Immigration, Refugees and Citizenship Canada (IRCC) has assumed sole administration of the Startup Visa (SUV) program, ending its longstanding partnerships with the National Angel Capital Organization (NACO) and the Canadian Venture Capital and Private Equity Association (CVCA). This decision follows a significant policy update in April 2024, where the government introduced a cap on permanent residence applications, limiting each designated organization to no more than ten startups, in an effort to address the growing backlog of applications.

Termination of NACO and CVCA Contracts

IRCC has opted not to renew its contracts with NACO and CVCA, who previously managed the SUV’s three streams by designating venture capital firms, angel investor groups, and incubators or accelerators across Canada. This move signals a shift in the administration of the SUV program, with IRCC now directly overseeing these responsibilities.

Impact on Processing and Due Diligence

According to Slava Apel, CEO of Startup Visa Services, many designated organizations welcomed the news of the dual reporting system to NACO/CVCA and IRCC being dismantled. Apel notes that IRCC agents had already started deviating from the original intent of the program, which initially involved NACO conducting peer reviews to ensure the due diligence of incubators.

Apel attributes the changes in the program to a lack of oversight by the supervising organizations over designated entities’ due diligence processes. He highlights that NACO and CVCA failed to revoke the designation status from “rogue” or “bad apple” incubators, angel investors, or venture capital groups, which resulted in a surge of applications and a backlog of over 16,000 cases.

Challenges and Future of the SUV Program

As IRCC seeks to address ongoing challenges in the program, the decision not to renew contracts with NACO and CVCA aligns with their strategy to streamline the application process. Chris Lennon, President & General Counsel of Empowered Startups, suggests that Canada is unlikely to add any new designated entities to the SUV program in the near future. He believes that IRCC’s focus is on reducing the overall volume of applications by limiting the number of designated entities.

Apel anticipates that these changes will lead to faster processing times and more stringent scrutiny of applications. He advises applicants to submit well-structured business proposals and demonstrate clear business progress to minimize the need for additional due diligence.

Conclusion and Future Prospects

The end of peer reviews does not eliminate the need for designated entities to justify their due diligence processes. However, these discussions will now take place directly with IRCC officials rather than representatives. Lennon assures that legitimate SUV applicants should not be concerned by these changes unless they were relying on perceived “cozy relationships” with industry associations.

As IRCC continues its review of the SUV program, the future of its administration remains uncertain. If IRCC decides a new contract is necessary, a tender will be posted on CanadaBuys. In the meantime, at least ten organizations are no longer listed as designated entities for the SUV, according to a recent comparison between the current federal government’s list and an archived version from earlier this year.

According to: imidaily

Prime Properties’ Perspective on the IRCC’s Decision to Take Full Control of the Startup Visa Program

At Prime Properties, we believe that the recent decision by Immigration, Refugees and Citizenship Canada (IRCC) to assume full control of the Startup Visa (SUV) program aligns with the broader goal of streamlining processes and improving efficiency. As a company that places a high value on facilitating decision-making and ensuring the successful issuance of necessary documents through government channels, we see this move as a positive step toward reducing administrative redundancies and enhancing the clarity of procedures.

The elimination of dual reporting to external organizations like NACO and CVCA can potentially lead to faster processing times and more direct communication between applicants and IRCC. This aligns with our own approach at Prime Properties, where we prioritize clear and effective communication with government agencies to ensure our clients achieve the best outcomes.

However, this change also underscores the importance of thorough preparation and due diligence in all applications. As IRCC takes on full responsibility, it is crucial for businesses and investors to present well-structured proposals and demonstrate clear progress, much like the rigorous standards we apply when assisting our clients in navigating complex regulatory environments.