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The Investment Industry Association of Canada (IIAC) has suggested that increasing foreign direct investment (FDI) in Canada could help rebuild the economy in the wake of Covid-19.

In a May 5 letter to federal Finance Minister Bill Morneau, IIAC president and CEO Ian Russell wrote that there are “tens of thousands” of foreign investors looking for permanent residence in Canada, and other countries will benefit from their wealth if Canada doesn’t.

Russell suggested the federal government could increase FDI by re-introducing “a formal immigrant investor program, building on the strengths of the previous federal program.”

The previous program, the Federal Immigrant Investor Program (FIIP), was closed in 2014 as a result of the Economic Action Plan 2014 Act, which found that large backlogs of applications tied to economic immigration programs were a major hurdle for the immigration system.

IIAC conceded that the FIIP had issues, but suggested a new program could be temporary and tied to the economic recovery from Covid-19.

“To speed up [the program’s] implementation, its structure could be similar to what exists in Quebec but with the addition of a non-refundable contribution to boost its impact,” Russell wrote. “Unlike regular investors or entrepreneurs, immigrant investors are more interested in obtaining permanent residence for themselves and their families, and having the return of their portion of capital guaranteed after a reasonable time period (5-7 years).”

The implementation of such a program would require collaboration between multiple ministries, and “the government could decide where the FDI would be best invested as per its needs for post-Covid-19 recovery,” Russell said.

Dealer firms regulated by the Investment Industry Regulatory Organization of Canada (IIROC) could “help design, promote and support this new [FIIP] program,” Russell suggested, adding that many IIROC members were “involved in the FIIP process” by acting as consultants to other countries.

In data released in late February, Statistics Canada said foreign direct investment in Canada was positive in Q4 2019, but lower than what was recorded a year earlier.

Read the full IIAC letter.