Prince Edward Island’s government has cancelled an immigration program for entrepreneurs following the discovery of widespread abuse and fraud.

“The program wasn’t meeting the expectations of Islanders, and it wasn’t meeting the expectations of government,” Economic Development Minister Chris Palmer said Wednesday morning.

Known as the “Entrepreneur Stream” of the Provincial Nominee Program, it allowed would-be entrepreneurs to gain Permanent Resident status in Canada, in exchange for financial deposits.

Applicants would provide the Island government with a $200,000 (Cdn) refundable deposit, and commit to invest $150,000 (Cdn) and manage a firm.

With the deal signed, the province would nominate the investor as a permanent resident and the immigrant usually received their permanent residency in the mail before even moving to the Island or setting up a business.

There were a flurry of complaints and two federal investigations followed.

Permanent residents are immigrants to Canada who are not Canadian citizens, but they have permission to stay and work in Canada for five years before applying for renewal.

As a permanent resident, they have most of the rights of citizens and can access social programs, but they can not vote, seek public office, obtain a Canadian passport or hold jobs that require a security clearance.

The Canada Border Services Agency (CBSA) alleged 462 applicants to Entrepreneur program, used the Charlottetown homes of two Chinese immigrants as ‘addresses of convenience.’

The province recognized that large numbers of immigrant entrepreneurs were not opening businesses.

“It undermines the integrity and objective of the (provincial) programs”

And it acknowledged that two-thirds of the PNP businesses in 2016-17, that was total of 177 people, did not get the refundable deposit back, with the majority simply never opening a business.

Lana Hicks, lead investigator for the CBSA, in a document, filed in June, said she suspected the immigrants didn’t come to the Island and settle, as they were required to by the provincial program.

Instead, she alleges, the immigration documents were picked up and sent to them, “at their real address elsewhere in Canada or back in China,” she wrote, according to Canadian Press.

“It undermines the integrity and objective of the (provincial) programs. That’s why Islanders and all Canadians should be concerned,” said Betsy Kane, a veteran immigration lawyer in Ottawa.

In Vancouver last year, Chinese immigrants were sentenced to jail and fined for immigration fraud involving 1,600 immigrants for fraudulently helping them obtain permanent residency by measures that “included creating the fictitious appearance of Canadian residency.”

The CBSA says that to date it can confirm 81 deportations from that case, with orders to remove 160 other people, with some appeals pending.

In Prince Edward Island, two international students from China have also alleged that businesses launched through the PNP demanded that they pay kickbacks on their wages.

James Aylward, leader of the P.E.I. Progressive Conservative party said the cancellation of the entrepreneur program is a “positive step.”

“We were a bit of a laughingstock within the immigration community,” he said. “People weren’t taking us seriously, they were just seeing us as an easy way through. The people that really want to immigrate to P.E.I., want to be part of our fabric, part of our community, I think it’s going to benefit us that way because the focus now will move to them and away from the greed and default deposits.”

Immigration lawyer Richard Kurland described it as “almost the last possible minute” to close the program, given the upcoming trial of the hoteliers.

“What will be revealed in the course of a public trial may well be embarrassing to the provincial government and may well shed doubt on the integrity of the Prince Edward Island immigration program. Rather than face that criticism at that time, the minister responsible is in a much better position being allowed to say, ‘Yeah we closed that program so you don’t have to ask us those questions anymore.'”

(With files from CBC and CP)