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Ottawa seeks to attract foreign talent by making Start-up Visa Program permanent

Navdeep Bains, Minister of Innovation, Science and Economic Development, answers a question during Question Period in the House of Commons in Ottawa, Tuesday, April 4, 2017. THE CANADIAN PRESS/Adrian Wyld

The federal government is moving to entrench an immigration pilot project known as the Start-up Visa Program, which offers permanent residency to foreign entrepreneurs who agree to bring their companies to Canada.

"Our government's innovation and skills plan has identified the nurturing of entrepreneurship and the growth of startups as vitally important to Canada's economy, making the Start-up Visa Program permanent supports this very agenda," said Ahmed Hussen, Minister of Immigration, Refugees and Citizenship, during the announcement Friday at a small event at Ryerson University's DMZ in Toronto, a startup business hub.

Started in 2013 under the Harper government, the Start-up Visa Program was set to expire in 2018, but will now remain a part of Immigration, Refugees and Citizenship Canada (IRCC) policy.

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Critics of the program have pointed to the low volume of new Canadians and companies it has generated: In its first four years, 117 people have received startup visas, representing 68 companies. Of the three companies Mr. Hussen mentioned as successes, two had been purchased by U.S. companies. To be transformative to the Canadian economy, the program – and the businesses it creates – needs to grow dramatically in scale.

One choke point that stops the program from growing is the amount of work that is passed on to the private sector. A candidate for the program must have a commitment from any one of a set of qualified Canadian investors – so-called angel investors, venture-capital companies and startup incubators. And only once a potential applicant has an investment from one of these private sources of funding will IRCC consider their Visa application, which can take up to six months to process.

That has meant that instead of IRCC vetting thousands of business ideas, it falls on individual investors and their networks to wade through sometimes wildly inapplicable ideas. One investor, speaking of the chaff in the program, cited the example of a Chinese national who blasted the inboxes of the entire network with an e-mail pitch about starting a rice-paddy farm in Alberta.

The effect is that many investors simply don't spend a lot of time on pitches that they did not seek out through their own networks. Mr. Hussen said that one of the first changes his department will make, now that the program is permanent, is to develop a better online portal that will remove more of the unqualified applicants before they can pitch investors. There is also discussion of having Canadian consular officials take a more direct role in connecting with startup and accelerator networks and funnelling those entrepreneurs toward the program.

Navdeep Bains, Minister for Innovation, Science and Economic Development, said at the announcement on Friday that extending the program in tandem with the recently launched Global Skills Strategy (which fast-tracks applications for work visas in highly technical categories) is intended to show that Canada is open to international talent.

"We as as a government have been very clear that, while other jurisdictions are focused on building walls," he said, "we are truly focused on opening doors and creating opportunities for people to come here and help create and grow Canadian businesses."

Kanchan Kumar, 48, is one entrepreneur waiting to find out if his Start-up Visa Program application will be accepted. Mr. Kumar – an Indian national and co-founder of a global Web-based payment-transfer system called Remitr – is already a startup veteran, having launched two previous companies. Mr. Kumar and his two Remitr co-founders were offered a space at Ryerson's DMZ and investment by Ryerson Futures (the for-profit investing wing of the DMZ) after his company participated in Mumbai-based accelerator Zone Startup India as part of Ryerson's collaboration with the Bombay Stock Exchange Institute.

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His first visit to Canada was in February, 2016. "By the time my visit was over, we decided we would incorporate the company here," says Mr. Kumar, who applied for his visa in June, 2017. "There are very few places in the world where you can actually do this business. It's a complex environment where anti-money laundering, accounting, financial-terrorism regulations are very, very strict. I could be based in New York, I could be based in London … Canada was the perfect fit. It's a reputed geography to create a fin-tech startup, and where else can you find such diverse talent pool that comes from all parts of the world?"

The company has already hired four employees in Canada, raised $1.2-million in seed money and is planning to raise another $1-million. Mr. Kumar, who is living in Toronto as his application is under review, says that even if he is eventually turned down for his visa, Remitr will remain a Canadian startup – even if he has to run it from India.

Video: At age 22 and 23, these sisters have both founded their own startups
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About the Author
Technology reporter

Shane Dingman is The Globe and Mail's technology reporter. He covers BlackBerry, Shopify and rising Canadian tech companies in Waterloo, Ont., Toronto and beyond. More

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