Three categories of activity are excluded from the Entrepreneur Program and the Self-Employed Worker Program. Real estate is the one that needs the most attention: the wording covers trading, leasing, brokerage, development and land development. Any project drawing most of its revenue from a building deserves a review before filing.
What the sector exclusion covers
Three categories of activity are excluded from the Entrepreneur Program and the Self-Employed Worker Program. Real estate is the one that needs the most attention, because the wording is broad: it covers trading, leasing, brokerage, development or land development in the real estate field.
Any project drawing most of its revenue from a building therefore deserves a review before filing, whether it is a business start-up or a takeover.
The official list
The Ministry lists the same ineligible sectors in stream 2 Start a business and in stream 3 Business takeover. The same list applies to the Self-Employed Worker Program.
| Ineligible category | Activities covered by the wording |
|---|---|
| Lending and cheque cashing | Payday loans, cheque cashing or pawnbroking. |
| Sexually explicit products and services | Production, distribution or sale of pornographic or sexually explicit products, and services connected to the sex industry: nude or erotic dancing, escort services, erotic massage. |
| Real estate | Trading, leasing, brokerage, development or land development in the real estate field. |
The list comes from Schedule E to the Quebec Immigration Regulation, which section 49 refers to.
Reading every word of the real estate exclusion
Each word of the wording covers a distinct activity. A project that touches a building is assessed word by word.
| Wording | Activity covered |
|---|---|
| Trading | Buying and reselling buildings. |
| Leasing | Operating buildings to earn rent. |
| Brokerage | Acting as an intermediary in real estate transactions. |
| Development and land development | Promotion, subdivision and improvement of land or buildings. |
Real estate also raises separate questions for people who are not Canadian: see our piece on buying a home as a non-Canadian.
Looking at the actual activity
The company name or an activity code is not enough. The assessment looks at the activity actually carried on. We review the following in particular.
Revenue
The revenue breakdown in the financial statements.
We look in particular at the share coming from rent.
Assets and contracts
The company’s main assets and how they are used.
The contracts in force with its clients.
The business model
The model described in the business plan or the succession plan.
The declared activity
The activity declared on the enterprise register.
An inconsistency with the plan raises questions.
The economic activity code on the register
On the Quebec enterprise register, the economic activity code (CAE) is a four-digit code shown in the description of the statement of information. Each establishment declares its two main activities. The code serves statistical purposes, but an inconsistency with the plan raises questions.
If the code does not reflect the actual activity, it must be corrected through an updating declaration. Changing the code to hide a real estate activity would be a serious mistake: the Ministry may reject an application where false or misleading information is provided to it.
Self-employed workers
The same exclusion applies to the Self-Employed Worker Program. A real estate broker or a developer cannot base an application on that activity.
The program requires, among other things, at least two years of self-employed experience in your occupation during the five years preceding the application, outside an ineligible sector.
How MEKA AVOCAT works on this
We assess sector eligibility before any commitment. If the actual activity of the target business falls within an excluded sector, we say so before you spend money, rather than building a file that will not hold. Our work typically includes:
- Analysis of the actual activity of the target or planned business.
- The acquisition structure.
- Legal due diligence focused on rental revenue and secondary activities.
- Drafting the acquisition offer and the closing documents.
- Coordination with our CPA and tax partners to read the financial statements.
- Alignment with the specialized business succession organization and the broker, and review of the franchise agreement where applicable.
Texts and sources
This article draws on the Quebec Immigration Regulation, in particular Schedule E and section 49, on the condition pages for stream 2, stream 3 and the Self-Employed Worker Program published by Quebec’s immigration ministry, and on the Quebec enterprise register pages describing the statement of information and the economic activity codes.
Frequently asked questions
Is a renovation business caught by the exclusion?
A business that renovates for its clients sells a service. A business that buys, renovates and resells buildings is trading in real estate.
Does changing the activity code on the register solve the problem?
No. The assessment looks at the actual activity, and an inaccurate declaration exposes your application to rejection.
Is the list the same in stream 2 and stream 3?
Yes. The Ministry lists the same ineligible sectors in both streams, and the same list applies to the Self-Employed Worker Program.
Where is the list set out?
In Schedule E to the Quebec Immigration Regulation, which section 49 refers to.
Does your project touch real estate in any way?
Sector eligibility is settled before you sign an offer or file an application. A meeting lets us read the actual activity of the target business and tell you plainly whether the project holds.
Next: stream 3 Business takeover, the Self-Employed Worker Program and buying a home as a non-Canadian.
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Lawyer, member of the Barreau du Québec since 2014, founder of MEKA AVOCAT. This text sets out general legal information: it describes rules that apply broadly, not the answer to a particular case, and does not replace advice on your own situation.
