Ottawa must 'step in' to review P.E.I. business immigration program: opposition

CHARLOTTETOWN -- P.E.I. opposition leaders are calling for Ottawa to investigate the operations of a provincial business immigration program that faces allegations of abuse and poor oversight.

James Aylward, the leader of the Progressive Conservative Party, said in an interview Friday that the province has shown an unwillingness to review or reform the program due to millions of dollars in forfeited deposits it currently receives from immigrants who don't ultimately open a business.

Immigration lawyers have criticized the ownership stream of the provincial nominee program as a side door to entering the country, with over half of last year's participants losing their $150,000 deposit to the province after they didn't open a business.

The Island Investment Development Inc., which holds the deposits for the newcomers' businesses, indicates $18 million in net revenues over the past year came from immigrant companies that defaulted on their obligation to create a business. The figure is roughly equivalent to half of the province's additional budget for infrastructure this year.

The province says 177 of the 296 nominees -- 56 per cent -- never opened a business at all, while a further 10 per cent didn't fulfil some conditions of their escrow agreement and forfeited their deposits. Of the remaining 92, so far about a third closed after their mandatory 12 months of operation.

"When you have a government that's addicted to escrow deposits and default on those deposits, I think it's going to take the federal government stepping in to turn this program around," said Aylward.

He said major changes in oversight may also be needed to ensure the program is meeting federal requirements under a federal-provincial agreement.

The agreement includes a clause that requires the province carry out "due diligence" that each applicant is "of benefit to the economic development of the province," and "has the ability and is likely to become economically established in Prince Edward Island."

"We've heard over and over again this hasn't occurred," said Aylward. "Some people haven't even opened a business. They arrive in Prince Edward Island, spend a day here and off they go. So essentially they're basically buying their permanent residency."

Three foreign students have also alleged to The Canadian Press that some participants in the program are requesting their employees give back a portion of their wages in cash, and they are calling for better oversight of the program.

Peter Bevan-Baker, the leader of the Green Party, said these allegations are "very upsetting."

He said the province's response that it is setting up a tip line and would welcome direct reports from the students isn't sufficient.

"I think it is ridiculous for (Economic Development) Minister (Heath) MacDonald to suggest that the onus is on the students to come forward and make complaints," he said in an email.

"He clearly does not appreciate how precarious the students' positions are without permanent residence status. Government must take these allegations more seriously and immediately undertake a full investigation of the program and determine how widely spread these abuses are."

The province has noted there are success stories from the nominee program, along with some business immigrants who will stay and help boost the province's population.

MacDonald has also said the program has a net economic benefit to the Island, and that the millions of dollars in deposit forfeitures are helping pay for social services that assist immigrants and other Islanders, such as hiring additional teachers.

Under Prince Edward Island's system, applicants who are nominated for the ownership stream of the provincial nominee program must invest $150,000 and have operating expenses of $75,000 over a year.

The province nominates the newcomers after it has approved the business plan, received the escrow deposits, and met with the immigrant, sending a certificate to Ottawa.

If approved federally, the applicants gain their permanent residency, unlike in some Canadian jurisdictions, where applicants apply for a temporary residency or work permit while fulfilling various portions of an agreement with the province.

Both P.E.I. opposition leaders say there is an opportunity for the provincial auditor general to delve into the program to see if it is fulfilling its mandate, and make recommendations for changes.

An audit of Manitoba's version of a similar program in 2013 found a number of shortcomings in how applicants' records were checked and the monitoring of whether immigrants were staying in the province.

Manitoba has recently announced it has dropped the deposit system, raised the minimum investment required for the Winnipeg area and now requires additional qualifications for applicants to receive a work permit.

The spokesperson for the federal minister of immigration didn't reply to a request for comment.

The federal Immigration Department sent an email saying it "works closely with provinces and territories in the design and operation of their individual provincial nominee program streams, and will continue to do so with a view to measuring performance and improving program models."