Regulations Amending the Immigration and Refugee Protection Regulations (Start-up Business Class): SOR/2018-72

Canada Gazette, Part II, Volume 152, Number 9

Registration

April 11, 2018

IMMIGRATION AND REFUGEE PROTECTION ACT

P.C. 2018-427 April 10, 2018

Whereas, pursuant to subsection 5(2)footnotea of the Immigration and Refugee Protection Act footnoteb, the Minister of Citizenship and Immigration has caused a copy of the proposed Regulations Amending the Immigration and Refugee Protection Regulations (Start-up Business Class), substantially in the annexed form, to be laid before each House of Parliament;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Citizenship and Immigration, pursuant to subsections 5(1) and 14(2)footnotec, section 32footnoted and subsection 89(1) of the Immigration and Refugee Protection Act footnoteb, makes the annexed Regulations Amending the Immigration and Refugee Protection Regulations (Start-up Business Class).

Regulations Amending the Immigration and Refugee Protection Regulations (Start-up Business Class)

Amendments

1 Paragraph 70(2)(b) of the Immigration and Refugee Protection Regulations footnote1 is replaced by the following:

2 Section 89 of the Regulations is replaced by the following:

General

Artificial transactions

89 For the purposes of this Division, an applicant in the self-employed persons class or an applicant in the start-up business class is not considered to have met the applicable requirements of this Division if the fulfillment of those requirements is based on one or more transactions that were entered into primarily for the purpose of acquiring a status or privilege under the Act rather than

Permanent resident status

89.1 A foreign national who is an accompanying family member of a person who makes an application as a member of the Quebec investor class, the Quebec entrepreneur class, the start-up business class, the self-employed persons class or the Quebec self-employed persons class shall become a permanent resident if, following an examination, it is established that

3 The Regulations are amended by adding the following after section 98:

Start-up Business Class

Class

98.01 (1) For the purposes of subsection 12(2) of the Act, the start-up business class is prescribed as a class of persons who may become permanent residents on the basis of their ability to become economically established in Canada, who meet the requirements of subsection (2) and who intend to reside in a province other than Quebec.

Member of class

(2) A foreign national is a member of the start-up business class if

Size

(3) No more than five applicants are to be considered members of the start-up business class in respect of the same business.

Agreements with organizations

98.02 (1) The Minister may enter into an agreement with an organization to provide for any matter related to the start-up business class, including

Requirements

(2) In order to exercise the functions referred to in paragraphs (1)(a), (b), (d) and (e), the organization must have expertise in relation to the type of entity in question, namely,

Conditions

(3) An organization may exercise the functions referred to in subsection (1) only when the following conditions apply:

Designation

98.03 (1) The Minister must designate the entities referred to in subsection 98.01(2) according to the following categories:

Requirements

(2) The Minister may only designate an entity if

Conditions

(3) A designated entity must respect the following conditions:

Suspension

(4) If there is reason to suspect that an entity does not meet the conditions or has submitted false, misleading or inaccurate information to the Minister, the Minister may

Duration

(5) An action taken under subsection (4) comes into force on the day on which the Minister issues a notice of the action to the entity and remains in effect until the earlier of the day on which the situation is resolved and the day that is nine months after the day on which the notice is issued.

Revocation

(6) If there are reasonable grounds to believe that an entity does not meet the conditions set out in subsection (3) or has submitted false, misleading or inaccurate information to the Minister, the Minister may revoke the entity’s designation.

Public notice

(7) The Minister must publish on the Department’s website a list of all entities that are designated and those that are suspended under subsection (4).

Form of commitment

98.04 (1) A commitment must be in a written or electronic form that is acceptable to the Minister and must be provided by a person who has the authority to bind the designated entity.

No fee for commitment

(2) A commitment does not respect these Regulations if the entity that made it charges a fee to review and assess the business proposal or to assess the business.

Multiple applicants

(3) If there is more than one applicant in respect of a commitment, the commitment must

Conditional commitment

(4) If there is more than one applicant in respect of a commitment, the commitment may be conditional on the issuance of a permanent resident visa to one or more of those applicants.

Minimum investment

98.05 (1) The Minister must establish the minimum total amount that the designated entities involved in the commitment must invest by buying shares or other forms of equity in the applicant’s business.

Types of entities

(2) The Minister may establish different minimum investment amounts based on whether the commitment was made by a business incubator, an angel investor group or a venture capital fund and, for commitments involving more than one type of entity, may specify different minimum investment amounts for commitments involving different combinations of entity types.

Factors

(3) The Minister must establish the minimum investment amount on the basis of the following factors:

Public notice

(4) The Minister must publish the amounts established under subsection (1) on the Department’s website.

Qualifying business

98.06 (1) For the purposes of paragraph 98.01(2)(d), a qualifying business with respect to an applicant is one

Exception — intention

(2) A business that fails to meet one or more of the requirements of paragraphs (1)(a) to (c) is nevertheless a qualifying business if the applicant intends to have it meet those requirements after they have been issued a permanent resident visa.

Ownership structure

(3) The Minister must establish

Qualified participant

(4) For the purpose of paragraph (3)(b), a qualified participant is

Factors

(5) The Minister must establish the percentages referred to in subsection (3) on the basis of the following factors:

Public notice

(6) The Minister must publish the percentages established under subsection (3) on the Department’s website.

Documentation

98.07 (1) An applicant must provide documentation to establish that they are a member of the start-up business class, including

Production of other documents

(2) In evaluating an application in the start-up business class, an officer may, in addition to these documents, require the production of documents that are in the possession or control of the applicant or of the entity making the commitment and that relate to the applicant, the commitment or the business.

Assessment of commitment

98.08 (1) If the officer is not satisfied that the entity assessed the applicant and the applicant’s business in a manner consistent with industry standards or is not satisfied that the terms of the commitment are consistent with industry standards, the officer may refuse to issue the permanent resident visa.

Multiple applicants

(2) If there is more than one applicant in respect of the same business and one of the applicants who was identified in the commitment as being essential to the business is refused a permanent resident visa for any reason or withdraws their application, the other applicants must be considered not to have met the requirements of subsection 98.01(2) and their permanent resident visa must also be refused.

Peer review

98.09 (1) An officer may request that a commitment, the applicants and designated entities party to the commitment and the qualifying business to which the commitment relates be independently assessed by a peer review panel established under an agreement referred to in section 98.02 by an organization that has expertise with respect to the type of entity making the commitment.

Grounds for request

(2) The request may be made if the officer is of the opinion that an independent assessment would assist in the application process. The request may also be made on a random basis.

Independent assessment

(3) The peer review panel’s assessment must be independent and take industry standards into account.

Assessment not binding

(4) An officer who requests an independent assessment is not bound by it.

Substituted evaluation

98.10 (1) An officer may substitute their evaluation of the applicant’s ability to become economically established in Canada for the requirements set out in subsection 98.01(2), if meeting or failing to meet those requirements is not a sufficient indicator of whether the applicant will become economically established in Canada.

Exception

(2) However, a substitute evaluation must not be conducted for an applicant who did not have a commitment from a designated entity on the day on which they made their application.

Concurrence

(3) A substitute evaluation made under subsection (1) requires the written concurrence of a second officer.

Inspections — organization

98.11 (1) An officer may inspect any organization that has entered into an agreement referred to in subsection 98.02(1) in any of the following circumstances:

Inspections — designated entity

(2) An officer may inspect an entity designated under subsection 98.03(1) in any of the following circumstances:

Other inspection

(3) In addition, the powers set out in sections 98.12 and 98.13 may be exercised with respect to

Inspections — business

(4) The powers set out in sections 98.12 and 98.13 may be exercised with respect to a business that is the subject of a commitment by a designated entity with respect to the start-up business class if an officer is inspecting that designated entity in accordance with subsection (2) and an inspection of the business is necessary to verify that the designated entity is in compliance with the conditions set out in subsection 98.03(3).

Inspections — third party

(5) The powers set out in section 98.12 may be exercised with respect to a third party if an officer is inspecting an organization in accordance with subsection (1) or a designated entity in accordance with subsection (2) and an inspection of the third party is necessary to verify that that organization or that designated entity is in compliance with the conditions set out in subsection 98.02(3) or 98.03(3), as the case may be.

Answering questions and providing documents

98.12 (1) When conducting an inspection in accordance with section 98.11, an officer may, for the purpose of verifying that the organization or designated entity is in compliance with the relevant conditions,

Justification

(2) A failure to comply with an obligation under paragraph (1)(a) or (b) is justified if the person, organization, entity or business made all reasonable efforts to comply with the obligation or if the failure results from anything done or omitted to be done by them in good faith.

Entry to verify compliance

98.13 (1) Subject to subsection (7), when conducting an inspection in accordance with section 98.11, an officer may, for the purpose of verifying that the organization or designated entity is in compliance with the relevant conditions, enter and inspect any premises or place in which business is conducted by the organization, the designated entity or a business that is the subject of a commitment.

Powers in place or on premises

(2) When on the premises or in the place the officer may

Obligation

(3) An organization, entity, or a business that is the subject of a commitment, must, on request, provide an employee or representative to attend any inspection referred to in subsection (1), to give all reasonable assistance to the officer conducting that inspection and to provide that officer with any document or information that the officer requires.

Justification

(4) A failure to comply with an obligation under paragraph (2)(b), (c) or (f) or subsection (3) is justified if the organization, entity, or a business that is the subject of a commitment made all reasonable efforts to comply with the obligation or if the failure results from anything done or omitted to be done by them in good faith.

Entering private property

(5) An officer and any person accompanying the officer may enter on and pass through private property, other than a dwelling-house, to gain entry to the premises or the place. For greater certainty, they are not liable for doing so.

Person accompanying officer

(6) A person may, at an officer’s request, accompany the officer to assist them to access the premises or the place.

Dwelling-house

(7) In the case of a dwelling-house, an officer may enter it without the occupant’s consent only under the authority of a warrant issued under subsection (8).

Issuance of warrant

(8) On ex parte application, a justice of the peace may issue a warrant authorizing an officer who is named in it to enter a dwelling-house, subject to any conditions specified in the warrant, if the justice of the peace is satisfied by information on oath that

4 (1) Subsections 102.3(4) and (5) of the Regulations are replaced by the following:

Evaluation of language proficiency

(4) The Minister may designate, for any period he or she specifies, any organization or institution to be responsible for evaluating language proficiency and approve the language test to be used to evaluate that proficiency if the organization or institution

Public notice

(5) The Minister must make available to the public the names of the designated organizations or institutions and the approved language tests.

(2) Subsections 102.3(7) and (8) of the Regulations are replaced by the following:

Revocation of designation

(7) The Minister may revoke a designation of an organization or institution or the approval of a language test if

Conclusive evidence

(8) The results of an evaluation of language proficiency by a designated organization or institution using an approved language test are conclusive evidence of an applicant’s language proficiency for the purposes of subsection (1) and of paragraph 98.01(2)(b).

5 Section 107 of the Regulations is repealed.

6 Subsection 108(1) of the Regulations is replaced by the following:

Application for visa

108 (1) Subject to subsection (5), if a foreign national makes an application as a member of the Quebec investor class, the Quebec entrepreneur class, the start-up business class, the self-employed persons class or the Quebec self-employed persons class for a permanent resident visa, an officer may only issue the visa to the foreign national and their accompanying family members if they meet the requirements of subsection 70(1) and, if applicable,

7 The portion of paragraph 295(1)(b) of the Regulations before subparagraph (i) is replaced by the following:

Coming into Force

8 These Regulations come into force on April 1, 2018, but if they are registered after that day, they come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Canada has demonstrated that it would benefit from a permanent immigration program to attract innovative foreign entrepreneurs. There is increasing competition around the world for top entrepreneurial talent and the Start-up Business Class (known as Start-Up Visa), which was launched in April 2013, helps to maintain Canada’s competitive advantage by ensuring that foreign entrepreneurs have a direct pathway to acquiring permanent residence and launching their start-ups in Canada. More broadly, the program supports the Government of Canada’s priorities for fostering innovation, attracting investment and supporting economic growth.

However, Start-Up Visa is a pilot program and its pilot phase expires on March 31, 2018. The pilot was created through Ministerial Instructions and under the Immigration and Refugee Protection Act, these pilot programs are limited to a five-year duration and cannot be extended. In order to make Start-Up Visa a permanent program, it must be incorporated into the Immigration and Refugee Protection Regulations.

Background

The Government of Canada administers a number of immigration programs that contribute to Canada’s economic and labour market needs, including business immigration programs. Over time, these business immigration programs became outdated and no longer aligned with the current economy. As a result, the Government of Canada has been testing new approaches to attract business immigrants to Canada who can better support the country’s current economic needs.

As part of a shift toward lower-volume programs aimed at attracting innovative business people, Start-Up Visa was launched through Ministerial Instructions in April 2013 as a five-year pilot program that provides permanent residence to innovative entrepreneurs with the potential to build high-growth start-ups in Canada that can compete on a global scale.

Start-Up Visa leverages partnerships with venture capital funds, business incubators and angel investor groups (collectively known as “designated entities”), as well as their industry associations, to identify promising entrepreneurs. Foreign entrepreneurs wishing to apply to the program must first secure support for their business from one of these designated entities. They must also, among other requirements, have a certain level of official language proficiency, business ownership shares and personal funds. Together, these criteria are tailored to entrepreneurs with potential for long-term success.

A 2016 program evaluation found that Start-Up Visa has been successful in attracting innovative entrepreneurs to Canada. As of January 1, 2018, 170 entrepreneurs have been approved for permanent residence through the program. Together, these entrepreneurs have launched over 100 companies in Canada.

Objectives

The objective of the regulations is to advance the Government of Canada’s commitments to attracting innovation, investment and global skills by making Start-Up Visa a permanent program.

Description

The regulations create Start-Up Visa as a new permanent resident program for business immigrants under the economic class and cover a number of elements:

(1) Requirements for entrepreneurs applying to immigrate through the program

(2) Role of designated entities participating in the program

(3) Authorities of the Minister of Immigration, Refugees and Citizenship

(4) Procedures for application processing

“One-for-One” Rule

The “One-for-One” Rule does not apply to these regulations, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to these regulations, as the regulations are not expected to increase compliance or administrative costs for small businesses.

Consultation

As a pilot, Start-Up Visa was created to fill a gap identified by the Canadian private sector to attract high-calibre entrepreneurs. The program was created through close consultation with stakeholders and they have been involved in the policy design since its inception. Throughout the pilot phase, Immigration, Refugees and Citizenship Canada has regularly sought advice from industry associations and designated entities on program requirements. The private sector is very supportive of Start-Up Visa and has expressed a strong desire for it to become a permanent program. In February 2017, provinces and territories were also consulted on Start-Up Visa and did not raise objections to implementing it as a permanent program at the end of its pilot phase.

On November 25, 2017, a Notice of Intent was published in the Canada Gazette, Part I to seek comments on the Department’s plans for these regulations during a 30-day comment period. No comments were received.

Rationale

Implementing the regulations will ensure that Canada remains a welcoming destination for innovative foreign entrepreneurs. The positive outcomes achieved during Start-Up Visa’s pilot phase, the recommendations from the 2016 program evaluation, and the strong support for the program from the Canadian private sector all point to the need for Start-Up Visa to be launched as a permanent program. The costs of the program are minimal compared to the overall benefits for Canada and Start-Up Visa complements the existing suite of economic immigration programs. Regulations are the only option for implementing Start-Up Visa as a permanent program once its pilot phase ends.

Gender-Based Analysis Plus

A Gender-Based Analysis Plus assessment was conducted in the development of the regulations. All applicants under Start-Up Visa are assessed according to a defined set of selection criteria, irrespective of gender, age, religion, ethnicity, sexual orientation or other diversity factors. The pool of applicants during the program’s pilot phase has been extremely diverse. Based on applications received between 2013 and 2016:

Once the regulations are implemented, the Department will continue to monitor the proportion of women and diversity of applicants under Start-Up Visa and assess any processes or criteria that may present barriers to their participation.

Implementation, enforcement and service standards

The Minister of Immigration, Refugees and Citizenship is responsible for the administration of Start-Up Visa but the program is implemented in close partnership with the private sector. The Minister enters into agreements with industry associations representing business incubators, angel investor groups and venture capital funds in order to support the program. These industry associations provide the Minister with recommendations for designating entities under the program (as well as de-designating entities if they are not operating in accordance with program requirements). Designated entities then assess foreign entrepreneurs’ business proposals to identify innovative ventures. When designated entities identify promising entrepreneurs that they choose to support, they submit a commitment certificate to visa officers at Immigration, Refugees and Citizenship Canada. The entrepreneurs then submit a permanent resident application, which visa officers process.

The regulations come into force on April 1, 2018 (or the day on which they are registered if registered after that date). Prior to the launch of the permanent program, Immigration, Refugees and Citizenship Canada will coordinate with its private-sector partners to ensure a smooth implementation for Start-Up Visa. Communication activities will also take place to inform the public of the program launch and provide foreign entrepreneurs with application forms and instructions. After program launch, the Department will monitor application processing times as part of its commitment to client service. It will also monitor compliance from private-sector partners to ensure that all of their activities under Start-Up Visa align with program requirements and uphold a high standard of program integrity. In cases of non-compliance, the Minister may de-designate and/or terminate agreements with these organizations.

Contact

Laurie Hunter
Director
Economic Immigration Policy and Programs
Immigration Branch
Immigration, Refugees and Citizenship Canada
Telephone:
613-437-6181
Email:
IRCC.Selection-Sélection.IRCC@cic.gc.ca