Catherine Sas, K.C.On Monday April 29, 2024 Canada’s Minister of Immigration, Refugees and Citizenship Canada (IRCC), Marc Miller, introduced dramatic changes to Canada’s two federal business immigration programs effective the next day, April 30, 2024. These changes limit the processing of Start-Up Visa (SUV) cases to a total of 10 start-ups per designated organization per year. Further, the Self-Employed (SE) category is completely suspended until the end of 2026 with no further applications being accepted while IRCC clears out the backlog of pending applications and determines how to re-vamp the program. Immigration professionals are scrambling to understand the rationale for such drastic and immediate changes. Let’s take a closer look at Canada’s two business programs – the SUV and the SE.
The SUV program was introduced in 2013 as a pilot program (and became a permanent program in 2018) to attract innovative entrepreneurs to Canada to start up their new ventures with the support of designated venture capital firms, angel investor groups or business incubators. These entities, called “designated organizations” (DOs) provide financial and/or business support to these new start up companies to ensure their success in Canada. The concept of the DO was that these private entities would vet these proposed business ventures and support only those with the best chances of success. Uptake of the SUV process was very slow in the first three to five years and the program really didn’t gain a lot of interest until 2018 while both immigration professionals and prospective applicants learned the nuances of the program. By 2019 there was a considerable growth in volume such that the Canadian immigration information network Lexbase reported in October 2021 a backlog of 6730 cases. Fast forward to April 2024 and Lexbase referred to an internal IRCC memo dated May 25, 2023 referencing a backlog of 16,000 SUV cases! The processing target for 2023 was 4300 cases. The rate of applications is clearly out pacing IRCC’s ability to process the high volume of such applications.
Canada has had an SE category for decades which for many years was wide open to any potential individual who had the intention to establish a self employed business in Canada. With the introduction of the Immigration and Refugee Protection Act (IRPA) on June 28, 2002, the SE category became a defined class and restricted to those applicants with a demonstrated history of self employment in cultural, athletic and farming activities. From March 10, 2018, farming applications are no longer accepted as part of the SE program. As many aspects of Canada’s business program were eliminated, the remaining programs such as the SUV and SE categories saw increased demand to the point where SE processing is now taking over four years per application. Accordingly, IRCC is now shutting the door to new applications and reviewing what the program should look like in the coming years.
With SE applications on hold for over 2.5 years, and the processing of SUV applications restricted what does that mean for Canada’s business immigration program? To understand this, we need to take a look at the Minister’s Immigration Level’s plan and the targets for business immigration.
Minister Miller tabled his levels plan for 2024-2026 last fall and set targets as follows: 485,000 immigrants for 2024 and 500,000 immigrants for 2025 and 2026 across all categories. Specifically for Business Immigrants he set a target of 5,000 applications for 2024 and 6,000 applications for 2025 and 2026 – a total of 17,000 business immigrants over three years.
With a reported backlog in May of 2023 of 16,000 pending applications and having accepted applications for another year, it is not unrealistic to have a current backlog of 18,000+ SUV applications or more. This does not include the SE category for which there is no current data available as to the volume of cases other than it is currently taking 4+ years for processing. Our current supply of applications clearly surpasses the Minister’s stated targets set for 2024-2026.
How do the DO’s fit into this formula and why are they restricting the number of SUVs per DO? Currently there are 85 DOs: 26 Venture Capital firms, 7 Angel Investors and 52 business incubators. With 85 designated entities limited to 10 cases per year, that represents approximately 850 start-up ventures per year eligible for the SUV program. Oh, and each start-up can have up to 5 individual applicants per proposed business. So you can see how unlimited applications has lead to explosive growth.
Canada’s immigration programs have been struggling for decades with intake management. Our Express Entry program was introduced on January 1, 2015 for this very reason – to give IRCC the ability to restrict the number of applications that they have to process. With a current inventory of 20,000+ SUV and SE applications and a 3 year cumulative processing target of 17,000 applications, IRCC has more than enough business applications to keep them busy.
We can anticipate that the next two years will entail considerable stakeholder consultation to determine how to re-formulate a business immigration program that will work for the Canadian economy and also for IRCC’s work force capacity. For aspiring business immigrants, now more than ever, you will need to develop a strategy for pursuing a Canadian immigration dream.
For a comprehensive review of the SUV and SE application programs, please refer to our blogs:
– “Start Up Visa Processing: The Playing Field Has Changed!” – 17 October 2023; and
– “Canada’s Business Immigration Programs: The Start Up Visa and Self Employed Class” – May 12, 2020
