Canada: Doing Business In Canada 2017


This guide provides a practical overview of Canada's legal landscape to international businesses looking to establish operations in Canada or considering an investment in a Canadian business.

As an independent Canadian firm with a strong national platform, BLG's international clients benefit from our comprehensive industry knowledge and insights into what it takes to do business today in Canada. BLG provides business law, dispute resolution and intellectual property solutions to a wide range of clients internationally in virtually every area of law across all business sectors.

BLG has acted in international banking transactions; international insolvencies, liquidations and restructurings; international joint ventures, reorganizations and acquisitions; commercial contracts; and international and multi-jurisdictional disputes. A business relationship with BLG gives you access to a wealth of cross-border experience and legal expertise.

The Canadian Legal System

Canada's legal system owes its origin to two of the world's major legal traditions: English common law, applied in nine provinces and three territories; and French civil law, applied in the Province of Québec. Constitutionally, Canada is a federal state, in which some powers are assigned to the federal government and others to the provincial and territorial governments.

For most businesses, provincial laws have a greater impact than federal laws, since the provincial governments have power over "property and civil rights", which includes contract law, labour relations, occupational health and safety, consumer protection, real estate transactions, land use, municipal law (municipalities derive their powers from provincial statutes), securities law and regulation of professionals.

So far as businesses are concerned, federal jurisdiction is more narrowly focused, on particular kinds of business (for example, banks and most other financial institutions, airlines, railways, broadcasters, and telecom companies), particular kinds of property (for example, patents, trademarks and other intellectual property), particular kinds of behaviour (such as crime and anti-competitive practices), or matters of national significance (such as immigration, customs and monetary policy).

In some cases, an aspect of a business may be subject to either federal or provincial regulation. An employer's relations with employees are generally governed by provincial labour and employment laws, but if the business is a bank, railway, airline or other "federal" business, those relations are governed by a federal labour code. In other cases, different aspects of the business may be regulated at different levels: for example, all major insurance companies are federally chartered, and their governance and prudential practices are subject to the oversight of the federal Superintendent of Financial Institutions, but their marketing, policies and relations with policyholders are subject to provincial insurance laws. In a few cases, there is duplication: for example, there are both federal and provincial environmental regulations.

This "division of powers" is further complicated by a number of arrangements in which a province may "opt out" of a federal program (for example, Québec administers its own provincial pension plan, separate from the Canada Pension Plan), or the federal government may recognize a provincial regime as being an acceptable substitute for the federal regime in the same area: for example, in Québec, Alberta and British Columbia, businesses only need to comply with provincial privacy law.

Both levels of government impose personal and corporate income taxes and transaction taxes, though in many cases there are administrative arrangements under which the federal government administers both taxes: for example, except in Québec, payroll deductions for employment insurance, government pensions and income tax are paid only to the federal government, but are credited to the employee's tax obligations at both levels; similarly, in all provinces except Alberta and Québec, the provincial corporate tax is collected by the federal government under a single tax return.

Unlike many other federal states, however, the Canadian judicial system is mostly unitary. There is a specialized Federal Court (including both trial and appellate levels), which has jurisdiction over specific areas such as immigration, citizenship, appeals from federal administrative tribunals, actions against the federal Crown, tax, intellectual property and navigation and shipping (and maritime law generally), but virtually all other litigation is brought in a provincial superior court, from which there is an appeal to a provincial court of appeal. The Supreme Court of Canada hears appeals from both the federal and provincial courts of appeal.

Canada is receptive to foreign ideas and capital. Canadian courts often look to foreign judicial decisions for guidance, and both the federal and provincial legislatures frequently adopt foreign legislative models: for example, the Personal Property Security Act in force in the common law provinces is essentially the same as Article 9 of the U.S. Uniform Commercial Code. Because of this interest in international legal developments, many of Canada's laws and governmental policies reflect internationally accepted norms: for example, unlike the U.S., Canada has adopted the International Financial Reporting Standards for public companies and other "publicly accountable entities".

Nevertheless, there are legal considerations unique to doing business in Canada, for both domestic and foreign companies.

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