People talk at the Canadian booth at China Education Expo 2013 in Beijing, on November 2, 2013. Photo: CFP

Running an immigration consultancy helping Chinese millionaires to obtain residency in Canada used to be a promising business.

The North American country relaxed immigration requirements in 1986, granting permanent residency to wealthy foreigners who provided five-year interest-free loans to provincial governments.

An increasing number of wealthy Chinese people have been seeking to take advantage of the policy in recent years, and consultancies charge several thousand yuan for each case.

However, the profitable business is now facing a major obstacle.

On February 11, Canadian Finance Minister Jim Flaherty unveiled his 2014 budget, which proposed scrapping the federal government's 28-year-old immigrant investor program. The budget was delivered to parliament for approval on the same day.

"Our business will definitely be negatively impacted. And we have been trying to calm our clients down and introduce possible new options since early last week," Hao Xin, a Beijing-based immigration consultant, told the Global Times Tuesday.

Although the federal program will most likely be terminated, people can still apply for the investor immigration program in the eastern Canadian province of Quebec, and entrepreneurs can apply to the Provincial Nominee Program in provinces including British Columbia and New Brunswick, Sarah Zhao, a department manager at a Shanghai-based immigration consultancy, told the Global Times.

As some immigration consultancies are struggling with a weak cash flow, they are trying their best to convince their clients to switch to other immigration programs in the US and Europe in order to maintain their commission fees.

'A real shock'

Hao's firm, which helps clients to select immigrant programs and submits their materials to the case processing centers and centralized intake office of the Canadian government for processing, has been in business for nearly two decades.

"The Canadian government changed the threshold for investor immigrants several times, but this one might be the toughest," he said. "It was a real shock to us and our clients."

Unlike most other consultancies, which offer immigration services to Canada, the US and Europe, Hao's company only deals with clients who want to move to Canada. "So our company is definitely heavily influenced," he said.

Before the proposed change, Canada granted permanent residency to those who had personal wealth of at least C$1.6 million ($1.46 million) and would commit C$800,000 to a five-year free-interest loan to one of the country's provinces.

The country's 2014 budget said that the investor immigration program had failed to provide Canada with the expected amount of economic benefit.

"For decades, it has significantly undervalued Canadian permanent residence, providing a pathway to Canadian citizenship in exchange for a guaranteed loan that is significantly less than our peer countries require," the budget said.

"There is also little evidence that immigrant investors as a class are maintaining ties to Canada or making a positive economic contribution to the country," it said.

Hao declined to comment on how many clients his company has lost due to the change, but said he is trying to introduce other immigration opportunities in Canada, such as the provincial policy for entrepreneurs.

Canada has always been the top choice for Chinese millionaires, thanks partly to its relaxed immigration policy. Between December 2012 and October 2013, around 16,000 people from the Chinese mainland applied for investor visas to Canada, according to the annual blue book on Chinese international immigration, released last month by the Center for China & Globalization, Beijing-based independent, nonprofit think tank.

The Canadian government may return the application materials and fees to some 59,000 Chinese nationals who have been in the queue to get permanent residency for years, the National Business News Daily reported Friday.

Counting on Quebec

Consultancies contacted by the Global Times said that they are counting on Quebec to maintain their investor immigrant business.

Zhao said that the federal government's potential cancellation of the investor immigration program will not affect the policy in Quebec.

"The federal government and Quebec have two parallel programs," Zhao said. "Quebec should start accepting new applications this August, if it does not follow the Canadian federal government's lead in closing the program."

Quebec, which caps the number of its investor immigrants at 1,750 annually, limits the maximum number of immigrants from one country at 1,200 each year.

"The program in Quebec will definitely remain open," noted Hao, adding that his firm had contacted immigration officials in Quebec as soon as the federal government's budget came out.

"The federal government scrapped the program because they failed to use the investors' loans effectively," Hao said. "Quebec has a unit in its immigration department that specializes in using the loans, so the province did and will utilize the funds well. So it will keep the program."

However, Zhang Yaohui, an independent expert in the immigration industry, told the Global Times Monday that Quebec's program will definitely be influenced by the federal government's decision.

"If Quebec's program is canceled as well, many immigration agencies will suffer a fatal blow," Zhang said.

More options

Most consultancies contacted by the Global Times said that they have been trying to convince their clients to move to other countries.

Yang Yixiao, a consultant at another Beijing-based immigration service provider, told the Global Times Monday that most of the company's clients who had planned to move to Canada are now considering the US and Portugal.

"One-third of our clients are hesitating and thinking about other immigration plans in Canada; one-third are considering investing in the US, and the rest decided to gain Portuguese permanent residency by buying a property," she said.

Zhang said the number of immigration applications to the US, Europe and Australia will soar after Canada cancels its program, since most of the applicants are determined to move abroad.

Both Yang and Zhang said Portugal will be the next hot destination because of the low price and less complicated procedures to get permanent residency there.

Portugal now grants "Golden Resident Permits" to non-EU citizens who purchase a property for at least 500,000 euros ($685,965), make a capital transfer of 1 million euros or create at least 10 jobs.

"Very few of our Canada clients asked for a refund, and many are now interested in Portugal," Yang said.