Start-Up Visa: Strategies to Help Clients Through Refusals and Appeals 

In today’s uncertain immigration landscape, entrepreneurs seeking to immigrate to Canada through business pathways are facing unprecedented challenges. Our recent webinar, “Start-Up Visa: Strategies to Help Clients Through Refusals and Appeals,” brought together immigration lawyers Pantea Jafari and Zeynab Ziaie Moayyed to discuss the current state of Canadian business immigration programs, with a particular focus on the troubled Start-up Visa (SUV) program. 

You can watch the entire discussion or read the summary below. 

The Current Business Immigration Landscape: Limited Options 

The Canadian business immigration system is currently in crisis, with severely limited options available to entrepreneurs and business professionals: 

“Unfortunately, there are only two programs federally present: the Self-Employed program, which is on pause, and the Start-up Visa program, which is rife with problems of all kinds,” explained Pantea Jafari during our discussion. 

This narrowing of pathways has damaged Canada’s reputation and is causing the country to lose valuable business talent. As Zeynab Ziaie Moayyed pointed out, “Some of the other pathways that applicants were trying to use in terms of work permits that would eventually lead to permanent residency are effectively not workable anymore with the removal of the job offer points.” 

With Provincial Nominee Program (PNP) quotas being cut, the Start-up Visa remains one of the few business pathways available, yet it faces significant challenges of its own. 

The Start-up Visa Program: A Well-Intentioned Program Gone Awry 

The Start-up Visa program has followed a trajectory similar to the Self-Employed program. Initially designed as a small, focused initiative for tech innovators and young entrepreneurs—”think Shopify and Facebook, not small businesses,” as Zeynab explained—it saw a sudden surge in popularity without proper management controls or caps. 

“The minimal requirements that were put in place back in 2012, 2013, envisioned a very small, very specific program focused on tech innovators, young people,” Zeynab noted. “The vision was right at the beginning, and the problem we faced over the years is that because we don’t have other business pathways, this program has become oversubscribed.” 

This fundamental misalignment between the program’s original design and its current implementation has created serious issues. IRCC officers are now scrutinizing business decisions despite not being “well fit, equipped, or trained to make business decisions”—contradicting the program’s fundamental design, where designated organizations, not IRCC, were supposed to evaluate business potential. 

The Rise of “Excuse-Based Refusals” 

According to Pantea, what we’re seeing now are “excuse-based refusals” where Immigration, Refugees and Citizenship Canada (IRCC) is changing policies and standards without clear announcements. Both lawyers identified several troubling patterns in recent refusals: 

1. Retrospective application of new requirements: Requirements introduced in 2024 are being applied to applications submitted years earlier. 
2. Team composition changes: Previously accepted changes to team members’ roles (essential vs. non-essential) are now grounds for refusal. One example involves changes to group compositions in Start-up Visa applications. Previously, if business realities required changes to team compositions after submitting the initial commitment certificate, these changes were accepted and processed without issue. Now, these same changes are being used as grounds for refusal. 
3. Missing commitment certificates: IRCC is claiming they didn’t receive commitment certificates directly from designated entities, even for applications submitted years ago. 
4. Insufficient progress allegations: With no clear metrics established by IRCC on what constitutes “sufficient progress,” officers are subjectively determining that businesses haven’t progressed enough and labelling transactions as “artificial.” 

“This is highly unfair,” Zeynab emphasized. “It’s one of those excuses where they’re going back completely subjectively and saying, ‘We are not convinced that you have made sufficient progress.'” 

The Processing Time Crisis 

Even more concerning is what has been discovered through access to information requests. Internal IRCC communications reveal processing times of up to six years for the current inventory, while the publicly stated time is only 40 months. Meanwhile, the program continues to accept new applications and collect processing fees. 

The crisis has been exacerbated by the introduction of priority processing in 2024 for applicants with support from angel investors or venture capital firms, as well as from select designated incubators. Applications not in the priority stream are now facing even longer processing times. 

Zeynab shared a troubling finding from examining GCMS (Global Case Management System) notes: “I’ve seen the GCMS notes on the inside, and it specifically said, ‘This application is not a priority application. It will be processed after all the priority applications have been processed.'”. 

With a reduced quota of only 1,000 applications to be processed annually, compared to a backlog of over 30,000, this means years of waiting for non-priority applications. 

Legal Options for Refused Applicants 

For those who have already received refusals, litigation is often the only recourse. Pantea discussed an ongoing group litigation initiative for refused Start-up Visa PR applicants, which currently includes four main categories of “excuse-based” refusals: 

1. Changes to group composition that were not accepted 
2. Allegations that commitment certificates were not received from designated organizations 
3. Administrative errors in retainer agreements suggesting payment for support 
4. Humanitarian submissions that are not being considered 

A second group litigation being prepared is a mandamus litigation (legal action to compel the government to fulfill its duties) with several subgroups: 

1. Applicants who have been approved for everything but are waiting for passport issuance 
2. Those who have passed eligibility but are waiting endlessly for security clearance 
3. Applicants affected by the prioritization system are now pushed to the end of the line 

The advantage of group litigation over individual judicial reviews is the ability to demonstrate systemic issues. As Pantea explained, “When a decision is looked at in the context of one officer’s use of discretion, it could readily be deemed reasonable… It’s only when you look at that one decision in the context of the hundreds and thousands in that processing inventory that you really understand the systemic problems.” 

She also highlighted potentially more impactful approaches, such as suing the government directly: “Actions such as suing the government are where you’re allowed very significant cost consequences. And that’s where I think is truly the place where you can make a dent enough to cause a change of behaviour.” 

The Work Permit Dilemma 

An interesting dilemma faced by many applicants is whether to apply for a work permit while awaiting permanent residency processing. As Pantea noted, “Clients always come up against this on the issue of whether to get a work permit or not.” 

This creates a catch-22 situation. On the one hand, not actively working on your business in Canada might be interpreted as a lack of genuine interest. On the other hand, fully committing to a venture that might fail during the lengthy processing time creates significant risk for entrepreneurs. 

Pantea and Zeynab advised that whatever decision applicants make regarding work permits, they must be prepared to defend that choice based on their specific business needs and the initial business plan they submitted. 

Keys to Success: Documentation and Commitment 

One of the most crucial pieces of advice for applicants is to document everything. “They have to have systems in place for documenting what they’re doing,” Zeynab explained. This ties directly to the business plan – what milestones were promised, and what evidence exists to show progress toward those goals? 

When applicants receive a Procedural Fairness Letter, they typically have about 30 days to respond. This is not the time to begin gathering documentation. As Zeynab warns, “It is way too late if you get that request letter and you start to put documents together… You just will not be able to do a good job, and you can’t show that depth of work over two, three years.” 

For anyone considering the program, the message is clear: “You should only do this if you are actually going to commit to it. And for anybody who’s already in the process, they should be fully committed to it.” 

What to Expect Going Forward 

Pantea and Zeynab predict that parts of the Start-up Visa program may eventually be paused, particularly the incubation level stream. Pantea suggests this is because “what they’re looking for is more seemingly ventures that’ll be up and running right away, that will immediately infuse the funds into the Canadian economy rather than the incubation level ventures.” 

However, Zeynab expressed cautious optimism about the potential for positive changes, noting that recent discussions about investor visas in the U.S. might prompt Canada to reconsider more robust economic and business immigration programs. 

When asked what single change could reduce widespread rejections, transparency emerged as the key factor. “The biggest thing is transparency and having a clear understanding of what the expectation is,” Zeynab stated. “There are certainly expectations that officers have when they’re reviewing these applications that are not communicated in the guidelines, in the regulations.” 

Conclusion: Moving Forward in a Challenging Environment 

“It is still an uphill battle, unfortunately. I think we have to be very realistic about that,” stated Zeynab when asked about the impact of ongoing legal efforts. While litigation may help by putting IRCC on notice to be more careful in their decision-making, she cautions that this is a double-edged sword: “It might prevent these specific refusals, but it doesn’t prevent them from coming up with new excuses.” 

For Canada to truly benefit from entrepreneurial talent, a broader range of immigration programs for business people is needed, including the revival of investor and entrepreneur streams with better oversight. 

For applicants currently in the queue or considering applying, the advice is to be fully informed about the challenges. “You can responsibly still pull people into this program if you tell them what the problems are… But don’t blindside them,” Pantea advised. 

She also encouraged applicants and their representatives to share their experiences and evidence, even if they don’t want to join litigations. This shared information has proven crucial in previous successful group litigation efforts by demonstrating systemic issues. 

Until more comprehensive reforms are implemented, those pursuing the Start-up Visa path must enter with their eyes wide open to both the opportunities and obstacles that lie ahead.