Four years have passed and government still has yet to determine whether companies that benefited from the Provincial Nominee Program spent their immigrant investments appropriately.
Island Investment Development Inc. (IIDI), the agency that ran the PNP, is still reviewing information from a ‘blind sample’ of 157 companies selected for follow-up on their Use of Proceeds Agreements, according to an email response provided to The Guardian Monday.
These agreements were signed by companies that applied to the PNP after October 2007. They accompanied a business plan and included a detailed explanation of how companies would spend the immigrant investments they received.
Although IIDI sent out its first letters in late 2009 reminding companies to file reports on these expenditures, the agency is still in the midst of following up with this blind sample of companies and determining whether their Use of Proceeds Agreements were honoured.
“IIDI is currently reviewing information received to date, and in a few cases has requested additional information from the investee company,” a communications officer with Innovation P.E.I. wrote in an email to The Guardian.
“Once the entire blind sample has had an opportunity to report and the assessment has been complete, IIDI findings will be published in its annual report. Releasing a partial summary of the sample taken would not be a true representation.”
The Use of Proceeds Agreement stated all proceeds from PNP units must be used for either expansion of business operations or the purchase of necessary capital assets, excluding motor vehicles. It required all recipient companies to file a report detailing how they spent their PNP investments and submit it to IIDI within two years.
Former Auditor General Colin Younker noted during his investigation into the PNP in 2009 there were no follow-up procedures in place to ensure these reports would be filed. He recommended IIDI develop a strategy to follow up on businesses that received PNP units and to include the results in its annual report. He also pointed out that the initial files subject to the Use of Proceeds Agreement would be due in the fall of 2009.
Younker also told the public accounts committee his office sought a legal opinion on the proceeds agreement which determined it is legally binding, and that IIDI can pursue companies that do not comply with heavy fines.
In its response to the auditor general, IIDI said it consulted its own legal counsel and determined it has the ability to follow up with only the companies who signed the Use of Proceeds Agreement.
“IIDI will be following up with those companies,” IIDI wrote to the AG's office in 2010.
The Guardian's attempts to secure an interview with someone from the department or IIDI on this issue were unsuccessful.
No indication was given on when IIDI will release the information it obtains from PNP recipient companies on the use of their immigrant investments.
A total of 1,354 companies benefited from P.E.I.'s Provincial Nominee Program. It offered permanent residency to immigrants who invested money into a local business and was aimed at boosting immigration to the province. The federal government shut down the immigrant investor stream of P.E.I.'s PNP in the fall of 2008 after officials were made aware P.E.I.'s nominees were not taking an active, day-to-day role in the companies in which they invested.