The Canadian government recently cancelled the Immigrant Investors Program (IIP), a popular program designed to lure Chinese investors into Canada. With the scrapping of IIP, the B.C. government stands to lose access to a $400 million fund. Vancouver Sun provides more information on the program’s abolishment, which was announced on February 12 this year.
“The B.C. government will lose a $400-million loan fund, used to help replace schools and expand hospitals, as a result of Ottawa’s decision to scrap the immigrant investor program.
Under the program, investor immigrants with a net worth of at least $1.6 million lend Canada $800,000 for five years in exchange for permanent residence. The province gets to use the money for five years and it is then returned, interest-free, to the immigrant.
In B.C., that money goes into the provincially owned B.C. Immigrant Investment Fund. As of January 2013, the fund was managing $403 million, according to the 2013-14 service plan.
B.C.’s international trade minister, Teresa Wat, could not say Thursday what the loss of the money will mean for the B.C. government, whether Victoria will have to cut back on infrastructure loans, and what other sources of funding might be available to fill the gap.”
Undoubtedly, this development will have an impact on Victoria BC real estate prices, although how much of an impact it will make remains to be seen. The government expects the impact to be minimal, since it claims that most immigrants under the program, after all, were not major contributors to the economy in relation to the taxes they pay. To replace the IIP, the government instead offered two new programs which are scheduled to be launched later this year.
Fortunately, Canada’s current real estate environment is adaptable, and the government predicts that the termination of the program would just be a bump in the market. Canada’s federal housing agency forecasts that home sales and construction will hold steady. Meanwhile, the Canada Mortgage and Housing Corp. expects construction to tone down to more sustainable levels, even as sales and prices will slowly rise in 2015 as construction picks up. With a positive appraisal of a sustainable real estate market—and two replacement programs in place—IIP’s suspension does look like it wouldn’t be much of a loss to the overall B.C. economy, after all.
If you are planning to make a real estate investment in Victoria BC, you can visit the properties on the listings site. From the houses, townhouses, luxury real estate properties, and condos for sale in Victoria BC, you’re likely to find just the right place that suits you best.
(Source: B.C. loses access to $400-million fund as investor immigrant program scrapped, Vancouver Sun, Feb. 13, 2014)