Federal Court backs Canada’s right to mass-freeze Start-Up Visa applications if a designated organization is suspended

The Federal Court of Canada dismissed a lawsuit brought by an applicant under the Start-Up Visa (SUV) program, who sought to compel Immigration, Refugees and Citizenship Canada (IRCC) to complete the processing of his application for permanent residence. The Court held that once the Minister suspends the status of a designated organization, the government has no continuing legal obligation to process the related cases.

The decision in Zheng v. Canada (Citizenship and Immigration), 2026 FC 245, issued February 20, 2026, was the first in Canadian case law to interpret the suspension mechanism set out in subsection 98.03(4) of the Immigration and Refugee Protection Regulations (IRPR).

Key takeaway: the Court will not intervene to overturn the freeze where the regulatory trigger has been met and the organization issuing SUV documents has lost the ability to make binding commitments.

What role does a designated organization play in Start-Up Visa?

The dispute centered on Manitoba Technology Accelerator (MTA), a Winnipeg-based business incubator that operated as a non-profit and was recognized as a designated entity under the SUV program.

These organizations assess business proposals from foreign entrepreneurs and issue Commitment Certificates. Those certificates are what IRCC relies on as a preliminary basis for further consideration of an applicant’s permanent residence application under the SUV stream.

In March 2025, MTA rebranded as Manitoba Innovates. However, the legal issue was not the brand—it was the organization’s status as a designated entity.

In December 2025, the Minister suspended MTA’s designation and froze all applications that relied on commitment certificates issued by that entity. Zheng confirmed that there is no viable court route to undo such a freeze once the regulatory basis is triggered.

An application waiting in the queue for nearly five years

Li Fu Zheng applied for permanent residence under the SUV in February 2021. His file included a Commitment Certificate issued by MTA (at the time, under the legal name Biomedical Commercialization Canada Inc.).

By July 2023, he had cleared major milestones: a requirements eligibility check, a medical assessment, and a criminality screening.

After that, the security process kicked in. A request for checks was sent to the Canadian Security Intelligence Service (CSIS) in August 2023, and CSIS’s advice was provided on October 1, 2025. In practice, Zheng had been close to the finish line—after nearly 46 months.

What “freeze” means for SUV applications

On December 19, 2025, the Minister applied paragraph 98.03(4)(a) IRPR and suspended MTA’s ability to make commitments.

At the same time, paragraph 98.03(4)(b) came into play: IRCC must not process SUV permanent residence applications that are connected to commitment certificates made by the suspended organization. The only exception is an extension of a work permit for applicants who are in Canada.

The freeze was set for nine months, running until September 19, 2026.

IRCC notified Zheng on January 12, 2026. The department did not disclose the reasons for suspending MTA. Still, the legal trigger in subparagraph 98.03(3) implies grounds to suspect that the organization either failed to meet program conditions or provided inaccurate or misleading information.

Importantly, Zheng had already filed for mandamus (a court order compelling a decision-maker to act) back in January 2025—before the freeze was introduced. However, by the time of the hearing on February 9, 2026, the legal landscape had already changed.

Court: IRCC has no ongoing duty, and “the certificate was already issued” doesn’t help

Justice Turley concluded that the freeze removed the first element of the mandamus test—the existence of a public legal duty to make a decision on the matter. As a result, the Court did not examine the remaining requirements.

Zheng argued that paragraph 98.03(4)(b) should not apply to his situation because:

1) MTA had already issued his Commitment Certificate;
2) IRCC had already confirmed his basic eligibility.

The Court rejected that interpretation. In the Court’s view, the provision allows the Minister not to consider applications that are “related to commitments made by a suspended organization.” The wording, the Court emphasized, covers cases where a certificate exists but the final decision on the application has not yet been made.

Zheng also argued that CSIS had already completed its part of the security assessment. The Court distinguished between CSIS consultations being completed and the overall security process being fully finalized. For permanent residence cases, CSIS provides recommendations to the Canada Border Services Agency (CBSA), and then both assessments (CSIS and CBSA) are sent to IRCC for the final decision.

The Court found no evidence that, by the time of the hearing, CBSA had completed the step of transmitting that package.

In addition, Justice Turley relied on Niu v. Canada (Citizenship and Immigration), 2018 FC 520: when assessing entitlement to mandamus, the Court looks at whether the grounds exist at the time of the hearing, not at the time the application was filed.

Bottom line: although the freeze was introduced after the court process began, its effect was to effectively remove the applicant’s access to judicial relief.

First decision on suspending the status of a designated entity

Before Zheng, there were no Federal Court decisions that directly interpreted the Minister’s authority under subsection 98.03(4) IRPR. To fill the gap, the Court drew an analogy to section 13.1 of the Citizenship Act, which allows the Minister to suspend processing of a citizenship application while an admissibility screening is underway.

Courts had previously repeatedly stated that a reasonable pause under that provision removes the duty to complete the file.

The analogy is helpful, but not perfect. Under the Citizenship Act, the pause can continue “for as long as is necessary,” without a strict hard limit. Under the IRPR, however, the window is capped at nine months (per subsection 98.03(5)).

When the period ends (or if the issue is resolved sooner), it is reasonable to expect that the processing obligation may resume—but the precise outcome depends on what IRCC decides next.

Empowered Startups president and general counsel Christopher Lennon assessed the impact for applicants as follows: in substance, the ruling confirmed what IRCC had already said when it announced MTA’s suspension. In practice, he noted, this can mean many files may never reach a positive decision unless they are refused or removed from the queue for other reasons.

What happens after September 19, 2026

MTA’s freeze is scheduled to last until September 19, 2026, unless the situation is “resolved” earlier, in accordance with subsection 98.03(5) IRPR. The next steps remain uncertain.

If IRCC lifts the freeze and resumes processing, the applications return to the queue. Meanwhile, immigration level plans for 2026–2028 reportedly include only about 500 SUV admissions per year (a possible range of 250 to 1,000).

If IRCC instead proceeds with refusals (which is permitted by the regulations), files could fall out of the overall waiting pool—which is estimated at roughly 43,200 cases—without being considered on their merits.

No clear signals have been provided about the government’s chosen approach. In January, IRCC told affected applicants that processing would resume after the freeze ends, provided standard procedures are followed and available quotas are respected. That wording leaves room for different interpretations.

The Zheng decision does not mandate a particular outcome. But it definitively closes the court route for applicants whose designated entities face a suspension of their authority.

For applicants who hold an MTA Commitment Certificate, the practical options narrow to waiting, pursuing alternative pathways to permanent residence in Canada, or combining both strategies.

How many applicants are affected is unclear: IRCC has not disclosed how many SUV files are tied to MTA. When that number becomes public, it will be possible to determine whether Zheng is just an isolated episode or part of a broader scenario for SUV cases in Canada.

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