Showing posts with label Economy of Canada. Show all posts
Showing posts with label Economy of Canada. Show all posts

Canada's economy creating more jobs: report

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The Canadian economy is not only creating more jobs, but it is also creating better jobs, according to report from CIBC.
Topics : 
CIBCCanada
The bank's employment quality index found that the quality of jobs being created in Canada has improved over the last 12 months, and the measure is now back to pre-recession levels.
Canada was one of the first among advanced countries to come out of the recession in the summer of 2009, and one of the first to see a rebound in employment.
But initially, those jobs tended to be part-time and in lower paying sectors of the service industry.
In the last 12 months, Canada has added an impressive 283,000 jobs. CIBC said the quality of those jobs have also improved, by 2.7 per cent measured against their index.
The bank says there's been an improvement in the number of full-time jobs created over part-time.
There has also been a strong increase in paid employment rather than self-employment.
The the biggest mover of the index, CIBC said, is that new high-paying jobs have outnumbered low-paying jobs by about three-to-one.
The ongoing improvement in employment quality suggests that on average every new job generates more buying power than was the case a year ago, CIBC economist Benjamin Tal said.



Canada undergoing temporary growth spurt: BoC

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The Canadian economy likely expanded by a surprisingly strong 4.2 per cent in the first three months of the year, but it was a temporary burst of activity that is already over, the Bank of Canada says in its new outlook.
Topics : 
Canada , United States , Middle East
The central bank's new quarterly outlook paints a picture of an economy that is settling down to a protracted period of slow growth, being held back by a high loonie, a tapped-out consumer and government spending restraint.
The bank says the current second quarter will see growth brake to two per cent, less than half what it was in the first, in part because of supply disruptions to Canada's auto sector caused by the Japanese earthquake and tsunami. The disruption will lessen going forward, however.
On an annual basis, the economy is forecast to slow from 2.9 per cent this year, to 2.6 per cent next year and 2.1 per cent in 2013.
The overall take from the document is that the bank appears in no hurry to start raising interest rates to slow the economy because other factors are doing the job.
The bank doesn't appear to be overly worried that high oil and food prices might trigger inflation. It briefly notes that inflation may hit three per cent, at the upper end of the bank's acceptable range, in the next few months, but appears unconcerned.
"The combination of modest growth in labour compensation (wages) and higher productivity is expected to continue to dampen inflationary pressures, with the higher assumed value of the Canadian dollar providing further restraint," the bank said.
Economists had been pointing to either May or July as the most likely dates for the bank to start raising its policy rate from the current one per cent, which would have the effect of also raising short-term interest rates for such things as variable mortgages.
But the dovish tone of the latest outlook suggests interest rates could remain low longer, especially amid fears that moving aggressively in advance of the United States likely would have the undesired effect of lifting the loonie even higher.
The bank does concede that it has been taken by surprise by the 3.3 per cent expansion in the fourth quarter of 2010, and the likely even stronger 4.2 per cent spurt in the first three months of this year.
That means Canada's economy will likely return to full capacity by the middle of next year, earlier than previously expected.
But it stresses temporary factors were responsible, including stronger exports and domestic consumption, and that there is still plenty of slack in the economy.
The exports surge is already over, the bank says, and the persistently strong dollar averaging $1.03 US will continue to restrain exports going forward.
"The bank continues to project ... that the recovery in exports will be subdued relative to earlier global recoveries, with the higher level of the Canadian dollar assumed in this projection adding to long-standing competitive challenges," it said.
Consumption may remain moderately stronger than would be assumed, the bank says, in part because high commodity prices are increasing household purchasing power through gains in the terms of trade, the difference between export and import prices. It estimates the country's gross domestic income will rise by 4.7 this year.
Still, it believes the housing market will continue to cool and that government spending restraint will be a net drag on the economy this year.
The biggest engine of growth remains business investment, it says, in part because the higher Canadian dollar makes investment in foreign-made machinery and equipment less expensive.
Globally, the bank sees little change in the economic outlook, although it continues to stress risk factors such as high debt both among households and governments in the advanced economies, the Japanese crisis, turmoil in the Middle East and high commodity prices, especially oil.
Despite the risks, it says the global recovery is becoming more rooted and that even growth in troubled Europe is strengthening.
"The global economic recovery is projected to proceed at a steady pace over 2011-13," the bank says, projecting growth of 4.1 per cent this year and 3.9 per cent next.
The bank has slightly lowered its forecast for U.S. growth this year to three per cent, from its previous 3.3 per cent call four months ago.

IMF boosts outlook for Canada

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The International Monetary Fund boosted its expectations for Canadian economic growth this year as it warned the world is facing new threats from surging oil prices, Mideast turmoil, higher inflation in China and Europe's debt woes.
Topics : 
IMF , World Bank , The Associated Press ,United States , Canada , China

In a new economic forecast Monday, the organization raised its projection for Canadian growth of 2.8 per cent for 2011, up from an earlier forecast for 2.3 per cent.
The Canadian economy grew 3.1 per cent in 2010.
"Economic developments in Canada last year mirrored those in the United States, with the pace of economic activity moderating in midyear," the report said.
"The deceleration reflected not only the drag on Canadian exports from weak U.S. activity and strong import growth from investment spending amid an appreciating currency, but also a cooling of some domestic activity."
The IMF also lowered its expectations for Canada for 2012 to 2.6 per cent compared with 2.7 per cent in an earlier forecast. The report suggested the risks in Canada for 2011 are tilted to the downside.
"The main domestic risk being deterioration of housing markets and household balance sheets," the IMF said.
"Key external risks are lower-than-expected activity in the United States and renewed sovereign strains in Europe."
The IMF said the global economy should grow 4.4 per cent this year. That compares with global growth of five per cent last year. The IMF projects industrial countries will grow 2.4 per cent while developing countries, a group that includes China, will grow more than twice as fast at 6.5 per cent.
"The world economic recovery is gaining strength, but it is unbalanced," Olivier Blanchard, the IMF's chief economist, told reporters.
He said it would be critical for countries running large government deficits such as the United States to make progress in getting those deficits under control. At the same time, countries with large trade surpluses, such as China, will need to do more to boost domestic demand and not rely so heavily on exports to generate economic growth.
The IMF's new growth forecast was prepared for spring meetings of the 185-nation IMF and its sister lending agency, the World Bank.
Before those discussions Saturday, finance ministers and central bank presidents of the Group of 20 major industrial and developing nations will hold closed-door talks on Friday.
The finance officials will try to assess how big a threat the rise in energy and food prices will be and also what they can do collectively in response to the political turmoil in the Middle East and North Africa.
The United States is expected to keep pressing China to move more quickly to allow its currency to rise in value against the dollar as a way of making U.S. goods more competitive in China.
China, the largest foreign holder of U.S. government debt, will be seeking assurances that Washington is moving to put in place a credible plan to deal with soaring federal budget deficits.
At their last meeting in Paris in February, the G20 officials struck a watered-down deal on a group of technical indicators to track global imbalances. But the G20 left the tricky question of what to do if the balances become dangerous for later discussions.
The IMF, in its new ``World Economic Outlook,'' left unchanged its January projection that the global economy will grow 4.4 per cent this year and 4.5 per cent in 2012.
In 2009, the global economy shrank by 0.5 per cent, its worst downturn since the Second World War, with growth rebounding in 2010 to 5 per cent.
The 2.4 per cent growth forecast for the advanced economies was down 0.1 percentage point from January. The IMF expects these countries to grow 2.6 per cent in 2012.
"New downside risks are building on account of commodity prices, notably oil, and relatedly, geopolitical uncertainty as well as overheating and booming asset markets in emerging market economies," the IMF said.
Growth in the United States was forecast to be 2.8 per cent, down 0.2 percentage point from January, reflecting primarily the drag from higher oil prices. The IMF's forecast is in line with private economists.
Japan, which was hit by a devastating earthquake and tsunami on March 11, was forecast to grow 1.4 per cent this year, down 0.2 percentage point from the January forecast. The expectation is that the world's third largest economy will be slowed at first by the natural disasters but then receive a boost from the reconstruction efforts.
China, now the world's second largest economy, was projected to grow 9.6 per cent this year, a forecast that was unchanged from January. Beijing is raising interest rates to deal with rising inflation risks.
All emerging market economies, a group that includes China, India and Brazil, are expected to grow 6.5 per cent this year and next year.
Developing countries are doing better because they emerged from the recession in much better shape than many industrial countries.
"Economies that are running behind the global recovery typically suffered large financial shocks during the crisis, often related to housing booms and high external indebtedness," the IMF said.
Economic growth in the 17 countries that use the euro including Germany, France and Italy was projected to be 1.6 per cent this year and 1.8 per cent next year, an anemic recovery that reflects continued worries that debt problems in Greece, Ireland and Portugal will spread to other countries.
– With files from The Associated Press

Peter Schiff puts his money on Canadian resource sector

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Iconoclastic U.S. investor, author and commentator Peter Schiff has long been fairly bullish on Canada, its resources and its prospects. The chief executive officer of Euro Pacific Capital Inc. of Westport, Conn., came to Toronto this week to publicize the launch of his first Canadian venture, Euro Pacific Canada, in which he holds a 20-per-cent stake, and to expound on his philosophy, which underpins the firm’s investment choices.



Q. What makes Canada so attractive to you?
A. I’m already investing in Canada. I personally have more money invested in Canada than I do in the U.S. Part of that is my interest in owning resources. There are a lot of resource names up here. Pretty much all the stocks I own in Canada are resource stocks.
Q. Precious metals?
A. Energy as well, and agriculture.
Q. Your outlook on the U.S. economy is rather dark. What about the Canadian economy?
A. I’m not nearly as pessimistic about Canada. … I like Canada for the resources. [Canadians] are certainly going to be impacted by the problems in the U.S., maybe more so than other countries. So that’s a negative. A lot of it depends on how Canada reacts.
Q. In fact, you argue that Canada needs higher interest rates right now.
A. Canada’s interest rates are still much too low. But they [authorities] feel that they can’t raise them, because they don’t want to see their currency rise too rapidly against the dollar. That’s a mistake. The longer they follow our lead, the more problems they’ll create for their own economy. We’re going to take a lot of countries down that have tethered their currency to the [U.S.] dollar.
Q. But we fear that a stronger loonie will cripple our already weakened manufacturers. Why is that not a legitimate concern?
A. Ultimately, they won’t get creamed, because if the Canadian dollar is strong, then that means capital costs for Canadian businesses will be lower. There will be confidence in the future purchasing power of the Canadian dollar. Higher interest rates will mean more Canadians are saving, which will bring down the cost of capital for businesses to invest in labour-saving devices to make them more competitive. Also, when your currency goes up, the cost of raw materials goes down. … In general, manufacturers are helped by a strong currency.
The policies that produce a strong currency are sound. The policies that produce a weak currency are bad. If you’re running up big deficits on social spending and cranking out money, that’s destroying your economy.
Q. How does this figure into your bond strategy?
A. As an investor, the most important thing for me is the strength of the currency where my yields are coming from. We have Canadian bonds in my bond fund. If I’m a bond investor, it’s the only thing that matters really. I’m not worried about Canada defaulting. But I would be worried about Canada inflating. When you’re a bond investor, you want purchasing power. … I have to make sure the currency that I own [for clients] is going to deliver that purchasing power in the future. So the currency value is paramount.
Q. Obviously, you’re no fan of the U.S. currency.
A. The dollar is losing value. Right now it’s losing value more slowly than the euro. If two people jump off of a building, and one is falling at 40 miles an hour and the other is falling at 30, the one that’s falling at 30 isn’t flying. He’s still going to hit the pavement.
Q. Yet money is still pouring into U.S. Treasuries.
A. Not my money. You’re seeing the Federal Reserve buy Treasuries. But none of my clients are buying. I can’t imagine the person dumb enough. I want to find that person.
Q. I guess you’re not rushing into European sovereign debt either.
A. The maturity on my bond fund … is two-point-something years. I don’t want long-term bonds, because the rates are too low. But a lot of people are being suckered into making that tradeoff, because you can’t get any yield on the short-term bonds. So some people are buying 10- and 20-year bonds, because they need the income. They don’t realize how much risk they’re taking. As an investment adviser, I’d rather tell my client: “Look, if you really want bonds, then just buy the short-term bonds and spend some of your principal now. Because you’ll lose a lot less of it that way.”
Q. What’s your own recommendation?
A. I still try to get my clients to go away from the fixed income [sector]. If you need income, buy stocks. There are stocks that are paying 5, 6, 7, 8, 9 per cent. So you can get all the income you need.

Canadian Salary Survey

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If you had moved to Canada a few years ago from the UK, Europe or USA, you were likely to have found Canadian wages a bit lower than you were used to; not so now.

The average salary in Canadian dollars has risen by 10 to 15 percent since 2007.

This rise, in combination with the strengthening Canadian dollar, has pushed the average salary in Canada higher than in the UK, the USA and most of Europe. (Between January 2007 and January 2011, the US dollar fell 15 percent, the British pound fell 32 percent and the euro fell 11 percent against the Canadian dollar.)

Average wages for men and women working in different employment sectors are as follows


Canadian Average Hourly Earnings 2011

Earnings
Classification
Average
Hourly
Earnings 2011
Average
Hourly
Earnings 2008
Males$24.81$23.44
Females$21.33$19.83
Full Time Employees$24.81$21.66
Part Time Employees$16.24-





Average Weekly Wages in Canada in 2010
ProfessionAverage
Weekly Wage
Aug 2010
Average
Weekly Wage
Aug 2008
Forestry, logging and support$971$812
Mining and quarrying, and oil and gas extraction$1,801$1,524
Utilities$1,516$1,422
Construction$1,071$1,023
Manufacturing$977$943
Wholesale trade$1,024$960
Retail trade$501$486
Transportation and warehousing$900$873
Information and cultural industries$1,100$992
Finance and insurance$1,050$1,014
Real estate and rental and leasing$784$783
Professional, scientific and technical services$1,170$1,065
Management of companies and enterprises$1,105$1,038
Administrative and support, waste management and remediation services$727$677
Educational services$946$865
Health care and social assistance$792$752
Arts, entertainment and recreation$562$502
Accommodation and food services$361$335
Other services (excluding public administration)$670$667
Public administration$1,085$1,092





Looking at jobs throughout Canada, typical wages are as follows: 
Average Hourly Wages in Canada in 2007
ProfessionAverage
Hourly Wage
Retail Sales / Sales Clerk$11
Data Entry Clerk$15
Bookkeeper$16
Accounting Clerk$17
Truck Driver$19
Plumber$22
Carpenter$22
Executive Assistant$22
Electrician$25
Architect$27
Social Worker$28
Registered Nurse$32
Computer Engineer (not software)$33
Physiotherapist$34
Lawyer$36
Computer and Info Systems Manager$37
Engineering Manager$45
Dentist$60

Hiring new Canadians is a solution

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According to a recent research, labour shortages prevalent in the food and beverage industry in the mid 2000s will once again emerge as the Canadian economy continues to recover.

Staff writer CanadianImmigrant.ca


The Canadian Tourism Human Resource Council (CTHRC) recently published a compendium of “best practices” used in recruiting and retaining new Canadians as one potential solution to difficulty finding employees. 

According to a recent research, labour shortages prevalent in the food and beverage industry in the mid 2000s will once again emerge as the Canadian economy continues to recover. Projected shortages in the Food and Beverage industry could reach more than 142, 000 year-around jobs by 2025, the study indicates. Lessons learned during the previous labour shortages will be a valuable tool to Canadian businesses as new shortages emerge.

A&W Food Services of Canada Inc. has already begun acting, learning from those lessons, thanks to a meeting organized by the Canadian Restaurant and Foodservices Association (CRFA.) It was in the fall of 2007, during the height of the national labour shortage. At the meeting where stakeholders and the government congregated, workforce solutions were explored. Instead of targeting temporary foreign workers from overseas, restaurants were encouraged to consider the large pool of immigrants already in Canada.

Thus the opportunity emerged to work with immigrant teens already in Canada with their families and A&W restaurants in Manitoba quickly acted upon it. It started working with a local immigrant and refugee agency to address labour shortages.

While the restaurant chain has found a solution for its workforce shortage, the teen immigrants take pride in starting their Canadian careers as well as help their families make ends meet.
 The idea really took off when Newcomers Employment Education and Development Services (N.E.E.D.S.) Inc. — a local nonprofit agency that offers services to immigrant and refugee youth — created a training program in hospitality industry that would offer newcomers to Canada an opportunity to acquire essential workplace skills.

It seemed like a natural partnership that would benefit both sides: A&W commits resources and employment opportunities, while N.E.E.D.S. Inc. manages the pre-employment training and placement process. “We realize that for most of our employees, working at A&W is not a career,” admits Dean, Fuller Restaurant Franchisee responsible for four restaurants in Winnipeg. “But our young immigrant employees take full advantage of how much they learn about Canadian customer service and work culture while in our employment.“

“This employment program has had a dramatic positive effect on the families and communities that have participated,” states Robyn Andrews, N.E.E.D.S. Inc. Employment Program Coordinator. “Immigrant-serving agencies are always looking to identify employers where there is an awareness that internationally trained workers (ITWs) make a significant contribution to the labour market. Getting involved in a work training program allows your company to be more competitive in hiring and retaining ITWs.”
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Indian students turn to Canada following Australian backlash

Lambton College Residence FrontImage via WikipediaNEW DELHI—Vipin Sehajpal has worked for the past two years at a call centre on the outskirts of India’s capital, helping frustrated Dell computer owners solve technical problems.
But when he connects with a caller from Canada, the 26-year-old pauses before dispensing advice to pose a few questions of his own.
“I mostly ask about the weather, food and what life is like,” Sehajpal says.
It’s knowledge he plans to put to use in a few weeks.
Barring last-minute problems, Sehajpal will be leaving India in late December to enroll in a two-year website design course at Lambton College in Sarnia.
His pursuit of a Canadian education highlights a growing trend in India.
While Canada for years was regarded of as a sad-sack afterthought by India’s brightest college-aged students, that perception is changing fast. The number of Indian college and university students studying in Canada has surged fourfold over the past three years.
Canadian diplomats say they expect to issue student visas to as many as 14,000 Indian students this year and perhaps more than 20,000 in 2011.
In 2008, Canada approved just 3,152 visas to Indian students.
The increase comes as Canadian schools strengthen ties in India, which is among the world’s most promising markets for international students and higher education. Nearly one-third of India’s 1.2 billion population is under the age of 15 and the country’s 50 million strong middle class is expected to grow 10 times by 2025.
At the same time, the Canadian government has pledged to triple two-way trade with India to $15 billion over the next three years and adding international students will help. A recent Canadian government study showed the average international student adds $25,000 to the local economy.
David Manicom, a diplomat who heads the immigration department at Canada’s mission in New Delhi, said he was flummoxed when a group of Canadian university presidents recently toured India and spoke publicly about their efforts to coax Ottawa to increase its $1 million global budget for marketing post-secondary education. Australia, university officials pointed out, spends $20 million a year.
“The truth is that we’ve already come a long way in a very short time,” Manicom said. “The perception is that we’re trailing Australia still but that couldn’t be father from the truth.”
Manicom said there are several reasons for the dramatic increase.
For starters, unlike some other Western countries, many foreign college and university students who study in Canada gain credit towards becoming a permanent resident.
But Manicom and Canadian college officials say an overhaul of Canada’s student visa program is more responsible for the turnabout. For the past two years, the Canadian mission in New Delhi has partnered with 38 Canadian colleges to create the so-called Student Partners Program.
Under the program, colleges work more closely with the Canadian mission to understand which students will likely be approved for visas.
For instance, schools now insist students submit grades from the International English Language Testing System, or IELTS, which is run by a British group. In past years, students would provide results from a number of less reputable English proficiency testing agencies.
The mission also demands students provide financial guarantees from chartered Indian banks.
“We had cases where a student would say they had an uncle with fields of rice paddy who was willing to promise to cover their school costs and other instances where families had the value of their gold assessed as proof of their financial wherewithal,” Manicom said. “It was totally unreliable.”
Manicom said the high commission is also working more closely with schools to winnow out immigration agents who recruit under-qualified students.
Since the student visa program’s overhaul two years ago, the approval rate for Indian students applying to Centennial College has climbed to 87 per cent from 37 per cent and the number of Indian students at the Toronto school has climbed to 1,400 from 350.
“In past years, the biggest complaint we had was that it took too long for students to have their visas processed, but it’s much less cumbersome now,” said Virginia Macciavello, an official with Centennial.
Canada is also making inroads in India thanks to a public relations disaster for Australia’s educators.
While Australia has drawn more than 90,000 Indian students annually in recent years (the U.S. attracts about 105,000 Indian overseas students a year), the number of students here applying for visas to Australia has plunged by 80 per cent, Western diplomats say.
Over the past two years, Indian media have furiously chased stories about racial attacks on Indian students in Australia. There were 14 attacks during one five-week stretch in 2009, with TV channels running incendiary headlines such as “Curry Bashing” and “Australia, Land of Racists.”
Manicom conceded that Canadian officials “watched what was happening with Australia and we knew there would be some backwash.”
But Macciavello said she isn’t worried about a similar imbroglio in Canada.
“We’ve been recruiting overseas students for 30 years and we just haven’t seen any problems like that,” she said. “Canada’s just much more multicultural.”
Canadian schools also demand high IELTS test score, sometimes as high as 6.5 out of 9, to root out less qualified students who might drop out for a grey-market job. Some schools in the U.K., by contrast, demand a 4.5 IELTS score, meaning students would probably struggle to understand classes taught in English.
On a recent afternoon, Sehajpal and several other potential students crowded into an immigration agent Bhagirath Bhardwaj’s office in the heart of New Delhi.
Bhardwaj, who is paid a commission of about $150 for every student he sends abroad, said Canada is becoming a much more popular destination for students from the Indian capital region.
“I think there’s an understanding here that the Canadian economy is outperforming others and there’s a real opportunity there,” Bhardwaj.
“Immigrants have a real chance in Canada because you have such an aging population. The average Canadian is 44, which the average American is 34 and the average Indian is 26.”
Aayezah Jameel, a 30-year-old single mother, said she’s been researching Canadian schools for the past year and is now saving up, with the hopes of traveling to Canada for studies in the spring of 2012.
“When you’re a mother, planning like this takes time, nothing happens fast,” she said. “It’s a big commitment and a big deal for me because I’ll be asking my mother in Bhopal to watch my daughter for me while I’m overseas.”
Jameel, whose English was flawless, said considered schools like U.C.L.A. and the University of Texas before shifting her gaze to Canada.
“There’s really no difference with Canadian schools except they cost less,” she said. “The faculty and curriculum are just as good. I know. I’ve checked.”
Sitting next to his mother, Sehajpal, who also has a computer science degree from Agra University, said his parents forbid him from going to school in Australia. Instead, he considered schools in the U.S. and U.K. and Canada.
“Canada has a bright future and I’m excited about the possibility of staying there after school for a job,” Sehajpal said. “I’ve never seen snow before. What’s that like?”
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Canada Re-Opens Immigrant Investor Program

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OTTAWA, ONTARIO--(Marketwire - Nov. 10, 2010) - Effective December 1, 2010, Citizenship and Immigration Canada will once again accept applications under the federal Immigrant Investor Program.
Under the new program criteria, investor applicants will need to have a personal net worth of $1.6 million, up from $800,000 under the old criteria, and make an investment of $800,000, up from the previous requirement of $400,000.
"These changes were necessary," said Minister Kenney. "The requirements had not been increased in more than a decade and we need to keep pace with the changing economy."
Canada's old immigrant investor criteria were the lowest when compared to other countries with similar programs. The new criteria now align it more closely with other immigrant-receiving countries.
The investor program was suspended in June, in part because the high volume of applications was leading to wait times that were too long. Raising the requirements will help reduce the flow of applications while ensuring we attract experienced businesspeople who can make a more substantial contribution to the economy. Higher personal net worth criteria mean the program is now better positioned to attract investors with valuable business links and the resources to make secondary investments in the Canadian economy.
"Higher investment amounts mean provinces and territories will receive more investment capital to put toward job creation and economic development projects," added the Minister.
Canada's Immigrant Investor Program offers several benefits to international investors, including permanent resident status up front and guaranteed repayment of the investment.
Under Canada's old criteria, the volume of applications submitted under the Program had grown exponentially and processing times had increased. By stopping applications between June 26, 2010, and December of this year, the government prevented further delays. Applications received on or after December 1 will be subject to the new criteria and will be processed alongside the old ones. In this way, Canada can begin to realize the benefits of the changes as soon as possible.
Follow us on Twitter at www.twitter.com/CitImmCanada.
Backgrounder
New federal Immigrant Investor Program will bring to Canada more resources to fund economic development and job creation initiatives
Canada's Immigrant Investor Program (IIP) attracts experienced businesspeople who bring significant economic benefits to Canada. In order to keep pace with the changing global economy and keep Canada's program competitive, Citizenship and Immigration Canada (CIC) has changed the program so that it makes an even greater contribution to the Canadian economy. The changes were prepublished in the Canada Gazette on June 26, 2010, for a thirty-day public comment period and will take effect December 1, 2010.
Benefits of the IIP
Investments made through the program take the form of a five-year, zero interest loan to the Government of Canada on behalf of participating provinces and territories. These funds are distributed to participating provinces and territories to fund economic development and job creation initiatives in their regions. While investment strategies vary, some examples to date include venture capital investments in clean technology, public sector infrastructure investments (e.g., expansion of broadband Internet access, and construction of post-secondary institutions), and loans to small and medium-sized Canadian businesses. The provinces and territories must guarantee repayment of the investments received.
The provinces and territories are currently managing almost $2 billion of five-year, revolving IIP capital. In 2009 alone, almost $500 million was allocated through the program. British Columbia, Manitoba, Ontario, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, New Brunswick, Saskatchewan and the Northwest Territories participate in the program. Other provinces and territories have expressed interest in joining as well.
Research has shown that the IIP has a positive impact on Canada's economy. While the program is an important source of investment capital that can be used by provinces and territories, immigrant investors also make significant economic contributions by bringing to Canada business acumen, important links to global economies and an understanding of international markets.
Changes to the Program
The Government of Canada has established new eligibility criteria for the IIP. These regulatory changes now require new investors to have a personal net worth of $1.6 million, up from $800,000, and make an investment of $800,000, up from $400,000.
Higher investment amounts mean that provinces and territories will receive a greater amount of capital to put toward economic development within their regions. Higher personal net worth criteria mean that the program is now better positioned to attract investors with valuable global business links and the resources to make secondary investments into the Canadian economy.
How Canada's Program Compares to Other Countries
Canada's old IIP criteria had not changed since 1999 and were the lowest when compared to other countries with similar programs (see the chart below: International Immigrant Investor Programs). The new criteria now align Canada's program more closely with other immigrant-receiving countries, while still offering investors the competitive advantages of up-front permanent resident status and guaranteed repayment of their investment.
International Immigrant Investor Programs
  Minimum Net Worth Minimum Investment
Canada/Quebec* (old) CAD$800,000 CAD$400,000
Canada/Quebec (new) CAD$1,600,000 CAD$800,000
Australia CAD$2,157,525 CAD$1,438,350
(CAD$719,175 regional program)
UK CAD$3,331,400 CAD$1,665,700
New Zealand CAD$765,500 CAD$1,148,250
USA Not specified CAD$1,031,700
(CAD$515,850 regional program)
NOTE: Currency equivalents based on Bank of Canada nominal exchange rates, January 11, 2010.
* Under the Canada-Quebec Accord, Quebec is responsible for the selection of immigrants destined to the province, as well as the design and delivery of its own settlement services. The regulatory changes to the eligibility criteria also apply to Quebec-selected investors.
Managing Application Intake
Under the old IIP, the volume of applications grew exponentially in recent years. This surge in applications resulted in a rising inventory and longer processing times. As a result, the Department temporarily stopped accepting new applications when the changes were first proposed for public comment on June 26, 2010. These measures were put in place to prevent a flood of applications before the new criteria took effect, which would have stretched processing times even further. Once the new criteria take effect December 1, new applications will be processed alongside the old ones. In this way, Canada can begin to benefit from the changes as soon as possible.
Quebec announced its own moratorium on investor applications on October 15, and like the federal moratorium, this suspension will be lifted on December 1 when the regulatory changes to personal net worth and investment criteria take effect.
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We need immigrants as boomers retire

Toronto City Hall from Sheraton hotel roomImage via Wikipedia
Glen Hodgson
The baby boom generation in Canada is about to start retiring in growing numbers. Who will replace the boomers in the workplace? The answer, increasingly, will need to be more immigrants.
The economic situation is only going to get more demanding for Canadian employers. We expect that over the next three years the national unemployment rate will decline back toward 6 per cent, which is effectively full employment. Finding workers and containing wage pressures are already resurfacing as key issues for Canadian employers in some regions and sectors.
The role of immigration in Canada’s economic development over many centuries is generally appreciated by most other Canadians. Less well understood is the role that immigration will have to play in the coming years if Canada’s economic development and growth are to be sustained.
Around the world, there are significant differences in attitudes and policies toward immigration, with clear economic consequences. At one end of the spectrum is Japan, whose total population is already in decline. The share of its population over the age of 65 is expected to increase from 22 per cent in 2010 to more than 30 per cent by 2030. However, Japan has yet to introduce broad policies that actively encourage immigration. Although some controls on foreign workers have been relaxed, its underlying economic growth potential is being steadily eroded by this aging phenomenon and by a shrinking workforce.
Similarly, there are numerous countries in Europe that are now suffering the negative effect of an aging workforce and weak labour force dynamics. Much of Europe is struggling to find the right balance between economic and social objectives in its approach to immigration.
At the other end of the spectrum are Canada, Australia and the U.S. All three countries are actively encouraging immigration as one means of building their labour forces and economies over time.
The born-in-Canada population will continue to grow. Although the fertility rate rose slightly during the 2000s, to 1.66 in 2007, it is still well below what is needed to maintain the population through natural increase, which is 2.1 children per woman. Canada will need more immigrants if the labour force is to grow and remain vibrant. Other demographic groups that will be called on to contribute to Canada’s labour force stability are mature workers, aboriginal people, women, people with disabilities and youth.
If Canada is to increasingly rely on immigrants, obviously it needs a modernized, integrated and well-managed immigration policy.
What, then, should be the key attributes of that policy?
  Increase the weight given to economic factors. A reinvigorated immigration policy will need to recognize the importance of skills-based immigration to address Canada’s labour market needs and to unlock immigrants’ potential for making a long-term economic contribution.
  Ensure that we have an immigration system that is streamlined, coordinated and well-managed. Canada cannot afford to have an immigration system, or any national policy for that matter, where there is misalignment between the federal and provincial levels.
  Be prepared to expand the use of temporary foreign worker (TFW) programs to fill short-term gaps in labour markets. As a matter of public policy, Canada should develop an array of tools to balance short-term labour market needs with the longer-term objectives of a growing and skilled labour force. TFW programs, delivered by provincial governments through their close contact with local business, are one such policy tool.
  Increase employers’ upfront involvement. If a renewed immigration policy is to address Canada’s labour market needs appropriately, it stands to reason that employers need to be included in the decision-making and delivery process.
  Create new and improved pathways to permanent residency for TFWs and foreign students.
  Improve foreign credential recognition, access to language training, settlement services and opportunities to gain meaningful work experience. To be fully effective in the labour force, immigrants will need the same hard and soft skills and demonstrated competencies that other participants in the Canadian labour market have.
Labour supply is more plentiful now in many industries than it was two years ago, but the recession has provided only temporary reprieve from the tight labour market conditions faced during 2007 and much of 2008.
Failure to adequately plan for the coming deceleration in labour supply growth will likely leave organizations short of skilled employees and could dampen growth prospects for the entire Canadian economy.
Immigrants can come to the rescue, but only if the policy framework and the supporting infrastructure create the right conditions for success.
Glen Hodgson is the author of “Canada’s Future Labour Market: Immigrants to the Rescue?” published in the July-August issue of Policy Options ( www.irpp.org). He is senior vice-president and chief economist at the Conference Board of Canada.

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