Evaluation of the Federal Business Immigration Program — 1. Introduction

1.1. Purpose of the Evaluation

This report presents the findings of the evaluation of the federal Business Immigration Program (BIP)^{Footnote 4}, including its three classes: the Entrepreneur (EN) class, the Self-employed persons (SE) class and the Investor (IN) class. The evaluation was conducted from January to December 2013, in fulfilment of requirements under Section 42.1 of the Financial Administration Act and the 2009 Treasury Board Policy on Evaluation. The evaluation examined the relevance, performance (effectiveness, design and delivery), efficiency and economy of the Business Immigration Program in accordance with the Treasury Board Policy on Evaluation Directive.

The evaluation report is organized into seven main sections:

• Section 1 presents the purpose of the evaluation and a program profile;
• Section 2 presents the methodology for the evaluation and discusses limitations;
• Section 3 presents the findings on relevance;
• Section 4 presents the findings related to management outcomes;
• Section 5 presents the findings about the program performance;
• Section 6 presents the findings on efficiency and economy; and
• Section 7 presents the conclusions and recommendations.

1.2. Program Profile

This sub-section provides an overview of the BIP, including: the program objectives; governance; beneficiaries; numbers of BIP admissions; characteristics of BIP immigrants; and, BIP costs from 2006/07 to 2011/12.

1.2.1. Program description and objectives

The BIP is one of seven federal economic immigration classes^{Footnote 5} and is included under CIC’s Strategic Objective 1: Migration of permanent and temporary residents that strengthen Canada’s economy.^{Footnote 6} It includes three classes: the Entrepreneur (EN) and Self-employed persons (SE) classes, added in 1978, and the Investor (IN) class, added in 1986.

The 2002 Immigration and Refugee Protection Act (IRPA) enables the immigration to Canada of business immigrants with the potential to invest in or start businesses in Canada, to become self-employed, or to provide a sizeable investment for provincial/territorial economic development initiatives. Section 12(2) of the IRPA states that a foreign national may be selected as a member of the economic class on the basis of their ability to become economically established in Canada, and Sections 88 to 109 of the Immigration and Refugee Protection Regulations (IRPR) set out the selection criteria for foreign nationals under the three classes of the BIP. The BIP Logic Model is presented in Appendix A.

The expected program outcomes are to select and admit BIs who would be able to economically establish themselves in Canada, to create additional job opportunities for all Canadians through business start-ups and additional provincial investment in economic development, and to share the benefits of expanded economic development activities across Canada.

The BIP consist of three classes:

• Entrepreneur (EN) Class: The objective of the EN class is to attract experienced business persons who will own and actively manage businesses in Canada that contribute to the economy and create jobs. The EN class was introduced in 1978. To be eligible to immigrate as an entrepreneur, the applicant must have business experience and a minimum personal net worth. Entrepreneurs receive conditional permanent residency and must satisfy post-arrival conditions to maintain their permanent resident (PR) status (Table 1.1). During the evaluation period (from 2007 to 2011), CIC monitored the entrepreneurs for three years after they became a PR to ensure that post-arrival Terms and Conditions (Ts&Cs) were met. CIC stopped accepting applications for the EN class on July 1, 2011.
• Self-employed persons (SE) Class: The objective of the SE class is to attract self-employed persons who have the intention and ability to create their own employment in Canada. The SE class was introduced in 1978. To be eligible for immigration as a self-employed person, an applicant must have at least two years of one of the following types of experience: self-employment or participation at a world-class level in cultural activities; self-employment or participation at a world-class level in athletics; or farm management experience (Table 1.1). They are expected to make a significant contribution to specified economic activities in Canada (that is, the cultural or athletic life of Canada, or intend to be self-employed in farm management in Canada). The SE class is not subject to conditions after arrival and is not monitored in Canada.

• Investor (IN) Class: The objective of the IN class is to attract experienced business persons and capital to Canada. The IN class was introduced in 1986 and redesigned through regulatory changes on April 1, 1999 into the current program model. To be eligible for immigration as an investor, the applicant must have business experience, a minimum personal net worth, and make a one-time investment into the Canadian economy (Table 1.1). The INs investment is paid to the Government of Canada and redistributed to participating provinces and territories for economic development.^{Footnote 7} The IRPR state that the Immigrant Investor Program (IIP) funds should use monies received for the purpose of creating or continuing employment in Canada to foster the development of a strong and viable economy. The INs investment is fully-repayable without interest after five years. There are no specific business expectations for INs post admission and they are not monitored once in Canada.

  The IN class was amended on December 1, 2010 when the required investment and personal net worth amounts were doubled, to $800,000 and $1.6 million respectively. On July 1, 2011 CIC imposed an annual cap of seven hundred new applications as a means of managing the inventory of applications in progress.^{Footnote 8} As of July 1, 2012, CIC stopped accepting applications for the federal IN class to focus on processing applications already received while the program is reviewed.

• March 2014 update: Although the period covered by the evaluation was 2007-2011, significant program changes occurred while it was being conducted. These changes were not considered as part of the data collection. The Economic Action Plan 2014 announced on February 11, 2014 the termination of the federal immigrant investor and entrepreneur programs and the elimination of their associated backlogs of applications. Entrepreneurs will still be able to apply for immigration to Canada through the Start-Up Visa pilot program. Another pilot will also be introduced to test a new approach to recruiting Immigrant Investors. Data collection was completed prior to the announcement to terminate the programs and the reporting phase for the evaluation was well under way.

BIP eligibility and selection criteria

The eligibility and selection criteria for the three classes of the BIP are defined in Sections 88 to 109 of the IRPA and are summarized in Table 1.1.

Applicants who meet eligibility criteria are assessed on and allocated points for: (i) previous business experience for entrepreneurs and investors or previous participation / experience in cultural, athletics or farm management for self-employed persons; (ii) education; (iii) official language proficiency; (iv) age; and (v) adaptability. The minimum requirement is a score of 35 out of 100 points, as established on June 28th, 2002.

The Minister of Citizenship, Immigration and Multiculturalism may amend the points required to reflect changes in government policy, the Canadian labour market, the broader economy and society in general. Adjustments may also take place in response to operational needs.

Source: CIC Program Documentation.

1.2.2. Governance

The Minister of Citizenship, Immigration and Multiculturalism has legislative and regulatory responsibility for immigration matters.^{Footnote 9} The Minister is also responsible for the approval of provincial funds under the Investor class and has the authority to suspend, lift a suspension or revoke the approval of a provincial fund in accordance with IRPR. The Deputy Minister has overall responsibility for departmental management of the BIP.

The Immigration Branch, within the Strategic and Program Policy Sector of CIC, is responsible for policy development and interpretation of the BIP. The Communications Branch is responsible for updating information about the BIP on the Department's website. The Operational Management and Coordination Branch (OMC) is responsible for field guidance and updates to operational manuals for the processing of applications. The International Region (IR) has direct operational responsibility for implementation of BIP regulations.

The selection of business immigrants is the responsibility of CIC visa officers stationed around the world. Inland CIC offices were responsible for maintaining contact with ENs and monitoring the fulfillment of conditions attached to their PR status up until 2012, when CIC decided as part of the department's Strategic Review to stop the monitoring.

Under the Canada-Quebec Accord, Quebec has the authority to select economic class immigrants applying under its programs, including Quebec business immigration programs. The federal government retains responsibility for admissibility assessment. Quebec is responsible for the selection and the provision of settlement services for immigrants settling in Quebec. In addition, Quebec manages the investment funds generated by Quebec selected INs.

1.2.3. Beneficiaries

Beneficiaries of the BIP include foreign nationals who apply for admission to Canada under the three classes, who are expected to become economically established in Canada. The provinces are expected to benefit from the use of the IIP for economic development. Canadians are expected to benefit from the economic results of increased business activity, including job creation.

1.2.4. Numbers of BIP admissions

The number of BIs admitted to Canada each year is based on the annual levels established for the BIP in the Department's Annual Report to Parliament on Immigration. Immigration targets are discussed in Section 4 of this Report.

From 2007 to 2011, 12,402 principal applicants (PAs) were admitted to Canada under the BIP, an annual average of 2,480 PAs (Table 1.2). Over this time period, 12.6% of BIs were ENs, 5.3% were SEs and 82.1% were INs.

Source: GCMS and FOSS

Although BIP admissions remained relatively constant over the years, the share of BIs admitted under each of the three classes changed over the five year period considered. The proportion of BIP immigrants in the EN class declined from 22.8% in 2007 to 7.2% in 2011. The proportion in the SE class also declined, from 7.6% in 2007 to 4.4% in 2011. Over this time period, the proportion in the IN class increased from 69.5% in 2007 to 88.5% in 2011.

1.2.5. Characteristics of BIP immigrants

Table 1.3 summarizes the socio-demographic characteristics of BIs arriving in Canada from 2007 to 2011 and their intended province of destination. Comparison of BIs with immigrants admitted under other economic classes (FSW and PNP) is also provided in Table 1.3.

Administrative data indicate that Entrepreneur immigrants tend to be married (91.5%), between 45 and 65 years of age at admission (62.9%). In addition, 34% have less than 13 years of schooling and 31.6% report not knowing English or French at time of admission. Although an important share came from a country located in the Asia, Australia and Pacific region (47.9%) as their last permanent residence, they came from a wider range of countries than investor immigrants. Also, more ENs intended to settle in Ontario (60.4%) or British Columbia (32.8%) than elsewhere in Canada.

Self-employed immigrants include a higher proportion of single persons (19.2%) and a higher share (47.3%) was in the younger age group (aged 25 to 44) than other BI classes. In addition, 21.3% have less than 13 years of schooling and 21.0% report not knowing English or French at time of admission. SEs came from a wider range of countries than other BI classes, including 30.8% having their last permanent residence in Europe (including the UK) and 14.9% in the US. They were equally intending to settle in Ontario (46.6%) and British Columbia (41.1%), although some also intended to settle in other provinces.

Investor immigrants are mostly married (94.2%) and between 45 and 65 years of age (52.6%). In addition, 29.2% have less than 13 years of schooling and 65.9% report not knowing English or French at time of admission. The majority (86.8%) had their last permanent residence in the Asia, Australia and the Pacific region. More INs intended to settle in British Columbia (64.2%) with most of the remaining INs intending to settle in Ontario (32.2%).

The profiles of the three BIP classes show some similarities and some key differences. As such, the ENs and the INs were similar in terms of marital status, age and education, but differed in terms of world region of last permanent residence and the INs were much less likely to report knowing English or French at admission. They also differed in where they intended to settle, with more ENs intending to settle in Ontario, compared with more INs intending to settle in BC.

The SE class differed considerably from the other two classes. The SEs tended to be younger and have slightly higher levels of educational attainment. In addition, a higher proportion of SEs knew English or French at time of admission. They also tended to come from a much wider range of countries, with more coming from Europe and the US, and they were more evenly distributed across Canada than the other two classes.

Note: Percentages may not total 100% due to rounding.
Source: GCMS and FOSS

In comparing the socio-demographic profile of immigrants admitted under BIP to the profile of those admitted under the Federal Skilled Worker Program (FSWP) or the PNP, key differences are noted.

• BIs tended to be older than those admitted under the FSWP and PNP, with over half (53.6%) being between 45 and 64 years of age at admission, whereas 81.9% in the FSWP and 77.3% in the PNP were between 25 to 44 years of age.
• BIs were more predominantly male (only 17.5% are females compared with 34.2% in the FSWP and 29.6% in the PNP) and came from a narrower range of world areas with 79.5% of BIP immigrants coming from the Asia, Australasia and Pacific region compared with 53.6% in the FSWP and 62.1% in the PNP coming from this region.
• BIs were also less educated with only 36.7% having completed university education compared with 83.8% in the FSWP and 51.4% in the PNP. Whereas 29.3% of BI immigrants had less than 13 years of schooling, only 5.4% of FSWP and 15.4% of PNP immigrants had less than 13 years of schooling.
• Finally, BIs were less knowledgeable of Canada's official languages with 59.2% reporting not knowing French or English at admission, compared with only 7.1% in the FSWP and 11.8% in the PNP not knowing either of Canada's official languages.

BIP immigrants who arrived in Canada between 2007 and 2011 reported having considerable business experience before coming to Canada. Based on the BIP survey data compiled for this evaluation, BIs reported having an average of 15.2 years of relevant experience prior to coming to Canada. Statistically significant differences between years of experience reported between the three classes of BIP were found. ENs averaged 17.6 years of previous business experience and INs averaged 14.4 years. SEs averaged 21.4 years of previous experience in their fields.

Many ENs and INs reported having owned multiple businesses before coming to Canada. ENs averaged 2.7 previous businesses and INs averaged 2 previous businesses. Types of previous businesses for ENs included: retail trade (27.9%), wholesales trade (25%), manufacturing (20.6%) and construction (15.1%). A third (33.3%) of ENs and a quarter (25.1%) of INs reported being still involved in at least one business abroad when the survey was conducted.

When they applied to immigrate under the BIP, many SEs (61.8%) reported intending to pursue cultural activities in Canada, most of which were related to arts, 31.1% reported intending to pursue farming activities and 7.1% athletics activities.

1.2.6. BIP costs, 2006/07 to 2011/12

Annual costs by fiscal year for the BIP are shown in Table 1.4. These figures include federal processing costs for BIP immigrants under both the federal and Quebec BIP. The financial data did not provide separate federal costs for federal BIP and the Quebec BIP cases. Federal costs related to the processing of Quebec BIP only include costs incurred for the assessment of admissibility and for visa issuance. Costs incurred by the province of Quebec leading to the issuance of a certificate of selection for applicants under the Quebec BIP are excluded as they relate to part of the processing that falls outside of CIC's responsibility. Therefore, the federal costs include the total costs for the federal BIP as well as CIC costs associated with admissibility processing and visa issuance for Quebec BIP.

n.a. = Not Available.
Source: CIC Cost Management Model

These data show that annual federal costs for the BIP ranged from $10.85M to $17.67M per fiscal year during this time period, with an annual average of $13.55M (excluding the fiscal year for which data was not available as there was no cost management exercise conducted in 2008/09). The breakdown of costs by classes from 2006/07 to 2011/2012 was 56.6% for the IN class, 39.5% for the EN class and 6.3% for the SE class. Costs for the BIP are further discussed in Section 6, in relation to cost efficiency and effectiveness.

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