Surprising Insights Into Canada’s Start-Up Visa (SUV) Program

Not only that, but we’re now able to compare those numbers across time and get insights about trends and the impact of larger events, like the COVID pandemic. This long-term perspective allows for an assessment of the growth of the SUV program and a granular examination of things like participation rates for entrepreneurs from individual countries.

We hope you find this information as interesting and useful as we do, particularly in light of recent news regarding changes in Canada’s SUV program.

(You can read the full story at the link provided above, but it’s important to note that much of what follows will be affected by a decision made by IRCC in April of 2024 to drastically reduce the number of participants in the SUV program, which may now be limited to fewer than one thousand a year. The purpose of this significant change is to help IRCC process a massive backlog of applications that has accumulated over the past several years. Because of this change, our ability to forecast future developments in the SUV program based on the statistics we examine here is severely limited.)

Here’s a look at some of the more interesting highlights provided by the IRCC statistics.

Anytime you see a graph like this, you immediately know that something triggered huge changes.

In this case, it’s difficult to come to any other conclusion apart from believing that the COVID pandemic caused the incredible spike in the number of permanent residence applications filed under the SUV program. It’s true that there was steady growth before 2020, but nothing like the nearly 400% increase from 2019.

No doubt there was a range of more precise motivations behind all those applications, but we have to assume they were mostly associated with the economic dislocation caused by the pandemic. Did Canada become a more attractive option because of its stability? Were more entrepreneurs motivated to start something new because they were suddenly unemployed? Did awareness of the SUV program suddenly increase as a result of the need to investigate new options?

We can speculate on exactly why it happened, but there’s no question that there was a huge increase in applications to the SUV program during the COVID-19 pandemic. It was so huge, in fact, that it caused a massive backlog that the government cited in April 2024 as a reason to introduce drastic changes to the program.

Takeaway: The massive increase in applications during COVID exposed the practical limitations of the SUV program and its ability to process applications in a timely manner while maintaining the standards expected by the government. 

Let’s stay on the topic of Permanent Residence but switch from applications submitted to approval rates. Here’s a graph of approval rates from 2014 to 2023. It’s important to note these numbers only represent cases that were fully processed and adjudicated in that year, not all applications received that year:

Green represents the approved cases, red represents the refused cases, and gray represents the cases withdrawn during the process. Notice how, in its first year, approvals and refusals in the SUV program were roughly 50-50, but then the refusal rate dropped to 15% in its second year and less than one percent in its third year. 

What could explain such wild variations? Did the quality of the applicants change that much? Were there political considerations about increasing the number of approvals? We can’t be sure but the refusal rate continued to fluctuate quite a bit, doubling one year and then halving the next, until becoming somewhat stable from 2021.

Takeaway: Since reasons are not given to explain approval and refusal rates, it’s difficult to identify the factors at work here. Still, with approval rates averaging around 80% in recent years, applicants with strong cases can be confident about getting approved.

Given their size and active tech communities, it’s easy to assume that China and India are the top two sources of applicants to the SUV program. India is, in fact, in the top two, but it is a distant second place to a country that most would not guess. China comes in a surprising fourth place. Here are the stats for where SUV applicants come from:

You’re not alone if you didn’t guess Iran was the leader in applications to the SUV program. What’s surprising is not just Iran’s place at the top, but the margin that separates it from India in second place — nearly double the number of applications.

The top five is full of surprises, with Vietnam in third place and tiny Hong Kong just barely behind all of mainland China.

This unexpected ranking invites many questions about how it happened. Do Chinese and Indian start-up leaders have a preference for American or European partners? Or perhaps their own home-grown start-up communities are strong enough to meet the needs of domestic entrepreneurs?

What is it about Iran, Vietnam and Hong Kong that places them way above where you might expect them to be on the list? As with other aspects of the numbers released by IRCC, the data can produce more questions than answers.

For this particular aspect of the SUV program, political considerations and the level of awareness of the program certainly play a role. It seems clear that, somehow, awareness of the SUV program in Iran, for example, was much higher than would normally be expected, resulting in over-participation among applicants.

Takeaway: The size of a country is only one factor influencing its participation in the SUV program and doesn’t have the impact that you might expect. Other factors like awareness of the program and political considerations appear to be more influential. 

Due to the often highly technical nature of the businesses that apply for an SUV, the Canadian government wisely decided to include a role for third parties in the process, so-called Designated Organizations (DOs). They exist privately outside the SUV program as angel investors, venture capital funds or business incubators.

The role of DOs is to help the government select the SUV applications with the most potential by evaluating the ideas, technology and talent that applicants bring. The numbers tell us that the three different types of DO participate at very different rates:

Business incubators account for more than 75% of all SUV participants, and venture capital funds are connected to under 5%, with angel investors at around 20%.

At first glance, the numbers may seem way out of proportion but on reflection they make sense when you consider what each of them brings to the table.

Business incubators offer mentorship and an emphasis on the development of an idea over time. Turning potential into a profitable enterprise is the goal, but their approach is right there in their name — they are willing to nurture projects and mentor entrepreneurs, and that is why SUV applicants are more likely to target relationships with business incubators. Also, business incubators are typically built to accommodate more projects at once, so if you look at it from that perspective, the numbers shouldn’t be so surprising.

Angel investors and venture capital funds, on the other hand, are more interested in projects that are investable now. This necessarily means that the majority of SUV applicants will not be ready for them. This, plus their highly selective approach to providing financial backing, is the primary explanation for their relatively low participation.

Takeaway: The three types of Designated Organizations provide a good fit for different types of SUV program participants. Since the majority of projects in the SUV program are still in need of development, it makes sense that business incubators would play a much larger role than angel investors or venture capital funds, which are more oriented toward projects that are ready for investment.  

What is the typical educational level of applicants to the SUV program? Many would assume it skews higher toward people with some kind of advanced formal education, especially in tech. These are the real numbers according to IRCC:

Surprised again? The largest single group of applicants has a secondary education or less, and those with advanced degrees make up less than 25% of applicants. Altogether, those with a Bachelor’s degree or less comprise more than 50% of all applicants.

But here’s where it gets even more interesting. Those numbers are just for those who apply to the program. What about what happens to their applications? Would you guess that those with higher levels of education had higher approval rates? That might make logical sense, but be prepared for another surprise:

The data tells us that those with a secondary education or less —  the largest single group of applicants — have a lower refusal rate than applicants with Master’s Degrees and much lower than those with Doctoral degrees. In fact, those with Doctoral degrees have the highest rate of refusal for any single group based on education.

This would appear to clearly illustrate the difference between academic achievement and the skillset needed to succeed as a tech entrepreneur. There may sometimes be some overlap between the two, but it seems that certain talents are more useful in this arena than academic degrees.

Takeaway: The correlation between educational attainment and success in gaining entry to the SUV program is weak at best and appears to be slightly negative. The applicant’s idea, preparation, skills, business concept and willingness to learn from others seem to count for much more than a university degree.

As noted earlier, some information for the analysis above was taken from a webinar hosted by Joorney on the topic of the data released by IRCC. The guest for the webinar, Mary Yazdani, is active in the startup community in Ontario and is familiar with the SUV program as an immigrant herself.

For a deeper dive into the story behind the numbers, watch the webinar and get even more insights and commentary from both our guest and Marianella Manzur, Joorney Partner and Global Director of Sales and Marketing.

If you have any questions about the SUV program, reach out to our team at Joorney Canada anytime!