HONG KONG: Canada has scrapped its controversial immigration programme that effectively allowed rich Chinese nationals to buy permanent residency in the country.
The move meant that nearly 60,000 investor applicants -- most of them Chinese -- will have their applications cancelled and fees refunded.
Canada has been the top choice for Chinese investor-immigrants because of its relaxed immigration policies, and generous publicly funded healthcare and education system.
Also, the now-defunct Immigrant Investor Programme only required applicants to commit about US$730,000 to a five-year interest-free loan to the government.
Steve Vickers, CEO at Steve Vickers & Associates, said: "Canada has been very welcoming to the Chinese community. Canadians are generally perceived to be laid back and very accommodating.
“I think they underestimated the demand, and there are unfortunately, other elements involved who've quite deliberately deceived the Canadian immigration system with no intention of living in the country but just wanting to get their hands on the passport."
Compared to similar programmes in the US and the UK, the relatively low-cost and risk-free scheme made it the world's most popular wealth migration programme.
According to local daily, the SCMP, the Canadian consulate in Hong Kong was inundated with tens of thousands of applications from wealthy mainlanders.
The situation got so bad that the consulate stopped accepting applications in 2012 as immigration staff tried to clear the backlog.
Experts said Australia could stand to gain from Canada's decision.
It has an investor visa programme requiring an investment of US$4.5 million into a local business or approved managed funds.
So far, the programme has attracted 601 applicants, of which 91 per cent are Chinese nationals.
Mr Vickers said: "There is a thirst among people who've amassed considerable money to move it offshore, to obtain a foreign passport as a form of insurance. Perhaps they're worried about corruption purges; perhaps they're worried about the future. It's a sort of safety valve."
Grace Ng, senior economist at JP Morgan, said: "For Asia as a whole, we have seen in previous experience, say in the case of Hong Kong, Taiwan, and Korea, rising wealth has led to the incentive to diversify the wealth of the rich households for the purpose of the education of their kids -- a different lifestyle elsewhere.
“That is something that we've not seen before. For the case of China, the pure size of the population is so big, if even a small portion of that is going away, it will have a more significant impact on the rest of the world."
The Canadian government said it will replace the programme with a new Immigrant Investor Venture Capital Fund to attract quality immigrants.