Canada at a Crossroads
Canada is at an economic crossroads. For two decades, our GDP per person has been steadily declining relative to the US, from 82% of the US figure in 2002 to 72% in 2022. If current trends continue, by 2060 Canadians will be earning just $63,000 per person compared to $94,000 in the US, as outlined in a report by the Fraser Institute. This widening prosperity gap is the biggest challenge to our future as a country. In 2023, 34% of entrepreneurs in Canada were immigrants and 34% in 2024, so they're a growing presence in the economy and the population.
The Overlooked Solution: Immigrant Entrepreneurs
Economists and political parties propose abstract solutions: internal investment incentives, regulatory reform and bureaucratic streamlining. But we think the most powerful, practical solution is hiding in plain sight: immigrant entrepreneurship and entrepreneurs. One in four new businesses in Canada is started by an immigrant entrepreneur, so they're a critical part of the economy. By 2034, immigrants will be more than 40% of Canadian entrepreneurs, so they're only going to get more important. Immigrant entrepreneurship impacts the Canadian economy by creating jobs, innovation and community diversity.
Meet Immigrant Entrepreneurs
Immigrant entrepreneurs are key to Canada's economic growth, bringing new ideas and a strong work ethic to the country. According to recent surveys, immigrant-owned businesses are more likely to create jobs and contribute to the Canadian economy than non-immigrant owned businesses. In fact, immigrant-led firms are responsible for a big economic benefit, 25% of net job creation in the private sector. With more immigrant entrepreneurs in Canada and the growing immigrant population , we need to understand their role in our economic future.
Why Immigrant Entrepreneurs Succeed
Through our work at Sobirovs Law Firm helping business owners and investors immigrate to Canada, we've seen firsthand the unique qualities immigrant entrepreneurs bring. They have an appetite for risk that's built into their decision to uproot their lives and start anew in a foreign country. That's remarkable resilience, bravery and risk tolerance. Immigrant entrepreneurs are twice as likely to start a new business as the Canadian-born population, so they're more entrepreneurial. Immigrant-owned businesses create more net jobs per business than businesses owned by the Canadian-born population, so they have a big economic impact on local communities. Senior employees in these businesses play a key role in managing operations and growth.
Equally important, immigrant entrepreneurs come with realistic expectations. They know they're entering a new economy and environment with unique challenges. They come prepared to learn, adapt and persevere until they succeed. That combination of risk tolerance and pragmatism creates business owners who don't give up at the first sign of trouble. Community support is also important, as local engagement and referrals can speed up the immigration process and business establishment.
Consider one of our clients, an entrepreneur from the Middle East with Southeast Asian origins. She boldly went into Canadian agriculture, growing crops and creating food products for export back to Middle Eastern markets. With no previous experience in Canadian agriculture, she persisted, created a "Made in Canada" brand and built a successful export business. Her venture created jobs, contributed to the local economy and created a new Canadian brand in global markets, positively impacting local communities.
Economic Impact: Jobs and Innovation
Immigrant-led firms are driving Canada's economic growth with higher job creation rates and more intellectual property than non-immigrant owned firms. In provinces like British Columbia and Ontario, immigrant-owned businesses are more prevalent, with over 40% of entrepreneurs in these regions being immigrants. Besides, immigrant women are making a big impact and significant economic benefit, with a higher rate of entrepreneurship than non-immigrant women. As the immigrant population grows, immigrant-led firms and immigrant entrepreneurship will only get more important in Canada's economy.
Intellectual Property and Global Competitiveness
Immigrant entrepreneurs are also driving innovation in Canada, with higher intellectual property creation than non-immigrant owned firms. In fact, immigrant-led firms are more likely to create new products and services and export them globally. With access to expertise and resources, immigrant entrepreneurs can protect their intellectual property and bring their ideas to market. As Canada grows and develops, immigrant entrepreneurs will only get more important in driving innovation and economic growth.
Bridging Canada to the World
For decades, Canadian businesses have focused on the US market due to proximity and ease of access. But as America becomes more protectionist, Canada must look beyond North America to thrive, according to the latest report. That's where immigrant entrepreneurs come in.
When we bring entrepreneurs from around the world to Canada in a structured and systematic way, they bring their global experience and connections with them. They create or acquire Canadian companies and serve as bridges to foreign markets in Asia, Latin America, Europe and the Middle East.
This international mindset is a highly valuable asset that can't be developed within Canada alone. You need outsiders with global experience to implement strategies for expanding into new markets. Immigrant entrepreneurs don't just take over retiring Canadian businesses; they bring the world to Canadian doorsteps and Canadian products to the world. In British Columbia and Ontario, over 40% of entrepreneurs are immigrants, so they're key to these provinces' economies. In some provinces, the proportion of immigrant entrepreneurs will reach 50% by 2034, so they'll be even more important.
Regional Disparities in Settlement and Impact
But regions like the Atlantic provinces have much lower representation, showing the regional disparities in entrepreneurship among immigrants.
Also, the settlement patterns of immigrant entrepreneurs vary across Canada. While many choose to settle in major economic hubs like Ontario and BC, fewer immigrants choose to settle in areas like the Atlantic provinces and Quebec, so the overall share of immigrant entrepreneurs in these regions is lower.
The Immigration Limbo
Most frustrating is seeing the current system waste entrepreneurial potential. We've seen many immigrant entrepreneurs invest in Canadian businesses and create 7-10 new jobs, only to find themselves unable to transition from temporary to permanent resident status due to changing immigration laws without notice. This creates a vicious cycle. When entrepreneurs don't see a clear path to permanent status in Canada, while other countries have more predictable immigration programs, they exit Canada and take their capital and talent elsewhere. Investment requires certainty and predictability, which our current system doesn't provide.
Meanwhile, many of our clients who do stay buy small and medium businesses in Canadian provinces and rural areas through such PNP Entrepreneur programs of Alberta, Nova Scotia, British Columbia and New Brunswick. They maintain existing jobs, provide successful retirement exits for Canadian business owners and add business activity, tax revenue and sales to their communities. If we don't offer a clear pathway to permanent residence, then we may lose such an entrepreneurial population.
Pathways to Stay: Current PR and Work Permit Options Are Insufficient
For immigrant entrepreneurs, there are several pathways to permanent residence in Canada that require active business management. The Entrepreneur Immigration program for example provides a pathway to permanent residence for entrepreneurs who want to start a new business in Canada. This program requires a minimum level of investment and job creation, as well as a comprehensive business plan. Another option is the Provincial Nominee Program, which allows provinces to nominate entrepreneurs for permanent residence based on their ability to contribute to different local business environments across Canada. With the right support, services, and resources, immigrant entrepreneurs can navigate these pathways and establish successful businesses in Canada.
In addition to pathways to permanent residence, there are also work permit options for immigrant entrepreneurs. The Temporary Foreign Worker Program, for example, allows entrepreneurs to work in Canada on a temporary basis while they establish their business. This program requires a job offer from a Canadian employer and a labour market impact assessment to ensure that the entrepreneur's presence in Canada will not negatively impact the local labour market. With the right work permit, immigrant entrepreneurs can gain valuable experience and build their business in Canada.
Having said that, there is no purely investor category immigration program in Canada. We need one.
The Investment Paradox
A staggering statistic reveals Canada's investment problem: 95% of mid-cap growth companies are rejected for venture financing. Meanwhile, the Canadian economy needs business investment to close the growing prosperity gap with the US.
We believe immigrant investors are an untapped solution to this paradox. Canada needs to attract "cheap money" from global investors seeking permanent residency. Currently, we welcome those who bring skills and knowledge, but create barriers for those who want to contribute capital. Applicants must submit a single, complete application package to ensure they meet all requirements. Learn more about an investment immigration program that could benefit Canada. This must change. Some contribute with skills, others with knowledge and others with capital. We need pathways for all three. Specifically, we propose two major changes to Canada's business immigration system:
- First, create a passive investment immigration program for those who want to invest money without day-to-day business involvement. Their capital can attract great talent to Canadian companies and strengthen our economy.
- Second, create an immigration program that allows foreigners to become co-founders or owners of existing Canadian companies. When they buy shares in a Canadian business grant them permanent residency. Their investment will directly benefit their chosen company, whether a startup or an established business.
Also we should empower provinces to bring more entrepreneurs under their nominee programs and give them more authority to select entrepreneurs based on local needs. This will help distribute immigrant entrepreneurs beyond major cities into all provinces.
A New National Mindset
Beyond policy changes Canada needs a fundamental mindset shift. We must recognize that immigration statuses are being sold worldwide and approaches like "Canadian citizenship is not for sale" are counterproductive.
Instead we should properly vet potential investors, ensure their income is legal and welcome them as new Canadians. It is crucial for prospective candidates to provide information about their backgrounds and business proposals during the application process, and they should be treated with respect throughout this process. Once they become citizens they are subject to Canadian laws and taxation while bringing additional benefits beyond their initial investment. They create opportunities and make further investments in knowledge and skills that benefit our nation.
Such a program wouldn't need to be massive. Even 10,000 investor immigrants annually would be a tiny fraction of Canada's population while injecting significant capital into our economy. Organizations play a key role in supporting immigrant entrepreneurs by providing essential resources, mentorship and funding, driving innovation and economic growth.
Resilience Through Diversity
Immigrant entrepreneurs also bring remarkable business resilience. When they arrive in Canada they understand profitability may not come in year one. They persist, working hard as they get accustomed to local business culture and market conditions. They are making exploratory visits to Canadai to explore opportunities, understand the local business environment and assess community fit for their business and lifestyle, like explorers in the new world realities. These features create business owners who push through challenges rather than abandon ship at the first sign of trouble. They will become bridges between Canada and their home countries while bringing technical knowledge and global experience that most Canadian companies lack. Adding more immigrant entrepreneurs allows us make Canadian businesses more global not just local.
The economic math is simple: Canada's prosperity gap with the US is growing. Our mid-market companies can't access capital. We have a massive wave of business owner retirements and a huge need for younger age entrepreneurs. And our traditional economic relationship with the US is becoming increasingly uncertain. Immigrant owned firms account for 25% of net job creation in Canada making them a vital part of our economic resilience and shaping the future. Furthermore immigrant entrepreneurs create more net jobs per business than Canadian born businesses, so they are key to addressing these economic challenges. A recent survey shows that 10.9% of immigrant led firms plan to increase their research and development (R&D) spending compared to 6.7% of all private sector firms, so they are innovative and will play a big role in the Canadian economy.
The Time is Now
The time for change is now. With 9 million Canadians retiring by 2025 we will have thousands of business closures. Research is needed to understand the economic impact of immigrant entrepreneurs and their role in mitigating these closures. We need a strong taxpaying base to support our retired population, their needs and pension payments.
If we don't make these changes Canada's GDP and overall economy will suffer and we will have weakened negotiating power with the US. We need to grow our taxpayer-entrepreneur population which has been declining for decades. We need more entrepreneurs actively running businesses, paying taxes and creating jobs. Private sector firms are a big part of the Canadian economy and immigrant entrepreneurs contribute more to job creation and innovation than all private sector firms.
Immigrant entrepreneurs are our best hope to reverse these trends. They bring risk tolerance, realistic expectations, global connections and an international mindset that can transform our economy. But we must reform our immigration system to welcome them properly.
The future of Canada's economy depends on it.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
