An old friend asked me about proof of funds for Express Entry applications. Her niece received an Invitation to apply under the Federal Skilled Worker Category. An agency in the Philippines is representing her niece in her application for permanent residence. The agency required her niece to provide $40,000 as proof of funds. She only has $20,000 and has real estate and small assets. The question is: Can she use her assets and real estate as proof of funds?
To answer her question, let us review the legislative (Immigration, Refugee and Protection Act) and regulatory (Immigration, Refugee and Protection Regulations) provisions that make proof of funds a requirement.

s.12 of the IRPA states that:
(2) A foreign national may be selected as a member of the economic class on the basis of their ability to become economically established in Canada.
Provisions in Part 6 of IRPR then create the different economic classes.

Federal Skilled Workers
The Federal Skilled Worker Class is created by s.75 of IRPR:
(1) For the purposes of subsection 12(2) of the Act, the federal skilled worker class is hereby prescribed as a class of persons who are skilled workers and who may become permanent residents on the basis of their ability to become economically established in Canada and who intend to reside in a province other than the Province of Quebec.

What does the ability to become economically established in Canada mean exactly? This is elaborated on in s.76 of IRPR:
(1) For the purpose of determining whether a skilled worker, as a member of the federal skilled worker class, will be able to become economically established in Canada, they must be assessed on the basis of the following criteria:
[…]
(b) the skilled worker must
(i) have in the form of transferable and available funds, unencumbered by debts or other obligations, an amount equal to one half of the minimum necessary income applicable in respect of the group of persons consisting of the skilled worker and their family members, or
(ii) be awarded points under paragraph 82(2)(a), (b) or (d) for arranged employment, as defined in subsection 82(1), in Canada [emphasis added].

To briefly summarize, a Federal Skilled Worker can demonstrate their ability to become economically established in Canada by showing proof of funds or by showing arranged employment. It is worth noting that arranged employment has a specific definition in IRPR (see s.82).

Federal Skilled Trades
The Federal Skilled Trade Class is created by s.87.2 of IRPR:
(2) For the purposes of subsection 12(2) of the Act, the federal skilled trades class is prescribed as a class of persons who are skilled trades workers and who may become permanent residents on the basis of their ability to become economically established in Canada in a skilled trade occupation and their intention to reside in a province other than the Province of Quebec [emphasis added].

In order to eligible for the Federal Skilled Trades class, a foreign national must also meet the following requirement in s.87.2:

(5) With the exception of the foreign nationals referred to in subparagraphs (3)(d)(ii), (iii) and (v) [which refer to foreign nationals with certain offers of employment], the foreign national must have, in the form of transferable and available funds, unencumbered by debts or other obligations, an amount equal to one half of the minimum necessary income applicable in respect of the group of persons consisting of the skilled trades worker and their family members [emphasis added].

Canadian Experience Class
The Canadian Experience Class is created by s.87.1 of IRPR:

(1) For the purposes of subsection 12(2) of the Act, the Canadian experience class is prescribed as a class of persons who may become permanent residents on the basis of their ability to become economically established in Canada, their experience in Canada, and their intention to reside in a province other than the Province of Quebec [emphasis added].

Even though the Canadian Experience Class contains the same requirement of demonstrating an ability to become economically established, it is not a requirement to demonstrate the availability of funds or an offer of employment, presumably because they are already economically established by virtue of having lived and worked in Canada.

Proof of Funds
The above regulatory provisions refer to “transferable and available funds, unencumbered by debts or other obligations”. On its face, this would appear to rule out the assets that you refer to in your question (e.g. real estate, shares, and valuable personal effects). Further guidance is provided by IRCC on its web page “Proof of funds – Skilled immigrants (Express Entry)”:[1]

Funds must be readily available to you. For example, you can’t use equity on real property as proof of settlement funds.

The funds must be available both when you apply and when (if) we issue you a permanent resident visa. You must prove to an immigration officer that you can legally access them to use to settle here when you arrive.
For proof, you must get official letters from any banks or financial institutions where you are keeping money
(2) A foreign national may be selected as a member of the economic class on the basis of their ability to become economically established in Canada [emphasis added].

Provisions in Part 6 of IRPR then create the different economic classes.

Federal Skilled Workers
The Federal Skilled Worker Class is created by s.75 of IRPR:

(1) For the purposes of subsection 12(2) of the Act, the federal skilled worker class is hereby prescribed as a class of persons who are skilled workers and who may become permanent residents on the basis of their ability to become economically established in Canada and who intend to reside in a province other than the Province of Quebec [emphasis added].

What does the ability to become economically established in Canada mean exactly? This is elaborated on in s.76 of IRPR:

(1) For the purpose of determining whether a skilled worker, as a member of the federal skilled worker class, will be able to become economically established in Canada, they must be assessed on the basis of the following criteria:
[…]
(b) the skilled worker must
(i) have in the form of transferable and available funds, unencumbered by debts or other obligations, an amount equal to one half of the minimum necessary income applicable in respect of the group of persons consisting of the skilled worker and their family members, or
(ii) be awarded points under paragraph 82(2)(a), (b) or (d) for arranged employment, as defined in subsection 82(1), in Canada [emphasis added].

To briefly summarize, a Federal Skilled Worker can demonstrate their ability to become economically established in Canada by showing proof of funds or by showing arranged employment. It is worth noting that arranged employment has a specific definition in IRPR (see s.82).

Federal Skilled Trades
The Federal Skilled Trade Class is created by s.87.2 of IRPR:
(2) For the purposes of subsection 12(2) of the Act, the federal skilled trades class is prescribed as a class of persons who are skilled trades workers and who may become permanent residents on the basis of their ability to become economically established in Canada in a skilled trade occupation and their intention to reside in a province other than the Province of Quebec [emphasis added].

In order to eligible for the Federal Skilled Trades class, a foreign national must also meet the following requirement in s.87.2:

(5) With the exception of the foreign nationals referred to in subparagraphs (3)(d)(ii), (iii) and (v) [which refer to foreign nationals with certain offers of employment], the foreign national must have, in the form of transferable and available funds, unencumbered by debts or other obligations, an amount equal to one half of the minimum necessary income applicable in respect of the group of persons consisting of the skilled trades worker and their family members [emphasis added].

Canadian Experience Class
The Canadian Experience Class is created by s.87.1 of IRPR:
(1) For the purposes of subsection 12(2) of the Act, the Canadian experience class is prescribed as a class of persons who may become permanent residents on the basis of their ability to become economically established in Canada, their experience in Canada, and their intention to reside in a province other than the Province of Quebec [emphasis added].

Even though the Canadian Experience Class contains the same requirement of demonstrating an ability to become economically established, it is not a requirement to demonstrate the availability of funds or an offer of employment, presumably because they are already economically established by virtue of having lived and worked in Canada.

Proof of Funds
The above regulatory provisions refer to “transferable and available funds, unencumbered by debts or other obligations”. On its face, this would appear to rule out the assets that you refer to in your question (e.g. real estate, shares, and valuable personal effects). Further guidance is provided by IRCC on its web page “Proof of funds – Skilled immigrants (Express Entry)”:[1]

Funds must be readily available to you. For example, you can’t use equity on real property as proof of settlement funds.

The funds must be available both when you apply and when (if) we issue you a permanent resident visa. You must prove to an immigration officer that you can legally access them to use to settle here when you arrive.

For proof, you must get official letters from any banks or financial institutions where you are keeping money.

If she is unable to produce $40,000, why not sell some of the assets or the real estate in order to come up with the $40,000 transferable and available funds. It is only then that she would be able to prove the amount that was indicated in her application.

If you have questions regarding the above article you may contact Marjorie at info@mcncanadaimmigration.com

Source: Immigration, Refugees and Citizenship Canada (IRCC), Immigration Refugee and Protection Act and Immigration Refugee Protection Regulations.

A word of caution: You should not act or rely on the information provided in this column. It is not legal advice. To ensure your interests are protected, retain or formally seek advice from an immigration lawyer or a Regulated Canadian Immigration Consultant in good standing of ICCRC. The views expressed in this article do not necessarily reflect those of the lawyers or immigration consultants.