PNP deposit hike
Province doubles deposits for applicants to $200,000
Immigrants who use P.E.I.’s Provincial Nominee Program to gain express entry into the country now have to pay a much higher deposit to the P.E.I. government.
Previously, immigrant investors under the business stream of the Provincial Nominee Program (PNP) were required to make a $100,000 deposit, to be held in escrow by the provincial Crown corporation, Island Investment Development Inc.
That deposit has doubled to $200,000.
Jamie Aitken, executive director of Island Investment Development Inc., says deposits were increased to ensure the best possible applicants come to P.E.I. through this program.
“The deposit is there to ensure the applicants do come to P.E.I., that their intentions are genuine and they will commence a business operation,” Aitken said.
“We want to make sure we are attracting the best applicants, so increasing the escrow would increase the genuine integrity of the applicants.”
Foreign nationals who apply to the business stream of the PNP can get a full refund of their $200,000 deposit only by meeting both residency and business ownership requirements.
After six months of residency on the Island, they can get $25,000 of their deposit returned. They get another $25,000 after one year in P.E.I.
The remaining $150,000 is returned once the applicant meets the conditions of the escrow agreement they sign with the province. Applicants have three years to meet the terms for a full refund.
The escrow agreement says they must open or purchase a business in P.E.I. or invest in an existing business, owning no less than 33-and-a-half per cent of the company’s equity.
They must also meet certain basic English language requirements, demonstrate a minimum net worth of $600,000, be between 21 and 59 years of age and have business ownership experience.
They also must make an exploratory trip to the province and submit a detailed business plan for approval.
“We have not seen a negative response, so that would suggest to me potentially that change was a good one,” Aitken said of the deposit increase.
But Opposition Leader Jamie Fox takes issue with this deposit hike.
“Here, we’re trying to encourage these people to come into this country and invest in our industries and small businesses, and I would have to wonder if we increase the deposit from $100,000 to $200,000, would that limit the ability of newcomers to have the capital to put into and develop a business?” Fox said.
“This could cause them to look at other provinces or jurisdictions.”
He noted the province has pocketed millions in defaulted PNP deposits in past years, and questioned whether this could be the reason for the increase.
Interest accrued from PNP deposits is not returned to applicants.
“Is the province’s finances that desperate that we need to be putting an extra burden on the people who are trying to better their lives and improve the economy of P.E.I.?”
Aitken says there has not, to date, been a decrease in applicants nor have there been any defaulted deposits since the revamped business stream was introduced in 2012-13.
He did note the 12- to 18month application process together with the three-year escrow window means potential defaults may not have been realized yet.
P.E.I.’s PNP has been the subject of numerous investigations in the past, including by the auditor general and the RCMP.
The program has since undergone an overhaul and was relaunched with new rules and requirements several years ago.