The Start-Up Visa program is designed to help foreign entrepreneurs gain permanent residence in Canada. Initially introduced as a five-year pilot project in 2013, it was created to replace the longstanding Federal Entrepreneur Program that had been in operation since the 1970s.
However, the Start-Up Visa program has not proven to be a suitable replacement. Although the program has grown over the years, our analysis found that it’s still only half the size the Federal Entrepreneur Program was in 2010.
The Start-Up Visa program is falling short in a number of key areas, including job creation, global trade opportunities and the long-term viability of businesses.
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The primary concern with the Start-Up Visa program is its ability to create jobs. Unlike the Federal Entrepreneur Program, which required those coming to Canada to create at least one new job, the Start-Up Visa program doesn’t have job creation requirements in its admission criteria.
Job creation is an important reason why Canada has expanded its pathways to permanent residency. Immigrants with a variety of professional experiences can contribute to Canada’s growing economy, and business immigration plays an important role in that growth.
Aside from job creation, the Start-Up Visa program has additional objectives to boost innovation and internationalization. However, the ability of the Start-Up Visa program to attract businesses that are innovative is still unclear.
A study by Statistics Canada using data from 2011, 2014 and 2017 revealed that immigrant-led businesses operating in Canada for over 20 years were more likely to implement innovations in processes, products or marketing, and use patents compared to similar Canadian-owned firms. This suggests that businesses from the Federal Entrepreneur Program were not necessarily underperforming.
While it’s anticipated that businesses entering through the Start-Up Visa program will exceed these results, the lack of data makes it difficult to determine whether this is actually the case. Only a few applicants were endorsed by investors, and most were supported by incubators, meaning applicants consist primarily of early-stage startups. While they might be innovative, they will likely face challenges in terms of survival and longevity.
One issue is whether the Start-Up Visa program is diverting potential applicants away from other programs. Another is whether it genuinely offers a route to permanent residency for those who are unlikely to succeed in other pathways.
Whether a policy works depends on its evaluation. The Federal Entrepreneur Program was shut down because many foreign entrepreneurs started small, unscalable businesses, which were deemed unsuitable for Canada’s future economic landscape. However few, these businesses brought in foreign direct investment and created jobs.
Our policy recommendation is that IRCC should conduct a thorough evaluation of the Start-Up Visa program to measure its performance regarding its stated objectives of job creation, innovation and internationalization, as well as provide achievable targets for these objectives.
When IRCC closes a pathway to permanent residency and opens up a new one, Canadians should ask not just whether it aligns with our objectives, but also whether those objectives are clear, measurable goals that can be evaluated over time.