May 2, 2024

The Way Forward for Designated Organisations

DG View on changes under the Canada Startup Visa

With one-third of Canadian businesses being immigrant-owned, the OECD ranked Canada as the top destination for start-up founders in 2023. With the encouraging facts, while Canada relies heavily on immigrants to fuel its entrepreneurial sector, the current system has struggled with processing times, leading to the immigration backlogs.

Aiming to reduce the application backlogs, Canada’s Immigration Minister, Marc Miller, has announced adjustments to federal business immigration programs, effective April 30, 2024.

As per the policy change, a cap is placed on yearly applications, limiting each Designated Organisation* to supporting a maximum of 10 start-ups seeking permanent residency under the Canada Start-up Visa Program (SUV). Further, premium processing will be offered to entrepreneurs with backing from Canadian capital or business incubators within the Canadian Tech Network.

Since there are 82 of such Designated Organisations as part of the SUV program, as per the new change now a maximum of 820 applications will be accepted by the IRCC annually.

Our View

By limiting application intake and prioritising specific applicants, IRCC aims to streamline processing and reduce wait times. However, this decision remains debatable for the Canadian authorities since the SUV programme is one of the successful routes introduced by Canada to attract foreign talent, innovation, foreign investments and create a robust economy for the development and nurturing of business ideas.
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A further edge in the start-up game that Canada has is that the US does not have a start-up visa program or a similar immigration route which can harness the growth of start-ups or help founders set up base in the North American market.
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Although US is an attractive destination for foreign founders, Canada’s Start-up Visa programme, particularly racked attention due to its ease of business set up, limited compliances and one of the fastest pathways to gaining permanent residency in North America.

Way forward for Designated Organisations:

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  1. Create Acceleration/funding programs for scale ups/medium scale companies
  2. Explore other immigration routes such as ICT as are more apt for scale ups.
  3. For the start-up category- look for acceleration program independent of immigration
  4. Look for partnership with other Designated Organisations- which are not active, and are willing to share their quota.

While many of the Designated Organisations in Canada, focus solely on the SUV clients, it has now become imperative to look at entrepreneurs with a business acceleration need as is also independent of immigration. Due to lower set up cost, as compared to the USA, there are many tech companies looking to set up their operations in Canada.

Further, for the scale up category, the Designated Organisation may consider forming new acceleration/funding programs, as the founders of scale-ups still could use the Intra Company Transfer, and other immigration routes to shift to Canada.

While the changes are expected to halt the business opportunities for Designated Organisation, those with the problem solving outlook- would continue on gaining the business opportunities by pivoting and opening new gateways for them.

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