in local communities. “Many of us supported the policy change because we simply believe it is totally unfair if the numbers of wealthy immigrants are not controlled,” Li said.
Sonia Lesage, a spokeswoman for the Canadian immigration authority, confirmed to the Beijing Youth Daily that many of the arrivals from China were making little financial commitment beyond the initial fee. Investor immigrants were much less likely to earn salaries and were paying C$200,000 less in taxes over a 20-year period than immigrants granted residency for their technical skills, she told the newspaper.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.