P.E.I. scraps business immigration program criticized for oversight problems


Laura Stairs Head Shot

CHARLOTTETOWN — Prince Edward Island is scrapping a controversial business immigration program, which prompted federal investigations alleging hundreds of applicants never settled on the Island.

The provincial government said Wednesday it will no longer accept applications from immigrants looking to set up a business on the Island in the entrepreneur stream of the Provincial Nominee Program.

The immigration program has faced criticism for granting permanent residency status — a coveted step towards full citizenship — before businesses were set up and people actually moved to P.E.I.

Under the program, the applicants provide the Island government with a $200,000 refundable deposit and commit to invest $150,000 and manage a firm.

In an interview with, Windsor immigration lawyer Laura Stairs says the design of P.E.I.’s program essentially allowed people to buy permanent residence status without following through on the requirements of the program, and that redirecting the focus to a work permit-based program will allow the province to better fulfil its mandate.

“P.E.I. will continue an entrepreneur stream requiring individuals to operate their business in the province for a period of 12-24 months on a work permit prior to receiving the nomination for permanent residence,” says Stairs, an associate with Shibley Righton LLP.

By comparison, she says Ontario and B.C.’s entrepreneur programs require individuals to meet a number of criteria, including starting and actively managing a business on a work permit prior to receiving a nomination by the province.

“These programs also require the individual to have a high net worth, live in the province for at least 75 per cent of the time the individual is on a work permit, make a minimum personal investment in the business and demonstrate job creation,” she says.

Stairs says the hallmark of a well-designed entrepreneur immigration program is supporting the individual through the entire process — from establishing the business through to their nomination for permanent residence.

“It should start with a business plan that demonstrates the individual has done substantial research and is aware of the market in the region in which they intend to establish their company,” she says.

“The province should provide letters of support for a visitor visa so the individual may do an exploratory visit and for a work permit to establish the business, which is the case in BC. Requiring that the individual prove they intend to operate their company and live in the province by obtaining a work permit is also a key element of the entrepreneur programs that more successfully fulfil their mandate.”

Individual provinces design nomination programs to support the type of immigration they need to encourage growth and development, Stairs says.

“Alberta, Saskatchewan and Manitoba, for example, all have farm-investment categories to encourage farming in those provinces,” she says. “There are slight differences in the entrepreneur programs across Canada, but they usually include little things like the amount of investment and net worth required — they generally require the individual to start the business and actively manage it while on a work permit prior to receiving the nomination.”

A spokesman for the Office of Immigration says in 2016-17 more than half of all the 269 applicants who had ``completed their agreements'' forfeited their deposit and never opened a business, raising $18 million for the small province.

In addition, last year The Canadian Press reported on how three international students were asked by owners of businesses created under the program to return a portion of their wages to the business immigrants. In one case, a student said he was fired when he refused, and in two other cases, the students said they agreed to give back a portion of their income in cash.

Progressive Conservative Leader James Aylward said Sept. 12 the program bred public distrust and should have been cancelled years ago.

``It never passed the sniff test,'' he said in an interview.

``Our retention rate was dismal ... The government raked tens of millions of dollars from defaulted deposits.''

The province had said it was conducting a review into the program, shortly after a series of investigations by the Canada Border Services Agency became public.

The Canadian Press also recently reported on a search warrant application by the agency that alleged hundreds of people gained permanent residency in Canada by using local addresses where they didn't live, using the PNP entrepreneur stream.

An investigator alleged 462 applicants to the provincial nominee program used Charlottetown homes belonging to two Chinese immigrants over the past four years as ``addresses of convenience.''

The investigator also said she suspected the immigrants didn't come to the Island and settle, contrary to the requirements of the provincial program.

Those allegations, which have not been proven in court, came two months after two Charlottetown hoteliers were charged with aiding in immigration fraud, with the CBSA alleging 566 immigrants used the addresses of the siblings' hotel and home.

The siblings have pleaded not guilty to immigration fraud charges, and their lawyer, Lee Cohen, has said there will be discussion with prosecutors about the sworn statements provided by the two accused.

Cohen says he's suggested ``the possibility that the statements were not voluntarily given'' in the case.

Chris Palmer, the province's minister of Economic Development, said in an interview that he wasn't forced by the federal government to shut down the program, despite the high-profile investigations.

``The feds didn't intervene and tell us to do this, no,'' he said.

Rather, he said it was due to his department's disappointment with its results in retaining immigrants on the Island.

``We weren't satisfied with it as our rates of retention weren't as high as we wanted them to be,'' he said.

However, Richard Kurland, an immigration lawyer based in Vancouver, said he sees a relationship between Ottawa's probes and the shutdown of the program.

``Trials involving the P.E.I. program start soon, so no surprise to see the P.E.I. government shutting down the program before all is revealed,'' he wrote in an email.

Kurland has long argued the Island's system should mirror British Columbia's program, which approves a business project first, makes the person spend two years on a work permit to ensure business success, and then requires the applicant to live near the business at least nine months a year.

``Only after that is done and the business is successful will the province hand over a 'nomination certificate' that lets the person apply for a permanent resident visa,'' he wrote.

``P.E.I. had it backwards, handing over the 'nomination certificate' first. That's not the way to go and the ... design flaw gave rise to a lot of problems.''

``Keep the candy until the person lives up to their promises.''

The province is noting that the entrepreneur stream is only a small part of the total number of immigrants it nominates.

It will continue to have a program where it nominates immigrants for work permits, where they will only be granted permanent residency if they fulfil their commitments to set up a business.

It will also continue to nominate immigrants who fill the province's labour needs.

The number of nominations accepted under the nominee stream currently totals about 150 people, which is about 15 per cent of the roughly 1,070 provincially sponsored immigrants expected to be nominated this year.