Controversial history

P.E.I. PNP has previously faced allegations of fraud, probes by authorities

The Provincial Nominee Program has a storied history of controversy over the last decade in Prince Edward Island.

A previous version of the program was investigated by the province’s auditor general and reviewed by the RCMP.

Problems with that version of the PNP began in the fall of 2008.

Nominees were offered permanent residency in Canada if they invested between $105,000 and $200,000 on P.E.I., some of which went into an existing Island company. It was established to encourage immigration to the province.

But Ottawa shut down the P.E.I. PNP in 2008 after it discovered the province was allowing immigrants to invest in companies in which they had no active involvement.

P.E.I.’s auditor general launched an investigation into the program in 2009 and found the government of the day broke rules, changed rules without proper approval and approved local businesses for immigrant investments that should not have qualified.

Several current and former MLAs, senior level bureaucrats and their spouses received immigrant investments for their personal businesses.

The PNP later made national headlines during the 2011 provincial election, when the federal government called in the RCMP and the Canada Border Services Agency (CBSA) to probe allegations of bribery and fraud regarding the P.E.I. PNP from three former provincial employees who worked on the program.

Both the CBSA and RCMP reviews of the program eventually closed with no charges.

The province re-launched the Provincial Nominee Program five years ago, with different rules for business class immigrants that better complied with federal requirements.

Under the current business impact stream, applicants deposit $200,000 to be held in escrow by the provincial Crown corporation, Island Investment Development Inc.

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 business agreement. It says they must open 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. Applicants have three years to meet the terms for a full refund.

Last year, two thirds of nominees defaulted on their deposits after not opening businesses or not meeting terms of their agreements.