Kim Stallknecht for The New York TimesVancouver has been a favorite destination of rich Chinese who immigrate to Canada.
Lili Feng and her husband first drew up the plan for their family’s future in March 2010. Their goal, like that of thousands of other wealthy Chinese, was to move via the investor immigration program to Canada, which they believed offered the best combination of public safety and education for their three daughters.
But after four years of waiting, the dream Ms. Feng, 40, once had of a new life for her family abroad was all but dashed in February when the Canadian government abruptly announced it was canceling its immigrant investor program along with tens of thousands of outstanding applications.
In a desperate attempt to persuade Canada to rethink its decision, Ms. Feng has joined more than 1,400 Chinese plaintiffs in a lawsuit against the Canadian immigration authorities.
Arguments in the case were presented in two federal courts, in Toronto and Vancouver, last Wednesday. Tim Leahy, the Toronto-based attorney who is representing the group, has asked for $5 million Canadian per applicant and his or her dependents in compensation, on the grounds that the Canadian immigration authorities had failed to process their applications within the promised time frame.
While the lawsuit is focused on 94 core litigants, the court’s decision is expected to apply to all 1,508 applicants who Mr. Leahy said joined the lawsuit by the time of last Wednesday’s hearings. Of these 1,508, 1,407 had filed their applications in Hong Kong and were mostly mainland Chinese, according to Mr. Leahy. Other investors represented in the lawsuit had applied from Ankara, Turkey; London; Pretoria, South Africa; and New Delhi.
The cancellation of the program was announced in a national budget proposal in February after a series of reports was published in the Hong Kong-based South China Morning Post revealing the extent to which the program had been overwhelmed with applications by rich investors from mainland China.
Because of the enormous backlog of applications, the Canadian government had stopped accepting new applications in July 2012. As of last July, there were 66,423 individuals in the immigrant investment backlog, of which 50,131 had been filed in Hong Kong, the newspaper reported, citing immigration data.
The cancellation of the program and outstanding visa applications will not take effect until June 26, when the budget is expected to be passed.
“For decades, it has significantly undervalued Canadian permanent residence,” the proposed budget says of the investor program.
There is “little evidence that immigrant investors as a class are maintaining ties to Canada or making a positive economic contribution to the country,” it continues. Furthermore, the immigrant investors tend to under-report employment and investment income and therefore pay lower taxes in the long term than other economic immigrants, it says.
Before its cancellation, Canada’s immigrant investor program was widely considered to be one of the easiest routes for investors to gain permanent residency abroad. Unlike other programs in the United States or Europe, which require large investment sums or proof of jobs created from the investment, investors seeking to immigrate to Canada were required only to make a five-year, interest-free loan to the government of $400,000 or $800,000, depending on the time of application, as well as show a net worth of $1.6 million Canadian.
The idea that millionaires are buying their residence visas “sits very badly on the Canadian mentality, so the perception is negative,” said Mr. Leahy.
China is among the three countries with the highest number of millionaire households, according to the Boston Consulting Group. And the proportion of high net worth individuals in China looking to settle abroad reached a record 64 percent this year, up from 60 percent last year, according to a joint report released last week by the Hurun Report, which tracks high net worth individuals in China, defined as those with family wealth of at least 6 million renminbi (about $1 million), and the immigration agency Visas Consulting Group. The main reasons cited by wealthy Chinese for emigrating, according to the survey, were concerns about quality of education, environmental pollution and food safety.
The Canadian government has said it will announce new plans for a “more focused and effective” pilot program for immigrant investors in the coming months.
“Canada has a proud tradition of welcoming immigrants from all over the world, including China,” Bill Brown, a spokesman for the immigration department, said in an emailed statement.
China “has been among the top source countries for Canadian immigration for more than a decade,” Mr. Brown added, and it would “continue to rank as such.”
At the time the program was canceled, the investors represented in the lawsuit were in various stages of the application review process. For Ms. Feng, who applied with her family in 2010, moving to Canada was “our dream for years.”
With high hopes, Ms. Feng placed her oldest two daughters in an international school in Shenzhen and began making preparations to transfer the management of their elevator sales company, which Ms. Feng runs with her husband. They hoped to move to Toronto for its schools, she said. The entire process, they were told, would take no more than two to three years.
“It’s been four years now, and we are very disappointed,” Ms. Feng said. “But we haven’t activated any backup plan yet. We are still hoping the Canadian government will solve this problem fairly and impartially.”
Ms. Feng said that she and her husband had initially considered applying to the United States, like many of their friends, but had ruled the country out because they thought it wasn’t safe.
“Now look at us,” she said, speaking by phone from Shenzhen. “Our friends are there, and we’re still here.”
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