Establishing a
Business
in Ontario
The
Essential
Guide
Baker & McKenzie has provided sophisticated legal advice and
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organizations from more than 50 years.
Baker & McKenzie established its Toronto, Ontario office in 1962.
A key element of our practice is advising multinationals on the full
range of legal issues relating to their investment in Ontario and the
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Table of Contents
Get the Facts on Establishing a Business in Ontario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. Business Regulation Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Canadian Judicial System and Litigation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Foreign Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. Establishment of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7. Customs and International Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8. Employment Law and Labour Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9. Immigration Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10. Competition Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. Advertising and Labelling of Goods for Sale in Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12. Protection of Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13. Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14. Environmental Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15. Debtor-Creditor Law in Ontario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
16. Product Liability Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
17. Information Technology Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18. Government Services to Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Disclaimer
This booklet has been prepared as of November 1, 2006, as general information for business people interested in establishing their business in Ontario. The information contained in this
publication is of a general nature and should not be relied on as legal advice and should not be regarded as a substitute for detailed advice in individual cases. No responsibility for any loss
occasioned to any person acting or refraining from action as a result of the material in this booklet is accepted by Baker & McKenzie LLP, an Ontario limited liability partnership
or the Government of Ontario.
In addition, Baker & McKenzie LLP, an Ontario limited liability partnership and the Government of Ontario do not assume and are not responsible for any liability arising from the use
of any websites listed in this publication or from the linking to or the downloading of information or materials from any of the web sites listed.
Baker & McKenzie LLP, an Ontario limited liability partnership and the Government of Ontario do not assume and are not responsible for any liability for the operation, content
(including the interpretation, comments or opinions expressed therein) or the right to display any such material information on any of the web sites listed. Baker & McKenzie LLP,
an Ontario limited liability partnership nor the Government of Ontario shall be liable for damages of any kind arising from this use of this publication site, including direct, special,
indirect, punitive or consequential damages.
You should also review the privacy notice on those sites as their information collection practices may differ, as well as their terms of use. Specific comments or inquiries regarding those
sites listed in this publication should be directed to the individual organization.
Please note that the information and web site addresses listed were current as of November 1, 2006 and are subject to change without notice.
The Essential Guide Get the Facts on Establishing
a Business in Ontario
Thinking of setting up a business in Ontario, Canada?
You’ve come to the right place. This booklet provides
brief, clear summaries of the laws and regulations on every
aspect of establishing a business in Ontario.
Investors from all over the world chose Ontario. Commercial
law in Ontario offers many advantages that help make
us one off the world’s most dynamic and profitable
business centers.
•O
ntario is generally open to foreign investment.
Most foreign investment transactions in Ontario
are not subject to review or approval.
• Incorporating your business in Ontario is fast and
inexpensive. There are no monetary limitations on
authorized capital or requirements for a minimum
paid-in capital – (shares cannot be issued for no consideration but may be issued for nominal consideration).
•C
ompetitive business costs. Ontario’s combined
(provincial and federal) general corporate income
tax rate is almost four percentage points below the
U.S. average and our payroll taxes are the lowest of
the G7 nations.
•O
ur R&D tax incentive program is one of the
most generous in the world. When tax credits
are factored in, the after-tax cost of $100 in R&D
spending can be reduced to less than $41.
•G
overnment programs facilitate the temporary
entry of highly skilled workers. International firms
establishing or expanding operations in Ontario can
transfer key overseas personnel – and spouses can
apply for their own work permits, something that
can’t be done in many other jurisdictions.
•O
ntario has lower employer payroll taxes than
those in any G7 country. And the excellent, publicly
supported health care and education system have
helped Canada consistently rank at or near the top of
the United Nation Human Development Index.
Establishing a Business in Ontario
•U
nder the North American Free Trade Agreement
(NAFTA), Canada, the United States and Mexico
are eliminating duties on goods originating in
and traded between the three countries. Within a
day’s drive of Toronto, Ontario’s capital, businesses
have access to 106 million people with a total personal
income of $US 2.8 trillion.
•A
strategic location. Direct access to the $13.8 +
trillion North America market plus strong trade
partnerships with Europe and Asia.
•C
anada boasts­­­­ a strong and stable financial services
sector. Toronto, the capital of Ontario, is Canada’s
financial capital; the fully automated Toronto Stock
Exchange consistently ranks as one of the world’s top
exchanges.
You’ll find details on these topics and more in the following
pages. You’ll learn the essential facts about establishing a
business in one of the world’s most attractive business locations.
1
Business Regulation
Framework
Canada is organized on the principal of federalism, with
government powers divided between the federal government,
the provincial government and the local municipalities.
The Constitution Act details which level of government
will exercise legislative, executive and/or judicial powers
with respect to a given matter. The regulation of business
is one matter where jurisdiction is shared. The federal
government has jurisdiction over “trade and commerce”,
and the provincial governments have jurisdiction over
“property and civil rights”. Accordingly, references
throughout are applicable to federal legislation of
Canada and provincial legislation in Ontario.
2
Financial Services
2.1 General
The financial services sector in Ontario is strong and stable.
As a result of the constitutional division of powers, financial
services are regulated by both federal and provincial legislation.
The federal government has the legislative authority over
banking, the incorporation of banks, the issue of paper money,
currency and coinage, bills of exchange and promissory notes,
interest, legal tender, bankruptcy and insolvency and the
regulation of trade and commerce. Ontario has exclusive
legislative competence in relation to property and civil rights
in the province and, generally, all matters of a local or private
nature within the province. This overlapping responsibility
means that, depending on the type of financial product or
service provided, there could be both federal and Ontario
legislation to consider.
Today there are over 3,000 individual institutions offering
financial services in Canada. In the past, the delivery of
financial services was strictly divided between the so-called
“four pillars” of banking, insurance, securities and trust services.
Participants in each of these sectors were generally confined to
offering products and services within their sectors. In recent
years these restrictions have been lifted to some extent. For
example, in 1992, banks obtained the right to own insurance,
trust and securities subsidiaries. More recently, in 1999 the
federal government permitted foreign banks to operate
branches in Canada rather than act only through Canadian
subsidiaries. Also in 1999, federal legislation allowed large
mutual life insurance companies to demutualize or issue
participating shares, in order to access capital. However, banks
and other deposit taking financial institutions are still not
permitted to compete with insurance retailers by selling
insurance at their branches. Additional reforms are anticipated
to further transform the regulatory environment for financial
services in Canada.
2.2 Bank of Canada
The Bank of Canada is Canada’s central bank. It was founded
in 1934 to regulate credit and currency in the Canadian
economy. The Bank of Canada is not a government
department but an independent Crown corporation that has
considerable autonomy to manage the country’s financial
system. It is responsible for monetary policy in cooperation
and consultation with the Ministry of Finance, for central
banking services, bank rates, currency, foreign exchange
reserves, and the administration of public debt. The
Governor of the Bank of Canada is appointed for a term
of seven years and cannot be dismissed by the government.
The Bank of Canada does not play any part in the regulation
or daily administration of commercial banks in Canada.
2.3 The Regulations
a) Federal—The Office of the
Superintendent of Financial Institutions
The Office of the Superintendent of Financial Institutions
(OSFI) is the primary regulator of federal financial institutions
and federally administered pension plans in Canada. It
supervises and regulates all banks (domestic, as well as foreign
bank subsidiaries and branches in Canada), and all federally
incorporated or regulated trust and loan companies, insurance
companies, cooperative credit associations, fraternal benefit
societies and pension plans. A company must apply to OSFI
to become a federally regulated financial institution entitled
to carry on business in Canada. Applicants work with OSFI
to ensure legislative and regulatory compliance. The
application must include sufficient information to demonstrate that the company has the ability and resources to meet
minimum requirements for conducting business in its field.
The Office of the Superintendent
of Financial Institutions
Tel: 613-990-7788
Fax: 613-990-5591
Web: www.osfi-bsif.gc.ca
b) Provincial—Financial Services
Commission of Ontario
The Financial Services Commission of Ontario (FSCO)
regulates insurance, pensions, credit unions, caisses populaires,
cooperatives, mortgage brokers, and loan and trust companies
The Essential Guide in Ontario. It was created in 1998 as an independent
agency of the Ministry of Finance, integrating the
operations of the former Ontario Insurance Commission,
Pension Commission of Ontario and the Deposit
Institutions Division of the Ministry of Finance. The
Superintendent of Financial Services administers and
enforces the relevant Ontario financial services statutes.
Financial Services Commission of Ontario
Tel: 416-250-7250
Web: www2.fsco.gov.on.ca/alias2a/agents.a2a
2.4 The Institutions
a) Banks
In Canada banks are federally regulated by the Bank Act
and carry on business under the supervisory authority of
OSFI. They provide financial services according to a
common standard in all parts of the country, and they are
integral to the implementation of national policies vital to
the monetary and financial health of the country. Banks
are categorized as Schedule I, II or III, the main difference
between them being ownership.
Schedule I banks include eight dominant Canadian
“chartered” banks which carry on branch banking across
the country. Their shares are widely held. Many of these
large domestic banks have operations in the United States
and other foreign jurisdictions that may serve as a
convenient conduit for foreign investors seeking access
to the Canadian market.
The shares of Schedule II banks are closely held by
foreign banks or other eligible financial institutions.
Schedule II banks are typically Canadian subsidiaries of
foreign banks which do not conduct branch banking
operations in Canada, but do provide commercial
banking activities.
In 1999 Schedule III banks were introduced into
Canadian banking. Schedule III banks are authorized
foreign banks. This development has allowed qualifying
foreign banks to directly carry on commercial banking
business in Canada through branches, rather than through
separate Canadian subsidiaries.
Canadian banks are regarded as secure and
sophisticated. Electronic banking continues to grow. It is
estimated that over 85% of all banking transactions are
now done electronically in Canada.
b) Trust Companies
­Canadian trust companies are federally regulated by the
Trust and Loan Companies Act, and also provincially
regulated with respect to the activities of all loan and trust
corporations carrying on business in specific provinces
(in Ontario, the Loan and Trust Corporations Act). Like
banks, trust companies in Canada are deposit-taking
institutions that offer many of the same services that
banks offer such as mortgages, chequing accounts, loans
Establishing a Business in Ontario
and investments. However, the main distinction is that
trust companies specialize in fiduciary services which
include wills and estate planning, investment administration,
trust activities, and assistance to executors. Unlike Canadian
banks which cannot act as trustees, Canadian trust companies
can manage assets placed in trust.
c) Insurance
i) Insurance Companies
Insurance companies in Canada offer insurance products
and services as well as a broad range of other financial
services to both individuals and corporations including
pension fund management and mutual funds.
The insurance industry in Canada is regulated
concurrently by both federal and provincial legislation.
Federal legislation regulates the creation and authorization of
insurance companies including the approval of foreign
incorporated insurance companies in Canada insuring risks,
and it has supremacy and exclusive jurisdiction over the
financial stability and solvency matters relating to federally
and foreign incorporated insurance companies operating in
Canada. The provincial government has jurisdiction over
most other insurance matters including the contractual
relations between insurers and their customers, the form and
content of insurance contracts, business and marketing
practices, and agent and broker licensing. Provincial
regulation extends to all companies wishing to do business in
a particular province, regardless of whether they are
incorporated under federal, provincial, or foreign legislation.
The Ontario Insurance Act regulates the business of
insurance in Ontario, and requires every insurer undertaking
insurance in Ontario or carrying on business in Ontario to
obtain and hold a licence. A wide range of specific activities
are deemed to constitute “carrying on business” in Ontario.
The Act is restrictive in its approach to unlicensed foreign
insurers or their agents marketing to residents of Ontario.
ii) Insurance Agents and Brokers
Insurance agents and brokers are generally governed by
the Ontario Insurance Act, while brokers are also subject
to the provisions of the Registered Insurance Brokers Act
(RIBA). It is an offence for any person to act as an insurance
agent without a licence under the Ontario Insurance Act.
Insurance brokers are self-regulated professionals in
Ontario and are not licensed by the government. The
RIBA establishes the governing body for insurance brokers,
the Registered Insurance Brokers of Ontario (RIBO).
Although some of the basic criteria and requirements for
membership are established by regulation, RIBO rather
than the government generally determines the details of
admission and membership. RIBO regulates the licensing,
professional competence, ethical conduct and insurance
related financial obligations of all independent general
insurance brokers in the province of Ontario. Insurance
brokers must be certified and registered under the RIBA
in order to carry on business in the province.
Registered Insurance Brokers of Ontario
Tel: 416-365-1900
Fax: 416-365-7664
Web: www.ribo.com
d) Credit Unions and Caisses Populaires
Credit unions and caisses populaires are member-owned
deposit-taking financial institutions that provide a wide range
of products and services. They are provincially regulated in
Ontario by the Credit Unions and Caisses Populaires Act.
e) Securities Dealers
Securities regulation is fundamental to many different
types of business transactions, far beyond the trading
of shares on the public market. Securities regulation in
Canada is a matter of provincial jurisdiction. In Ontario
trades and distributions of securities are governed by
the Securities Act under the supervisory authority of the
Ontario Securities Commission (OSC). No person or
company may trade in securities in Ontario unless such
person is registered under the Securities Act. In addition, the Securities Act regulates the activity of advising in
respect of securities.
The business of investment or securities dealers
involves the trading of securities for clients. Such dealers offer a variety of related financial services including
fund management, under-writing, and financial advice.
“Discount” brokerages simply execute trades for clients,
whereas the “full service” brokerages offer sophisticated
wealth management services. With the recent “blurring”
of some of the distinctions between the so-called “four
pillars,” all of the major Canadian domestic banks now
have discount brokerage operations.
Ontario Securities Commission
Tel: 416-593-8314
Fax: 416-593-8122
Web: www.osc.gov.on.ca
3
Canadian Judicial System
and Litigation Process
3.1 Introduction
Each province in Canada has established a system of courts
for the administration of justice. In addition, certain
specialized federal courts exist to deal with income tax,
intellectual property, and other federal subjects. Since the
provinces exercise jurisdiction over “property and civil
rights,” most dispute resolution is handled by the provincial
court system.
The Superior Court of Justice exercises original trial
jurisdiction of the Court in Ontario for civil matters.
The Small Claims Court is a branch of the Superior
Court of Justice and provides a comparatively informal
forum for the resolution of disputes where the amount
involved is less than $10,000. The Ontario Court of
Justice is a second branch of the trial courts in Ontario,
and is comprised of those courts dealing with criminal
and family matters, as well as provincial offences.
Ontario has two levels of appeal courts. The Divisional
Court is a branch of the Superior Court of Justice and has
limited appellate jurisdiction, while the Court of Appeal
for Ontario is the superior court of record in Ontario and
exercises general appellate jurisdiction from both the trial
division and from the Divisional Court.
The Supreme Court of Canada is the final court of
appeal in Canada for all matters and is composed of nine
judges appointed by the federal government from each
region of the country.
3.2 Civil Litigation Process
Civil litigation follows three stages: a pleadings stage,
a discovery stage and a trial stage. Pleadings set out the
substantive elements of the claim or the defence. Discovery
involves compliance with extensive pre-trial disclosure rules,
involving the examination of parties to the litigation and the
exchange of documents relevant to the matters at issue.
Between the discovery and trial stages, the Courts have
various “pre-trial” procedures with the aim of promoting
settlements and speeding up the litigation.
Following discovery, litigants in Ontario proceed to a
trial, normally conducted by a judge alone. In certain
matters, trials may be heard before a jury, which may be
comprised of six or twelve members of the community in
which the trial is being heard, depending on the jurisdiction.
3.3 Jurisdiction
In order for the Ontario courts to establish jurisdiction
over a defendant, the court must be convinced that there
exists a sufficient connection between the defendant and
the territory in which the proceeding has been instituted.
This connection may be established where the defendant
Fast Facts
Ontario is part of the US $13.8 trillion North
American Free Trade market. Total trade with
Europe has grown to almost $11 billion annually
and more than $16 billion annually with
Asian leaders.
The Essential Guide (i) resides within the territorial jurisdiction of the court;
(ii) has been served with the originating process within
the court’s territorial jurisdiction; and/or (iii) voluntarily
submits to the jurisdiction of that court.
Canadian courts additionally have “long arm” rules
which allow courts to assert jurisdiction on the basis of a
connection between the proposed jurisdiction and the subject matter of the dispute. For example, an Ontario court
may assume jurisdiction over a dispute based on (i) the
residence of one of the parties to the litigation; (ii) where
a contract that is the subject matter of the litigation was
executed or breached within Ontario; (iii) where a tort
has allegedly been committed in Ontario; and/or (iv) where
a company’s head office is situated within Ontario or that
company carries on business in Ontario.
Canadian courts generally accept the parties’
contractual choice of jurisdiction in which disputes arising
from their relationship will be adjudicated, although the
Court may, in extreme circumstances, override a contractual choice of jurisdiction clause. Similarly, Canadian courts
will generally honour a contract in which the parties to
a dispute have agreed that any disputes will be governed
by the substantive laws of another jurisdiction. Canadian
courts can and do hear such disputes, although the parties
are required to prove the substantive law of the foreign
jurisdiction by presenting testimony from a lawyer who is
an expert on the law of the foreign jurisdiction.
3.4 Arbitration in Ontario
In Ontario, domestic arbitrations are governed by the
Arbitration Act (Domestic Act). International arbitrations are governed by the International Commercial Act
(International Act), which adopts, as a Schedule, the
Model Law on International Commercial Arbitration, as
adopted by UNCITRAL. Both arbitration Acts recognize
the legitimacy of the arbitral process and the Ontario
courts have exercised judicial deference to properly constituted
arbitrations. The Courts have expressly indicated their
willingness to stay Court proceedings in favour
of arbitrations.
In order for an arbitral award to be enforced in
Ontario, a judgment recognizing the award by the Judge
of the Ontario Superior Court is necessary. If the
arbitration agreement provides that an award is final and
binding, there will be no right of appeal.
Fast Facts
Ontario’s high-tech sector employs more than
230,000 people and has annual revenues of more
than US$ 40 billion.
Establishing a Business in Ontario
4
Foreign Investment
4.1 Introduction
In order to encourage, facilitate and monitor levels of foreign
investment in Canada, the federal government enacted
the Investment Canada Act (ICA). The ICA monitors the
establishment of new businesses and acquisition of existing
businesses by non-Canadians. Non-Canadians, for the
purposes of the ICA, are individuals who are neither
citizens nor permanent residents of Canada, and entities
which are not controlled by Canadian citizens or
permanent residents.
Under the ICA, most foreign investment transactions,
except for transactions that fall within the categories of
reviewable transactions discussed below, are not subject
to prior review or approval and must simply be notified
to Industry Canada.
4.2 Notifiable Transactions
a) New Business
A non-Canadian establishing a new business in Canada
must file a form of notification with Industry Canada,
within thirty days of the commencement of the business;
in most cases, this will be a simple procedure.
b) Acquisition of Control
Notification within the same time period is also all that
is required for the acquisition of a Canadian business
by a non-Canadian, with the exception of reviewable
transactions described below which are deemed “significant”
for either the size of the transaction, or the nature of
the business.
4.3 Reviewable Transactions
a) Significant Transactions
There are generally three types of transactions that may be
subject to prior review under the ICA. The first category
of reviewable transaction involves review of acquisitions
of “significant” Canadian businesses by a non-Canadian.
For the year 2006, a “significant” Canadian business
for purposes of acquisition of control by a World Trade
Organization (WTO) member investor is defined as a
business whose assets have a book value in excess of
$265 million. For investors from non-WTO member
countries, the threshold asset value for prior review is
$5 million unless the business is being acquired from a
non-Canadian which is a WTO member investor.
b) Special Treatment Businesses
The second category of reviewable transaction involves
acquisitions of “cultural businesses” including businesses
carrying on the publication or sale of books, films, music
recordings, music and radio or television broadcasting,
and businesses engaged in the production of uranium,
or providing financial or transportation services. The
acquisitions by non-Canadians of such businesses whose
asset value is more than $5 million are subject to review.
c) Business Relevant to Canadian
Heritage and National Identity
Finally, the federal government reserves an overriding
discretion to review foreign investments, which would
otherwise be merely notifiable, in rare circumstances
where the business activity relates to Canada’s “cultural
heritage or national identity,” and, where the government,
on recommendation of the Minister, considers that it is in
the public interest to review the investment. In such cases,
the investor must be notified within 21 days of submitting
the required notification under the ICA.
The review and approval of all investments relating to
cultural industries is the responsibility of the Minister
of Canadian Heritage. All the other investments are the
responsibility of the Minister of Industry.
In deciding whether to grant approval, the government
will determine whether the acquisition will result in a “net
benefit” to Canada. Acquisitions that are subject to review
generally cannot be completed until approval is received.
The ICA sets out a 45-day period as the norm for consideration of reviewable transactions. The review period may
be extended for an additional 30 days and frequently is.
Industry Canada Investment Review Division
Tel: 613-954-1887
Web: investcan.ic.gc.ca
5
Establishment of
Business
5.1 Canadian Corporate Law
a) Canadian Corporations
Direct investment in Canada is often through the
establishment of a corporation, which may be formed
under provincial or federal law. The commentary that
follows relates to private, as opposed to public (offering)
corporations, and is based on the provisions of the federal
Canada Business Corporations Act (CBCA) and the
provincial Ontario Business Corporations Act (OBCA).
b) Incorporation Procedure
Incorporation may be effected rapidly and inexpensively.
Often the most pressing initial matter is to choose a
corporate name that is not confusingly similar to that
of an existing corporation or trademark. Incorporation
is achieved by the filing of Articles of Incorporation and
the issuance of a Certificate of Incorporation. Articles of
Incorporation for federal and Ontario corporations do
not require a statement of objects or any monetary expression of authorized capital. Corporations formed under the
CBCA and OBCA are granted all the rights of a natural
person. There are no requirements for a minimum
paid-in capital.
Unless otherwise provided for in its articles, all shares
of a federal or Ontario corporation are fully participating,
voting common shares without par value. More complex
share provisions may be designed and there is a wide
flexibility as to the rights and conditions that may be
attached. Shares of Ontario and federal corporations are
not properly issued until they are fully paid for in money,
property or past services.
A corporate name may be in English and/or French,
and if a special provision is made in the corporation’s
articles, any other language, as long as only letters from
the English alphabet and Arabic numerals are used. The
name must include one of the following indicators of
limited liability: “Limited,” “Ltd.”, “Incorporated,” “Inc.”,
“Corporation” or “Corp.”
Incorporation may be effected without a prior name
search by using a numbered company. Corporate names
consisting of a number plus words such as “Ontario Inc.”
or “Canada Ltd.” are commonplace. The name may be
changed for a nominal fee at a later time with approval
of the directors. It is not unusual to see corporations
operating under their number names with one or more
registered “doing-business-as” names. Regardless of whether a corporation operates under its corporate name or a
registered business name, there are certain key
documents that must always set out the corporate name,
such as contracts and negotiable instruments (including
cheques). Where a corporation wishes to protect its
name across the country, it may be preferable to
incorporate federally as a federal corporation may operate
under its corporate name in every province whereas an
Ontario corporation’s name is reserved only in the
province of incorporation.
Fast Facts
The Windsor-Detroit border crossing is North
America’s busiest. Each day, 9,000 trucks
cross the Ambassador Bridge carrying over
$300 million worth of just-in-time deliveries.
The Essential Guide A corporation formed in one province must register
in every other province or territory in which it will “carry
on business.” However, Ontario and Québec have entered
into a reciprocal arrangement requiring annual filings but
no extra-provincial registration per se. CBCA corporations
are also required to register in each province where they
carry on business.
FEDERAL INCORPORATION
Industry Canada
Corporations Directorate
Tel: 613-941-9042
Fax: 613-941-0601
Web: strategis.ic.gc.ca/sc_mrksv/corpdir/engdoc/
homepage.html
Business Registration Online
Web: www.businessregistration.gc.ca
c) Directors and Officers
The board of directors of a corporation has the power
and responsibility to manage the corporation’s affairs.
Federal or Ontario corporations may have one or more
directors, and may provide in their Articles for a minimum and maximum number of directors, with the precise number to be established from time to time. The
board of directors of an OBCA corporation must be
composed of a majority of resident Canadians. However,
if there are two directors of an Ontario corporation, only
one need be a resident Canadian. Under the OBCA,
directors are prohibited from transacting any business at
a meeting of directors unless a majority of the directors
present are resident Canadians.
A CBCA corporation must have a board of directors
composed of at least 25% resident Canadians, and if
there are fewer than four directors, at least one director
must be a resident Canadian. Directors under the CBCA
and OBCA must be individuals, at least 18 years old,
not bankrupt and not of unsound mind. Directors of
Canadian corporations must be individuals.
Canada has no residency requirement for corporate
officers. Officers must be individuals. Although there
is no legal requirement to appoint officers, most
corporations have at least a president and a secretary.
The same individual may fill both offices. Subject to
the corporation’s articles, by-laws or any unanimous
shareholders’ agreement, directors may appoint officers,
designate their title and delegate to them powers to
manage the affairs of the corporation. The standard that
directors and officers are held to is that they must act
“honestly, in good faith with a view to the best interests
of the corporation,” and they must exercise the “care, diligence and skill that a reasonably prudent person would
exercise in comparable circumstances.”
The corporate formalities required to operate a
Canadian corporation are minimal. Any resolution of
Establishing a Business in Ontario
shareholders or directors may be passed by unanimous
written consent without the necessity of convening
formal meetings. This is true even with respect to the
annual business, being as the approval of financial
statements, the election of auditors and directors, and
the appointment of officers.
d) Auditors and Public Disclosure
of Financial Information
Federally incorporated private corporations and Ontario
private corporations may, by resolution, dispense with the
appointment of an auditor. The OBCA and CBCA do not
require private corporations to make public disclosure of
financial information.
e) Unanimous Shareholder Agreements
The board of directors has statutory power to manage the
corporation. However, a unanimous shareholder
agreement of all shareholders, or a written declaration of a
sole shareholder, may be entered into whereby the
shareholders assume, or the sole shareholder assumes,
some or all of the powers of the directors to manage the
business and affairs of the corporation. This arrangement
may be particularly useful where Canadian resident directors are appointed solely to meet residency requirements.
Unanimous shareholder agreements are also useful to set
out rights and obligations as among the shareholders themselves, typically making provision for “rights of first refusal”
and “pre-emptive rights,” to ensure shareholdings stay
within a certain group. The shareholder(s) acquires all the
liabilities associated with the powers of the directors that it
acquires pursuant to the USA.
5.2 Branch Operations
Branch operations in Canada are a possible alternative to
incorporation. A non-Canadian corporation may register to
carry on business in Ontario as a branch in the same manner
as a corporation incorporated federally or in any province.
Non-Canadian corporations with branch operations must
appoint a local agent for the service of court documents.
A key distinction between operating through a
subsidiary corporation as opposed to a branch is that a
branch is not a legal person and, as such, the
non-Canadian corporation is subject to liabilities incurred
by the branch in the Canadian business.
5.3 Partnerships
a) General Partnerships
Partnership is a less commonly utilized form of business
organization in Canada, but it provides significant
organizational flexibility. There are no citizenship
requirements in the applicable partnership statutes.
A partnership does not generally provide the limited
liability associated with incorporated companies. In a
“general partnership,” all partners are subject to unlimited
liability for the obligations of the partnership.
A “partnership” is defined as a relationship existing
between persons carrying on a business in common with
a view to generating a profit. The Ontario Partnerships
Act regulates Ontario partnerships, whether or not they
arise pursuant to an agreement. An Ontario partnership
is required to file a registration form providing information about the partners themselves, the name under which
business is to be conducted, and the activity carried out in
the partnership name.
b) Limited Partnership
Ontario also allows the more restricted form of liability
associated with a “limited partnership,” wherein a partner’s
liability may be restricted to the amount of his or her
contributed capital. As a general rule, limited partners are
not permitted to participate actively in the management
of the partnership, although the general partners may be
restricted from taking certain action without the consent
of the limited partners. A limited partnership is prohibited
unless there are one or more general partners with
unlimited liability.
5.4 Strategic Alliances
Foreign investors often favour a joint venture with a
Canadian party over the establishment of a wholly-owned
subsidiary. Joint ventures may be created by the
establishment of a new business or by the acquisition of a
partial interest in an existing Canadian business, in either
case, in co-operation with another entity, frequently one
with local experise. The best structure is usually
determined by evaluating the desired business relationship,
the need for limited liability and the tax circumstances of
the proposed joint venture partners.
a) Contractual Joint Venture
If the parties intend their relationship to be short-term,
such as for a single project, they may carry out the joint
venture by entering into a contract, without forming a
new separate entity. The disadvantage of conducting a
joint venture in this manner is that liability to third
parties will not be limited to the assets of any new joint
venture vehicle. A contractual joint venture is not a
separate legal person and therefore the parties will own
the assets and will be responsible for the debts and obligations of the joint venture from the parties’ own assets.
Furthermore, profits or losses of a contractual joint
venture will flow directly through to the parties in
accordance with their joint venture agreement.
parties. In a general partnership, all partners may
participate in management and all have unlimited liability
for partnership debts. A general partnership is frequently
used for commercial or industrial joint ventures among
corporate partners.
Unlike a contractual joint venture, assets may be held
in the name of the partnership and the partnership may
itself enter into contracts. The liability of the joint venture
partners to third parties will not be limited to the capital
that the partners contributed to the joint venture. The
partners often attempt to reduce this risk by having each
joint venture partner create a subsidiary corporation in
or outside Canada with a limited amount of capital and
then organizing the partnership between the subsidiary
corporations.
Joint ventures in the form of limited partnerships are
less typical but are sometimes used for investments in real
estate or natural resources projects. The foreign investor
would act as a limited partner, thereby gaining limited
liability. Any profits or losses would pass through to the
limited partner. However, the limited partner would have no
right to participate in the management of the joint venture.
c) Incorporated Joint Venture
An incorporated joint venture is a corporation with limited
liability and two or more shareholders. This arrangement is
best suited to long-term, ongoing business relationships and
provides the advantage of limited liability. The joint venture
agreement will typically contain a detailed exposition of the
management responsibilities, capital structure and intended
operation of the business. The capital structure of an
incorporated joint venture will generally consist of
contributions to capital and shareholder loans. The parties
may contribute cash or other property, such as physical
assets to be used in the business.
By way of a unanimous shareholders agreement, shareholders may assume the powers of the directors of the
joint venture and manage the corporation directly.
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b) Partnership Joint Venture
A foreign investor may conduct business in Canada
as a member of a general partnership or a limited partnership, typically through a written agreement between the
The Essential Guide 6
6.3 Rates of Taxation
Taxation
6.1 Introduction
Both the Ontario and federal government impose income
tax on individuals and corporations.
The federal government conducts the collection
of personal income taxes for Ontario. The Ontario and
federal personal income tax rates are different but are
usually applied to the same income.
The province of Ontario currently administers and
collects income tax from corporations that carry on
business in Ontario. However, Ontario and the Federal
government have agreed that the Canada Revenue Agency
(federal) collect all corporate taxes on behalf of the Province
starting in 2009. The Ontario and federal corporate income
tax rates are different but apply generally to the same
income.
6.2 Basis of Taxation
a) Residents
Canadian resident “persons,” including individuals,
corporations, trusts and estates, are taxed on their income
from all sources worldwide. Income may be earned from
employment, business, property, dispositions of capital
property and from other sources.
Canada’s tax treaties and Ontario legislation provide
relief from double taxation where a person may be
considered taxable in both Canada and the treaty country
because of that person’s residence, citizenship, domicile,
etc. The treaties provide rules for determining whether
a person is resident in Canada or in the treaty country.
Generally, a person who is resident in one treaty country
will not be considered resident in the other.
b) Non-Residents
Non-residents of Canada are subject to taxation only on
income from employment and business income earned
in Canada, and on one-half of gains realized from the
disposition of taxable Canadian property, such as real estate
or shares in a Canadian private corporation.
Canada’s tax treaties and Ontario legislation reduce
the extent to which non-resident persons are subject to
Canadian and Ontario tax. For example, under almost all
such treaties, profits earned by non-residents from carrying
on business in Canada and Ontario are not taxed unless they
arise from a “permanent establishment” of the non-resident
in Canada and Ontario. The term “permanent establishment” generally refers to a fixed place of business or certain
kinds of arrangements with employees or agents in Canada.
10 Establishing a Business in Ontario
a) Individuals
Under both federal and Ontario legislation, marginal tax
rates apply to individuals. For 2006, provided the most
recently announced budget is enacted into law and beyond,
the combined federal and Ontario top marginal rate for
individuals is 46.4% for salary and interest, 23.2% for
capital gains and approximately 26.3% for dividends. The
tax rate on dividends may further decline if the provinces
follow the recent changes in the federal budget for dividends.
b) Corporations
As with individual tax rates, the federal government has
announced reductions in corporate tax rates. However, the
reductions are proposed to take place in future years and
may not come into effect.
Ontario Corporate Income Tax Rates
2005
2006
2007
2008
14.0%
14.0%
14.0%
14.0%
Manufacturing/
12.0%
Processing
12.0%
12.0%
12.0%
Small Business
5.5%
5.5%
5.5%
General
5.5%
Combined Federal/Provincial Corporate
Income Tax Rates
2005
2006
2007
2008
36.1%
36.1%
36.1%
34.5%
Manufacturing/
34.1%
Processing
34.1%
34.1%
34.1%
Small Business
18.6%
18.6%
17%
General
18.6%
Source: Ministry of Finance
Canada Revenue Agency
Tel: 1-800-959-5525
Web: www.cra-arc.gc.ca
Ministry of Finance
Corporations Tax Branch
Tel: 905-433-6500
Fax: 905-433-6998
c) Capital Gains
The Ontario and federal governments require 50% of
capital gains to be included in income. Individuals who
become residents of Canada will be subject to Canadian
tax only on the gain that accrues on certain property while
the person is a Canadian resident. Individuals are entitled
to an exemption on capital gains realized upon the
disposition of their principal residence.
d) Tax Credit Rate for 50 percent
Canadian-Owned Corporations
A lower rate of taxation is available to a private corporation in which Canadians hold at least 50% of the voting
interest. The federal lower rate is available to the first
$300,000 of active business income. The Ontario lower
rate is available to the first $400,000 of active business
income. Foreign investors may hold up to 50% of the
voting shares of a Canadian joint venture corporation
and still qualify for the reduced rate.
property rights, such as patents and computer software,
is 0%. In lieu of a withholding tax, Ontario adds back
to income a portion of certain payments to non-residents
who were not dealing at arm’s length.
g) Capital Tax
Both the Ontario and federal governments are committed
to phasing out and completely eliminating the tax on the
capital of large corporations. The Canadian federal
government has announced in the most recent budget that
the capital tax has been eliminated as of January 1, 2006.
Ontario is also projecting that it will eliminate the capital
tax; however, this will not be accomplished until January 1,
2012. For 2005, Ontario levies corporate capital tax on the
taxable capital of a corporation in excess of $10 million at
the rate of 0.3%. Taxable capital essentially is comprised of
the assets on the balance sheet, along with adjustments for
reserves and any other surplus, less an investment allowance
for shares held in other corporations.
Capital Tax Rates
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e) Scientific Research and Experimental
Development (SR&ED)
Businesses in Ontario are eligible for tax relief for their
research and development expenditures. Current and
capital expenditures on SR&ED are deductible by a
business in computing income. In addition, a 20% tax
credit is available for many expenditures that qualify for
the SR&ED deduction (“qualified expenditures”).
For private corporations not controlled by non-residents,
the amount of this tax credit is increased to 35% of
qualifying expenditures and is a refundable credit i.e., if
the credit exceeds tax otherwise payable, the business may
receive a refund.
f ) Withholding Tax
Dividends, interest, management or administration fees,
and royalties (including lump sum payments for the use
of property in Canada) paid to a non-resident are subject
to a withholding tax of 25%. Canada’s treaties generally
reduce this percentage. For example, under the CanadaUS Treaty, the withholding rate on interest is 10% and
5% on dividends paid by a subsidiary to a parent (in other
cases, the dividend withholding rate is 15%). Under some
Canadian treaties, such as the Canada-US Treaty, the withholding rate on royalties for certain intellectual
2005
Federal – rate 0.175%
2006
2007
2008
0%
0%
0%
Federal
– deductible
$50
Million
Eliminated as of
January 1, 2006
Ontario – rate
0.3%
0.3%
0.285% 0.285%
Ontario
– deductible
$5
Million
$10
Million
$12.5
$15
Million Million
h) Corporate Minimum Tax
Ontario imposes a corporate minimum tax (CMT) of 4%
on corporations which individually or together with
associated corporations have annual gross revenues in excess
of $10 million or total assets in excess of $5 million. The
CMT is payable only if it exceeds regular corporate income
tax payable. The 4% CMT rate is applied to the “CMT
base.” The CMT base is essentially a financial statement net
income or loss before taxes plus certain prescribed additions
and less certain prescribed subtractions. If CMT is payable in a year, it can be deducted in future years (up to ten)
against ordinary corporate income tax payable.
i) Branch Tax
The Income Tax Act levies an additional 25% tax on a
non-resident corporation carrying on business in Canada
through a branch. This tax is imposed on after-tax
Canadian profits of such corporations that are not
reinvested in Canada. The branch tax is in lieu of the
withholding tax that would be levied were the corporation
resident in Canada and paying dividends to non-resident
The Essential Guide 11
shareholders. The branch tax is reduced under Canada’s
tax treaties to the applicable treaty withholding tax rate on
dividends. In some treaties, such as that with the United
States, there is a cumulative exemption from branch tax
on the first $500,000 of branch profits.
j) Employer Health Tax
In Ontario, the health care system is partially funded by
way of a graduated payroll tax levied against employers.
If an employer’s payroll (defined as total remuneration
to employees, including benefits) exceeds $400,000 the
Employer Health Tax rate is 1.95% of total payroll.
Ministry of Finance Employer Health Tax Branch
Tel: 905-436-4561
Fax: 905-436-4471
k) Land Transfer Tax
The province of Ontario charges land transfer tax on the
acquisition of an interest in real property, including freehold,
easements and in some cases leasehold interests. The amount
of the tax is based on the value of consideration paid for the
interest in real property. The tax is payable on registration of
the conveyance in the applicable registry office or, in the case
of unregistered dispositions of a beneficial interest in land,
within 30 days of the disposition taking place.
6.4 Differences from Other Tax systems
• Non-residents who invest in Canadian corporations
may receive their capital back without payment of tax.
•­ Canada and Ontario do not have “ordering rules” that
require dividends to be paid before capital is returned.
• Canada and Ontario do not impose an “inventory tax.”
• Canada and Ontario do not impose “stamp” taxes.
6.5 Federal Goods and Services Tax
a) General
A federal value-added tax, known as the Goods and
Services Tax (GST), applies to most goods and services
imported into or sold in Canada. In Ontario, the GST
is imposed at a rate of 6%. Ontario also administers its
own provincial sales tax.
As a general rule, the GST is collected throughout the
production and distribution chain. Businesses at each level of
the chain charge GST on their domestic sales and are able to
claim a full refundable credit, known as an “input tax
credit,” for any GST paid on purchases of goods and services
used in the course of doing business. Persons required to
collect and remit GST must register with the Canada
Revenue Agency (CRA) and file GST returns at the end of
each reporting period, remitting the difference between the
GST charged on sales and input tax credits claimed for the
period. If the input tax credits exceed the amount of GST
charged on sales in any reporting period, the
difference is refunded.
12 Establishing a Business in Ontario
When obtaining a business number with CRA,
companies may open accounts for corporate income
tax, import/export, payroll deductions as well as GST.
The GST base is very broad, covering the vast majority
of “supplies” made in Canada. A “supply” is the provision
of property or a service in any manner including a sale,
transfer, barter, exchange, licence, rental, lease or gift. GST
is not payable on a limited number of supplies specifically
designated as “zero-rated” supplies (also referred to as “taxfree supplies”) and “tax-exempt”
supplies. Zero-rated supplies include basic groceries,
agricultural and fish products, prescription drugs and
medical devices. Tax-exempt supplies include certain
domestic financial services, health care services and
educational services. The key difference between zerorated supplies and tax-exempt supplies is that the vendor
or lessor making zero-rated supplies is entitled to recover
the GST it has paid by claiming input tax credits, whereas
vendors or lessors making tax-exempt supplies cannot.
b) Registration Requirements
As a general rule, all persons engaged in a “commercial
activity” in Canada must register to collect the GST
within 30 days of first making a taxable supply in Canada.
Non-residents are required to register only if they
carry on business in Canada and make taxable supplies in
Canada. It should be noted, however, that a non-resident
corporation which has a “permanent establishment” in
Canada, as defined for GST purposes, is deemed to be
resident in Canada in respect of those activities carried
on through that establishment.
c) Imports
The GST is generally payable on the duty-paid value of
goods imported into Canada. The duty-paid value is the
value for duty determined for customs purposes plus any
customs duties and excise duties and taxes. The GST payable on imported non-commercial goods is collected by the
Canada Border Services Agency at the same time customs
duties are collected. Non-commercial goods are goods
other than those imported for sale or for any commercial,
industrial, occupational or institutional use.
GST also applies to services and intangible property, such
as intellectual property rights, imported into Canada. GST
is not imposed, however, on these supplies when imported
by registrants for use in a “commercial activity,” as this term
is defined for GST purposes. Where the imported service or
intangible property is for use other than in a commercial
activity (for example, in providing an exempt supply such as
domestic financial services), the GST applies on a
self-assessment basis.
d) Exports
The GST applies only to supplies of goods and services
“made” in Canada. Supplies of goods and services that are
made outside Canada are beyond the scope of the GST.
Special deeming rules are contained in the legislation for
purposes of determining when a supply is made inside or
outside of Canada. Furthermore, certain supplies of goods
and services that are made in Canada are specifically
designated as zero-rated exports and are not subject to
GST. Therefore, as a general rule, the GST does not apply
to goods and services exported from Canada. Exporters
are entitled, however, to claim input tax credits to recover
any GST paid on goods and services for use in their commercial activities, thereby completely removing from the
exported goods and services any GST component.
Canada Revenue Agency
Business Number Registration and GST Inquiries
Tel: 519-252-4705
Web: www.cra-arc.gc.ca
e) 4.6 Ontario Sales Taxes
All Canadian provinces have some form of general or
limited sales tax, such as sales taxes, use taxes, value-added
taxes, or specific sectoral taxes on fuel, tobacco, or hotel
and accommodation taxes.
The Ontario Retail Sales Tax (RST), sometimes referred
to as the Provincial Sales Tax, is a form of sales and use tax.
It applies to most sales, leases, and licences of tangible
personal property, computer software, and insurance policy
premiums. It also applies to certain services including telecommunications, admissions and ticket sales, transient
accommodation, commercial parking, warranties, and labour
services provided to install, assemble, dismantle, adjust,
repair or maintain tangible personal property.
The general rate of RST in Ontario is 8% and is
calculated on the fair value of taxable goods, taxable services
and insurance premiums. RST rates of 10% or 12% apply
to liquor, beer, and wine depending on where these items
are sold and the rate of RST is 10% on admissions to places
of amusement that exceed $4.00. There is also a 5% tax on
accommodations. The RST on automobile insurance
premiums was gradually phased out and no longer applies as
of April 1, 2004.
Ontario Ministry of Finance
Retail Sales Tax Branch
Tel: 519-433-3901
Fax: 519-661-6618
Web: www.gov.on.ca/fin
f ) 4.7 Municipal Taxation
Municipal taxation in Ontario generally takes the form
of real property taxation. Ontario municipalities do not
impose sales taxes or income taxes. Real property taxes are
not imposed by the federal government. Municipalities
levy and collect property taxes based on assessed values which are determined by the Municipal Property
Assessment Corporation. Municipalities may also levy
development charges against particular properties if
such developments will increase the need for its services.
Education tax rates are set by the Province and education taxes are collected by the municipalities in areas with
municipal organization and by school boards in areas
without municipal organization. Properties that are in
unincorporated areas are also liable for a provincial land
tax which is levied and collected by the Province.
7
Customs and
International Trade
7.1 Process of Importation
The Customs Act governs the administration and enforcement of Canada’s customs laws. All goods imported into
Canada must be reported to the Canada Border Services
Agency (CBSA) and all applicable duties and taxes must
be paid. The amount of customs duty payable will depend
upon the tariff classification, the origin and the value of
the goods as determined for customs purposes.
a) Business Number—Importer/Exporter
Account Number
All Canadian individuals or businesses importing on
a commercial basis must obtain a Business Number
and an Import/Export Account in order to account
for their goods. The CBSA uses this number and the
Import/Export Account to identify a business and to process Customs accounting documents. Application forms
are available from all CBSA offices.
Canada Revenue Agency
Tel: 613-952-3741 (Business Number Registration)
Tel: 204-983-3500 (Customs Information Service)
Web: www.cbsa-asfc.gc.ca
b) Customs Brokers
A customs broker acts as an agent of an importer in
dealings with the CBSA. Although any agent, customs
brokers included, may undertake most customs work on
behalf of importers, only customs brokers who have been
licensed by the CBSA may account for goods and pay
duties and taxes on behalf of an importer on a
commercial basis.
c) Tariff Classification of Imported Goods
Canada’s Customs Tariff (Canada) is based on the
international Harmonized Commodity Description and
Coding System. The classification of goods under the
Customs Tariff is used to determine the rate of duty that
The Essential Guide 13
applies, for statistical purposes, and to see if any of the
following apply: prohibitions, quotas, anti-dumping or
countervailing duties.
d) Valuation of Imported Goods
To find out how much duty and tax will apply to an
imported good, importers must first know the value of the
goods in question. The primary method of valuing goods
for Canadian customs purposes is the transaction value
method. The transaction value is the price actually paid or
payable for the goods when sold for export to Canada to a
purchaser in Canada, subject to certain adjustments,
provided that the vendor and the purchaser are not
related, or if they are related, provided that it can be
shown that the relationship has not influenced the price.
In other words, the value for duty is usually based upon
the selling price between the exporter and the importer.
Where the transaction value method cannot be used (for
example, if there is no sale for export to Canada), the
Customs Act provides a number of alternative methods of
valuation which must be applied in a specified order.
e) Tariff Treatment
Goods imported into Canada from most countries are
entitled to Most-Favoured-Nation tariff treatment. There
are, however, a number of preferential duty rates available provided the goods in question meet prescribed rules
of origin. Pursuant to the North American Free Trade
Agreement (NAFTA), for example, goods imported into
Canada from the United States and Mexico and which
meet the NAFTA rules of origin are entitled to benefit
from the reduced rates of duty provided under the United
States Tariff, the Mexican Tariff and the Mexican-United
States Tariff depending upon whether the goods are, in
general, the product of the United States, the product
of Mexico or the product of both countries, respectively.
Canada has also implemented free trade agreements with
Chile, Costa Rica and Israel. In addition, goods
originating in certain countries, such as Hong Kong,
Singapore and South Korea are entitled to preferential
rates of duty under the General Preferential Tariff,
provided certain local content requirements are met.
7.2 Import Controls
The Canadian Government restricts the importation of
certain goods, such as dairy, meat and poultry products,
to promote various domestic policy objectives as well as to
implement intergovernmental arrangements or commitments. Goods that are subject to import controls are
contained in an Import Control List established under
the Export and Import Permits Act (EIPA). Persons who
wish to import into Canada goods found on the Import
Control List must first obtain an import permit from the
Export and Import Controls Bureau of the Department of
Foreign Affairs and International Trade.
14 Establishing a Business in Ontario
Department of Foreign Affairs and International Trade
Export and Import Controls Bureau
Tel: 613-996-2387
Fax: 613-996-9933
Web: www.dfait-maeci.gc.ca/eicb
7.3 Export Controls
The EIPA not only controls the import of certain goods
into Canada, but also controls the export of certain goods
and technologies from Canada.
In order to control certain exports from Canada, the
EIPA authorizes the federal cabinet to establish an Export
Control List (ECL) and an Area Control List (ACL).
Goods and technologies listed on the ECL include
military goods and technologies, dual-purpose industrial
goods and technologies with both civilian and military
applications, nuclear-related goods and technologies and
miscellaneous non-strategic goods. Exporters whose goods
or technologies are found on the ECL are required to
obtain an export permit to export such goods to all
destinations. An exception to this rule is that it is not
necessary to obtain an export permit if the country of
final destination is the United States, except for
nuclear-related goods and certain miscellaneous items.
The ACL contains a list of countries to which all exports
are subject to controls and for which an export permit
must be obtained, whether or not the goods are contained
on the ECL.
Exporters must apply to the Export and Import
Controls Bureau of the Department of Foreign Affairs
and International Trade for an individual export permit.
However, in specific circumstances General Export Permits
(GEPs) may be available. GEPs authorize the export of
certain goods to eligible countries without requiring the
exporter to apply for an individual export permit, provided prescribed conditions are met.
Department of Foreign Affairs and International Trade
Export and Import Controls Bureau
Tel: 613 996-2387
Fax: 613 996-9933
Web: www.dfait-maeci.gc.ca/~eicb/epd_home.htm
7.4 The North American Free Trade Agreement
The NAFTA is a comprehensive free trade agreement
consistent with Article XXIV of the General Agreement
on Tariffs and Trade (GATT) 1997. This means essentially
that Canada, the United States and Mexico have agreed to
eliminate customs duties and other restrictive regulations
of commerce on “substantially all the trade” in goods
originating between the three countries.
The NAFTA came into effect on January 1, 1994
and provided for the elimination of duties on trade of
originating goods between Canada, Mexico and the
United States. As of January 1, 2003, originating goods
are not subject to duty when traded between Canada,
United States and Mexico.
Unlike the members of the European Union, which is
a customs and political union, the NAFTA members do
not have a common external tariff that applies to goods
imported from outside the free trade area. To ensure that
goods are not imported into the country with the lowest
external tariff and simply transshipped duty free to the
others within the free trade area, special rules of origin are
required to ensure that only goods produced within the
free trade area benefit from free trade treatment. The
rules of origin are complex and must be carefully
analyzed by corporations doing business in North
America who wish to take advantage of the preferential
rates of duty under the NAFTA.
ESA standards include minimum requirements for
notice and/or certain payments upon termination of
employment (discussed in more detail below), payment of
wages, work hours, paid vacation, public holidays,
overtime pay, emergency leave, family medical leave and
pregnancy and parental leave. The ESA also provides for
an internal mechanism for the enforcement of the
prescribed standards. Non-unionized employees who feel
that they have been denied any of the prescribed
employment standards may pursue their statutory rights
at little or no cost to themselves.
Department of Foreign and International Affairs
Web: http://www.dfait-maeci.gc.ca/nafta-alena/
menu-e.asp
Email: enqserv@dfait-maeci.gc.ca
8.2 The Ontario Employment Standards Act
a) Public Holidays and Vacation
The ESA outlines the specifics regarding employees’
entitlement to paid public holidays. Employees are
entitled to public holiday pay so long as they have worked
all of the regularly scheduled workdays preceding and
following a public holiday (this is subject to the employer
having “reasonable cause” not to pay). There is no
minimum period of employment required in order to
qualify for this entitlement and the employee need not
have earned wages prior to the public holiday in order to
benefit from this provision.
In Ontario, the following days are public holidays:
New Years Day, Good Friday, Victoria Day, Canada Day,
Labour Day, Thanksgiving Day, Christmas Day, and
December 26.
Once an employee has worked for 12 months,
employees are entitled to receive two weeks of vacation.
Employees are also entitled to receive vacation pay in
an amount equal to 4% of their annual wages. The ESA
defines wages as any monetary remuneration payable by
an employer to an employee under the terms of a contract
of employment. This would therefore include such things
as non-discretionary bonuses, commissions and overtime
pay, but would not include payments that are dependent
on the discretion of the employer and that are not related
to hours, production or efficiency.
In Ontario, the Employment Standards Act (ESA)
operates in conjunction with, but not in replacement
of, the law of contract. The ESA sets minimum terms
and conditions of employment. An employer may
provide its employees with greater rights than those
contained in the ESA, but they may not offer less
than the minimums prescribed by the ESA.
The ESA applies to most employees in
Ontario, although the regulations do exempt certain
categories of employees from specific provisions
of the ESA (for example, hours of work, minimum
wages, overtime pay, public holidays and vacation pay).
b) Pregnancy, Parental, Family Medical,
and Emergency Leaves
The ESA provides for four types of unpaid statutory
leaves. Pregnancy Leave, Parental Leave, Family Medical
Leave and Emergency Leave are briefly described below.
Female employees who have been employed by their
current employer for at least 13 weeks prior to the
estimated date of birth of the child are entitled to an
unpaid leave of absence (Pregnancy Leave) of up to
17 weeks duration.
In addition to Pregnancy Leave, under certain
conditions both parents are entitled to take unpaid
8
Employment Law and
Labour Relations
8.1 Introduction
Non-union employment relationships in Ontario are
governed by the principles of contract law and statute.
Since, for the most part, employment law is provincially
regulated, most Ontario employment relationships are
governed by Ontario’s own distinct set of employment statutes. Certain industries, however, including nuclear power,
aeronautics, banking, and inter-provincial transportation
for instance, are regulated at the federal level.
Ontario Ministry of Labour
Employment Standards
Tel: 416-326-7160
Web: www.gov.on.ca/LAB/main.htm
The Essential Guide 15
Parental Leave. Unpaid Parental Leave is available for
employees who have been employed for at least 13 weeks
prior to the birth (or in the case of adoptions, obtaining
custody of the child). The employee is entitled to begin
the leave within 52 weeks of the birth (or initial custody).
Natural mothers, who have taken Pregnancy Leave, must
commence their Parental Leave directly after their Pregnancy
Leave and are entitled to 35 weeks of Parental Leave.
Combined Pregnancy and Parental Leave would therefore be
for a maximum period of 52 weeks. Persons who have not
taken Pregnancy Leave (typically the father), and are entitled
to Parental Leave, are entitled to 37 weeks of Parental Leave.
Any employee who obtains a certificate from a
qualified health practitioner stating that a close relative has
a serious medical condition with a significant risk of death
within the next 26 weeks, and who wishes to take a leave
to provide care or support to that relative, will be entitled
to unpaid Family Medical Leave of up to 8 weeks per
incident. Close relatives for this purpose include the
employee’s spouse, a parent, step-parent or foster parent of
the employee, and a child, step-child or foster child of the
employee or the employee’s spouse.
Employers who regularly employ fifty or more
employees in Ontario must allow their employees to take
up to 10 unpaid days per year as Emergency Leave, if it is
required. Emergency Leave can be taken for one of three
categories of reasons:
• a personal illness, injury or medical emergency;
• the death, illness, injury or medical emergency
of a family member; or
• an urgent matter concerning a family member.
Family members for the purposes of Emergency Leave
are the employee’s spouse; a parent, step-parent or foster
parent of the employee, or the employee’s spouse; a
child, step-child or foster child of the employee or the
employee’s spouse; a grandparent, step-grandparent,
grandchild or step-grandchild of the employee or the
employee’s spouse; the spouse of an employee’s child; a
brother or sister of the employee and a relative of the
employee who is dependent on the employee for assistance.
During any of the above mentioned statutory leaves,
employees may be entitled to Employment Insurance
payments from the Federal Government. Furthermore,
any employee who is on any of the four above mentioned
leaves is also entitled to the following basic protections:
•Continued participation in all benefit plans (pension
plans, life insurance, accidental death and dismemberment plans, extended health plans, dental plans, Short
Term Disability (STD) and Long Term Disability (LTD)
unless he or she elects not to continue in writing;
• Inclusion of the leave for the purpose of calculating
length of employment, length of service, and seniority
under any contract of employment; and
16 Establishing a Business in Ontario
• Reinstatement to the position that the employee most
recently had after the expiry of the leave subject to a
limited exception when employment ends solely for
reasons unrelated to the leave (i.e. plant closure, true
elimination of the position, etc.). In the event that the
former position no longer exists, a comparable job with
at least the same wages as the former job must
be provided.
c) Minimum Wage
The ESA sets the minimum wage for most Ontario
employees at $7.75 per hour as of February 1, 2006.
On February 1, 2007, that minimum wage is set to
increase to $7.80 per hour. There are numerous exemptions from the minimum wage requirements, and several
classes of employees have different prescribed minimum
wage entitlements.
d) Hours of Work and Overtime
The ESA sets limits on the hours of work and provides for
overtime pay entitlements. As with the other employment
standards, there are certain exemptions from these provisions.
For the majority of Ontario employees, employers are
not permitted to allow employees to work more than
48 hours in a work week, or more than eight hours in a
work day (unless the employer has established a regular
work day of more than eight hours). Generally, employees
will be entitled to receive overtime of at least one and
one-half times the employee’s regular rate for every hour
worked, in a week, over 44 hours.
There are also legal rules which permit employees
to enter into overtime averaging agreements with their
employer as well as rules that allow an employer to apply
to the government for excess hour approvals.
e) ESA—Termination of Employment
The ESA prescribes minimum notice periods that apply to
all employees in Ontario who have had more than
3 months of service with an employer. These are
minimum requirements only, and, as noted below, the
courts have a broad discretion to award damages for
wrongful dismissal which will exceed the statutory
minimums standards. The minimum length of notice
required for an individual termination is determined by
an employee’s length of service as follows:
LENGTH OF SERVICE 3 months but less than 1 year
1 year but less than 3 years
3 years but less than 4 years
4 years but less than 5 years
5 years but less than 6 years
6 years but less than 7 years
7 years but less than 8 years
8 years or more
NOTICE
REQUIREMENT
1 week
2 weeks
3 weeks
4 weeks
5 weeks
6 weeks
7 weeks
8 weeks
Although notice or pay in lieu of notice is not required
where the termination is for cause (i.e., if the employee
has been guilty of willful misconduct or neglect of duty
which has not been condoned by the employer), it is very
difficult for an employer to successfully establish that the
employee’s conduct was such as to preclude them from the
statutory minimums.
The law on “mass” or “collective” terminations applies
to terminations of 50 or more employees in Ontario, in
the same four week period. Once this threshold is reached,
the employer has additional obligations, such as giving
special notice to the Ministry of Labour as well as
additional notice to the employees who will be
terminated. In such circumstances, all employees,
regardless of their length of service, are entitled to
expanded notice, as follows:
NUMBER OF
EMPLOYEES TERMINATED 50-199 200-499
500 or more
NOTICE
8 weeks
12 weeks
16 weeks
All employment benefits provided by the employer must
be maintained during the applicable notice period. In
addition to statutory notice, there are statutory
requirements for the payment of severance pay to
employees in two circumstances, as follows:
1. when fifty or more employees have their employment
terminated by an employer in a period of six months
or less, and the terminations are caused by the permanent discontinuance of all or part of the business of the
employer at an establishment; or
2. when one or more employees have their employment
terminated by an employer with a “payroll” in Ontario of
$2.5 million or more.
Should either of these factors be met, the employer
must pay severance pay to each employee who has been
employed for five or more years. Severance pay is
calculated as one week per year of service (including the
first five) to a maximum of 26 weeks. In addition, the
statute requires that a pro rata calculation be made for
partial years of service.
8.3 Common Law Termination Entitlements
In Ontario, in the absence of a written employment
contract with an enforceable termination provision, an
employee who is terminated without cause is entitled to
“reasonable notice,” or pay in lieu of such notice, inclusive of the minimum ESA entitlements (discussed above).
Courts have used a variety of factors to determine what
reasonable notice is. An employee’s position, length of
service, salary and age are the main factors which a court
will take into account. It is also relevant whether or not an
employee was induced from prior secure employment. In
Ontario, reasonable notice has been found to be as high as
27 months. Additionally, if a Court finds that an employer
acted in bad faith, or committed an independent actionable wrong, the amount of damages could be increased. If
successful, the affected employee will also be able to recover
an amount in respect of his or her legal costs.
Employees who successfully bring a common law claim
for wrongful dismissal will be entitled to recover pay in
lieu of reasonable notice of termination. This is calculated
by reference to the reasonable notice period and includes
all of the employee’s cash compensation and the cost of
benefit continuation throughout the reasonable
notice period.
Specific termination provisions contained in a written
contract of employment will govern in place of the
common law obligations, as long as the Courts do not
find the provisions unreasonable. The employee cannot
waive the statutory rights provided for in the ESA and
any contractual provision purporting to do so will be
rendered void.
Ontario Ministry of Labour
Occupational Health and Safety Branch
Tel: 1-800-268-8013
Tel: 416-326-7770
Fax 416-326-7761
Ontario Ministry of Labour
Office of Employer Advisor
Tel: 1-800-387-0774
Tel: 416-327-0020
Fax: 416-327-0726
Ontario Human Rights Commission
Tel: 1-800-387-9080
Tel: 416-314-4500 or 416-326-9511
Fax: 416-326-9520
8.4 Ontario Labour Relations Act (Trade Unions)
Trade unions represent the concerns of employees vis-àvis the employer. In Ontario, unions are not mandatory.
Unions seeking to represent employees must apply to the
labour board for certification in accordance with the
relevant provisions of the Ontario Labour Relations Act.
Certification, for the most part, is sought and granted on
a plant-by-plant basis. There are exceptions to this
requirement that are specific to the construction industry
that will not be discussed here.
The Ontario Labour Relations Act establishes the
requirements for collective bargaining and collective
agreements and requires certain mandatory provisions
such as a no-strike and no-lockout provision for the life of
The Essential Guide 17
the agreement. Bargaining during the life of the agreement
is rare on any issue. A system of dispute arbitration to
settle disagreements arising during the term of
the agreement is also mandatory. Disputes regarding unfair
labour practices, certification, decertification, etc. are
handled by the Ontario Labour Relations Board.
8.5 The Ontario Human Rights Code
The Ontario Human Rights Code prohibits discrimination
in employment on a number of grounds including, but
not limited to, the following: race, ancestry, place of origin,
colour, ethnic origin, citizenship, creed, sex, sexual
orientation, age, record of offences, marital status, family status and disability. Moreover, there is a prohibition
against harassment in employment. Employees with a
discrimination claim will go to the Ontario Human Rights
Commission for redress. The Commission will investigate the complaint; both parties could ultimately end up
appearing before the Human Rights Tribunal of Ontario.
8.6 Other Legislation
Ontario has enacted a number of other statutes that govern or influence the employment relationship. Several of
these statutes are described below.
The Workplace Safety and Insurance Act provides for
compensation from an employer and province funded
insurance scheme in the event that a worker is injured in
the course of his/her work. Payment into this scheme is
mandatory for the majority of employers. The rate of
premiums will vary depending on the rate group and
classification of the employer’s work. New employers
should contact the Ontario Workplace Safety and Insurance
Board and inquire about the necessity and process
for registration.
The Occupational Health and Safety Act establishes
multiple obligations on the part of employers with respect
to ensuring a safe workplace. Employers are required to
adhere to specific standards, and could face regulatory
fines (or even imprisonment) for breaching this legislation.
It is the employer’s obligation to take all reasonable
precautions to protect the health and safety of its workers.
The regulations passed under the Ontario Occupational
Health and Safety Act contain many specific responsibilities which are imposed on employers to ensure that their
workplaces are safe for employees (e.g., where applicable,
regulations concerning toxic substances, hazardous
equipment and person protective gear). Also, employers
in Ontario that regularly employ 20 or more workers are
responsible for establishing and maintaining a Joint Health
and Safety Committee. The committee is required to meet
once every three months and has certain other powers.
The Pay Equity Act requires that employers abide by
the concept of equal pay for work of equal value. It applies
to all public sector employers and to any other private
18 Establishing a Business in Ontario
sector employer which employs ten or more employees.
Employers must assess the value of work being performed
by individuals in different jobs in order to ensure that
employees are receiving equal compensation based upon
the assessed value of their employment. Employers must
achieve pay equity within their establishment (determined
by geographic location). Comparisons must be made in
each establishment between female job classes and male
job classes in terms of both compensation and the value of
the work performed.
In Ontario, privacy legislation does not currently apply
to employee information, however it is expected that the
Government will introduce such legislation in the near
future. Such legislation will govern the collection, use and
disclosure of employee personal information.
9
Immigration
Considerations
9.1 General Considerations
Canada’s immigration system is generally administered
pursuant to two federal statutes and their associated
regulations, the Immigration and Refugee Protection Act
(Immigration Act) and the Citizenship Act.
An application for entry to Canada will vary depending on a number of factors, including the nature of the
visit, the duration of stay, and the applicant’s citizenship.
In addition, if a foreign national has resided or sojourned
in a “medically designated” country for at least six months
within the year immediately prior to seeking entry into
Canada, and is seeking to enter Canada for more than six
consecutive months, the foreign national may be required
to undergo certain medical examinations.
Depending on the purpose and duration of the visit,
foreign nationals may enter Canada under different visa
categories such as tourist, business visitor or temporary worker
categories. Foreign nationals who intend on staying in Canada
permanently must apply for permanent resident status.
It should be noted that the Immigration Act and
Regulations replaced the previous immigration legislation as of June 28, 2002. The Immigration and Refugee
Protection Act and Regulations are aimed at improving
efficiency in Canada’s immigration system. This legislation
includes a number of provisions to facilitate the entry of
skilled foreign workers and family unification.
Citizenship and Immigration Canada
Web: www.cic.gc.ca
9.2 Visitors to Canada
a) Temporary Resident Visas
The requirement of a temporary resident (visitor) visa for
entry to Canada depends on the foreign national’s
citizenship. Please contact the Canadian visa post in your
country, or visit the Citizenship and Immigration Canada
website for a list of countries that are exempt from the
temporary resident visa requirements.
b) Business Visitors
Foreign nationals who qualify for entry into Canada as
business visitors will not require work permits. However,
there are many limitations on the types of activities that a
business visitor can engage in. Generally, Business visitors
are described as foreign nationals who seek to engage in
international business activities in Canada without directly
entering the Canadian labour market. Their primary source
of remuneration must remain outside Canada.
Mexican and U.S. citizens may rely on the provisions
of the North American Free Trade Agreement (NAFTA),
which provides for the admission of Mexican and U.S.
citizens under the category of “Business Visitor.” Similarly,
under the Canada-Chile Free Trade Agreement (CCFTA),
Chilean citizens may qualify as business visitors. Citizens of
nations that are members of the General Agreement
on Trade in Services (GATS) may also qualify for entry
into Canada pursuant to the business visitor provisions in
that agreement.
Usually, business visitors are representatives of foreign
businesses and seek to enter Canada to explore investment
opportunities or meet with Canadian companies. Canada’s
business visitor provisions provide that the following
persons qualify as business visitors (assuming all other
requirements for the business visitor category are satisfied):
foreign nationals purchasing Canadian goods or services
for a foreign business or government, or receiving training
or familiarization services in respect of such goods or services; foreign nationals receiving or giving training within
a Canadian parent or subsidiary of their foreign employers,
where the production of any goods or services is incidental;
and foreign nationals representing a foreign business or
government for the purpose of selling goods for that
business or government, if the foreign national is not
engaged in making sales to the general public in Canada.
Foreign nationals may also qualify as business visitors
if they are entering Canada for after-sales service to repair,
service or provide familiarization services on commercial
or industrial equipment or machinery, including computer
software that is sold/leased to a Canadian entity, provided
these services are part of the original or extended sales/lease
agreement, warranty or service contract. Such workers
should have documentation to show that the services being
provided are part of the original agreements. Similarly,
Mexican and U.S. citizens who qualify for entry under the
after-sales service provisions of NAFTA, and Chilean
citizens who qualify for entry under the after-sales service
provisions of CCFTA, are processed as business visitors
and will therefore, not require work permits.
Depending on the business visitor’s citizenship, a
temporary resident visa may still be required although a
work permit may not be required.
9.3 Temporary Work in Canada—Work
Permits and Confirmation of Job Offer
Requirements
Generally, applying for a Canadian work permit is a
two-step process. First, Canadian employers wishing to hire
foreign workers must first submit a “Temporary Foreign
Worker Application” to the local Human Resources and
Social Development Canada Centre (HRSDC). The local
HRSDC office will assess the offer of employment and
provide an opinion regarding whether the employment of
the foreign worker in Canada will likely have a neutral or
positive effect on the Canadian labour market. The local
HRSDC officer will consider a number of factors including,
whether: (i) the work is likely to result in direct job creation
or job retention for Canadian citizens or permanent
residents; (ii) the work is likely to result in skills and knowledge creation or transfer for the benefit of Canadian citizens
or permanent residents; (iii) the work is likely to fill a labour
shortage; (iv) the wages and working conditions offered are
sufficient to attract Canadian citizens or permanent
residents to, and retain them in, that work; (v) the employer
has made, or has agreed to make, reasonable efforts to hire
or train Canadian citizens or permanent residents; and (vi)
the employment of the foreign national is likely to affect the
settlement of any labour dispute in progress or the
employment of any person involved in the dispute.
In addition to providing evidence of any local
recruitment efforts, employers should also make HRSDC
officials aware of any significant benefits potentially accruing
to the company or Canada as a result of hiring the foreign
worker. In addition to the above paragraph, such benefits
could include the attraction of a worker with exceptional
skills, the ability to enhance the knowledge and skill level of
existing employees through training and/or, increased
corporate competitiveness directly attributable to the
addition of the foreign worker.
Once the “Labour Market Opinion” is issued by the local
HRSDC office for a particular position, the foreign worker
who is offered the position must then apply for a work
permit at a Canadian visa office abroad.
Certain foreign nationals such as U.S. citizens and persons
lawfully admitted into the United States for permanent
residence, may apply for a work permit at a port of entry.
Pursuant to Canada’s Immigration Act and Regulations,
a Temporary Foreign Worker Application may be submitted
to the local HRSDC with respect to a single job offer made
by an employer, or a number of job offers made by a single
employer or a group of employers.
The Essential Guide 19
The labour market opinion process may be streamlined
if the foreign worker qualifies under any existing sectoral
agreements. Due to a shortage of qualified workers in
certain industries, HRSDC and interested stake-holders have
negotiated sectoral agreements to facilitate the temporary
entry of foreign workers in certain sectors/occupations such
as agricultural, film and entertainment, and academic
sectors/occupations. The employer does not have to obtain a
job-specific job approval for each foreign national.
There may be occasions when a sector or employer may
have specific needs that cannot be met by the Canadian
labour market. HRSDC, as part of their foreign worker
policy, may entertain, on a pilot basis, the entry of a large
number of foreign workers, provided that there are
employment contracts between the employer and the
foreign workers and that there is on-going monitoring
of activity under the agreements.
Other examples of these programs are:
9.4 Temporary Work in Canada – Work
Permits without HRDC Confirmations
Of interest to businesses expanding or establishing
their operations in Canada would be the following
categories which require a work permit, but exempt
employers from the need to obtain an HRSDC Labour
Market Opinion.
a) Intra-Company Transfers
Under Canada’s Immigration Regulations, executives,
managers, and persons in positions of “specialized
knowledge” transferring from a foreign employer to
an affiliate, branch, subsidiary or parent of the foreign
employer, may qualify for work permits without HRSDC
approval.” Specialized knowledge is generally defined as
advanced or specialized knowledge of the company’s
product, service, research equipment, techniques or
management not readily available in Canada. The
transferees must have been employed in an executive,
managerial or specialized knowledge position for at least
one year within the previous three years before transferring
to an executive, managerial or specialized knowledge
position at the Canadian operation.
Under the intra-company transferee provisions of
GATS, NAFTA and CCFTA, executives, managers, and
persons in positions of “specialized knowledge,” may
qualify for work permits without HRSDC approval. As
well, to qualify under the intra-company transferee
provisions under GATS, NAFTA and CCFTA, foreign
workers must also meet citizenship requirements and
requirements related to length of employment with the
foreign employer. In addition, certain business sector
requirements apply under GATS. The length of time for
which a work permit may be issued varies depending on
the circumstances.
20 Establishing a Business in Ontario
b) Significant Benefit to Canada
The “significant benefits” provision in Canada’s
Immigration Regulations is usually used in situations not
otherwise covered. A work permit under this category is
issued where it is clear that the foreign worker will
perform work that could create or maintain significant
social, cultural or economic benefits or opportunities for
Canadian citizens or permanent residents.
c) Reciprocity
The “reciprocal benefits” provision in Canada’s Immigration
Regulations is usually used where it can be demonstrated
that specific reciprocal employment opportunities exist for
Canadian citizens or permanent residents in the foreign
worker’s country. For example, a Canadian company that
maintains an exchange program whereby Canadian
employees are relocated abroad to a subsidiary or parent
company may benefit from this provision to transfer foreign
staff to its Canadian operations.
d) NAFTA/GATS/CCFTA
Under the NAFTA, U.S. or Mexican citizens seeking entry
to develop and direct the operations of a U.S. or Mexican
enterprise located in Canada may qualify for work permits
if the individuals have made, or are making, a substantial
investment,. Employees may also qualify if they are
executives, managers, or in possession of skills essential to
the operations in Canada. Chilean citizens may qualify
for work permits pursuant to similar provisions under
the CCFTA.
9.5 Other Requirements
In addition to meeting the requirements outlined above,
temporary foreign workers, and their accompanying family members, may be required to pass immigration medical examinations and security screenings imposed by the
Immigration Act and Regulations. An individual who does
not meet these requirements may apply for a “Temporary
Resident Permit.” Whether such a permit will be issued
depends on the severity of the individual’s medical problem
or criminal record.
Fast Facts
The familiar green plastic garbage bag was
invented by Henry Wasylyk from Winnipeg and
Larry Hansen, a Union Carbide employee in
Lindsay, Ontario.
9.6 Permanent Residents Status
Foreign nationals interested in residing in Canada
permanently must apply for permanent resident status.
An individual may apply under a number of categories
including the Family Class Category, the Skilled Worker
Class Category or the Business Class Category. Certain
provinces/territories have also established their own
Provincial Nominee Programs.
Regardless of the category, applicants must also pass
medical and criminal checks (unless an exemption applies).
a) Family Class Applicants
To qualify under the Family Class category, the applicant
must be sponsored by a qualifying close relative who is
currently living in Canada as a citizen or a
permanent resident.
b) Skilled Worker Class Applicants
Skilled Worker Class applicants seeking permanent
admission to Canada are assessed according to a point
system. Weight is given to a number of factors including
the applicant’s age, education, work experience, language
skills, arranged employment, and adaptability.
c) Business Class Categories
Business applicants seeking permanent admission may apply
as Entrepreneurs, Investors or Self-employed individuals.
Entrepreneurs must demonstrate “business experience”
through having had a management and ownership role in
a qualifying business as measured by number of employees,
sales, net income and equity share. Additionally, they must
meet a minimum net worth requirement, and after becoming
a permanent resident, undertake to create and manage a
business in Canada that will meet employee, sales, net income
and equity shares criteria.
Investors must also demonstrate business management or ownership experience and meet a minimum
net worth requirement. They must also make an investment of $400,000 for a minimum five-year period in the
Immigrant Investor Fund.
Self-employed applicants must demonstrate relevant
experience and the ability to create their own employment
that will make a significant contribution in cultural
activities or athletics, or with the intention of purchasing
and managing a farm in Canada.
9.7 Retaining Permanent Resident Status
Permanent residents of Canada must be physically in
Canada for at least 730 days in every five-year period in
order to retain their immigration status.
However, certain exceptions may apply, thus, allowing
longer absences from Canada. For example, a permanent
resident who is absent from Canada for more than 1,095
days within any five-year period may retain his or her
permanent resident status if he or she was absent from
Canada to accompany a spouse, common-law partner, or
parent (if the permanent resident is a child who is under
the age of 22), who is a Canadian citizen. Similarly, a
permanent resident may retain status if he or she could
not meet the residency requirement because he or she
was working outside Canada on a full-time basis for a
Canadian business or the Canadian government. Another
exception applies if the reason for the absence was that the
permanent resident was accompanying a Canadian
permanent resident spouse, common-law partner, or parent (if the permanent resident is a child who is under the
age of 22), who was working outside Canada on a full-time
basis for a Canadian business or the Canadian government.
Immigration officers may also consider whether sufficient
humanitarian and compassionate grounds exist to justify the
retention of permanent resident status in cases where the an
individual has not met the residency requirement.
9.8 Permanent Resident Cards
and Travel Documents
Generally, all permanent residents traveling outside
Canada and planning to return to Canada are now
required to present a valid permanent resident card in
order to return to Canada.
10
Competition Act
10.1 General
Canadian “anti-trust” law is contained primarily in the
federal Competition Act which includes both criminal
(such as price-fixing) and non-criminal (such as exclusive
dealing) provisions.
Criminal offences include conspiracy, bid-rigging,
discriminatory and predatory pricing, price maintenance
and certain misleading advertising or deceptive marketing
practices. The sanctions for criminal offences involve fines
and prison sentences. Individuals as well as companies may
be charged. Prohibition orders (court orders forbidding certain
activities) and interim injunctions (temporary court orders
forbidding certain activities until a hearing is held) may also
be obtained from the court. The Competition Act creates a civil
right of action with respect to all conduct which violates the
criminal provisions of the Act.
The Competition Act also regulates deceptive telemarketing practices, disclosure in relation to promotional contests,
The Essential Guide 21
double ticketing, pyramid selling, “bait-and-switch” selling
(where a product is advertised at a bargain price, and a reasonable supply is not available) and selling above an advertised price.
Non-criminal reviewable matters include misleading
advertising, abuse of dominant position, refusal to deal,
consignment selling, exclusive dealing, tied selling, market
restriction and delivered pricing. These practices are not per
se illegal, but depending on the circumstances, may lead to
an order prohibiting their continuation. These matters, when
referred by the Commissioner, are reviewed by the Competition Tribunal under non-criminal law standards and may
be resolved by the issuance of an order by the Tribunal terminating the restrictive practice. A right of private access has
also been established that in limited circumstances permits
private parties to bring actions directly before the Tribunal.
Mergers are also regulated, and the Competition Act
requires pre-notification of significant merger transactions.
Competition Bureau
Tel: 613-957-3172
Fax: 613-957-3170
Web: www.competitionbureau.gc.ca
Email: compbureau@ic.gc.ca
11
Advertising and
Labelling of Goods
for Sale in Canada
11.1 Introduction
There is considerable legislation, at both the federal and
provincial levels, relating to the advertising and labelling of
prepackaged consumer products. The primary federal labelling
statute is the Consumer Packaging and Labelling Act (CPLA).
Labelling, advertising and other regulatory requirements are
also found in customs and importation laws, in the federal
Competition Act, as well as in product-specific legislation,
such as the Food and Drugs Act, the Hazardous Products Act,
the Telecommunications Act, the Radiocommunication Act, and
the Textile Labelling Act. In addition, labelling is impacted by
product liability law, which imposes a general duty to warn
against reasonably foreseeable harms.
11.2 Consumer Packaging and Labelling Act
(CPLA) and Regulations
The CPLA and regulations apply, with some exceptions,
to all prepackaged products intended for sale to
consumers. The label of a prepackaged product must
generally contain the following mandatory information:
22 Establishing a Business in Ontario
a) Net Quantity Declaration
The net quantity must be declared on the principal
display panel of the product in English and French, in
metric units, or by numerical count, depending on the
product. It must generally be declared by volume where
the product is a liquid or gas and by weight where the
product is a solid. The declaration must be accurate
within prescribed tolerances.
b) Product Identity Declaration
The identity of the prepackaged product must be shown
on the principal display panel in both English and
French, using the common or generic name or the
function of the product.
c) Dealer Declaration
The term “dealer” can include a manufacturer, processor
or producer, an importer or packer, or a distributor or
retailer of a product. The dealer’s name and the address
of its principal place of business must be shown in
English or French, anywhere on the outer surface of
the package except the bottom, with some exceptions.
The address must be sufficient to allow a postal delivery
to be made.
In the case of an imported product, the name and
address must be preceded by the words “Imported by”
or “Imported for” (and their French equivalent) unless
the geographic origin of the product is stated. There are
specific requirements for the size of the type in which
information required by the CPLA must be shown.
11.3 Imported Goods Regulations
In addition to the CPLA, the marking of many goods
imported into Canada is governed by the Marking
of Imported Goods Regulations, which require specified
goods imported into Canada to be marked in English
or French to indicate the country of origin. The markings are required to be conspicuous, legible, sufficiently
permanent, and capable of being easily seen during
ordinary handling of the goods. Different marking rules
apply depending on whether goods are imported from
NAFTA or non-NAFTA countries.
­­11.4 Product Specific Legislation
a) The Food and Drugs Act and Regulations
Detailed regulations under the Food and Drugs Act (FDA)
apply to all drugs, natural health products, medical devices,
cosmetics and human foods sold or advertised in Canada:
• Drugs (both prescription and over-the-counter),
natural health products and certain medical devices
require premarket authorization and licensing, and all
are subject to specific packaging, labelling and
advertising requirements.
•Cosmetics are subject to packaging and labelling
requirements, ingredient restrictions, and limitations
on claims; in addition, cosmetics must be registered
within 10 days of their date of first sale in Canada, and
cosmetic labels are required to carry an ingredient
listing beginning in fall 2006.
• Foods must comply with applicable compositional,
packaging, advertising and labelling standards; prepackaged foods must carry ingredient listings,
disclose certain nutrient information in a Nutrition
Facts table, and comply with detailed requirements for
nutrient and permitted health claims.
The FDA prohibits a person from packaging, labelling,
selling or advertising any regulated product in a manner
that is false, misleading or deceptive, or that is likely to
create an erroneous impression regarding its character,
value, quantity, composition, merit or safety. Any product
that is not packaged or labelled as required by regulations
is deemed to be misleading or deceptive in violation
of the FDA.
b) Hazardous Products
The Hazardous Products Act regulates packaging and labelling requirements for potentially hazardous consumer
products such as bleaches, cleaners, solvents, petroleum
distillates and other household products, as well as for
certain commercial/industrial products that may be
hazardous to users in the workplace. Manufacturing and
design standards for consumer products such as cribs,
hockey helmets, tents and car seats are also prescribed.
c) Electrical Equipment
Electrical equipment sold in Canada is subject to
standards published by the Canadian Standards
Association (“CSA”). Although the relevant standards are
voluntary, many of them have been adopted by statutory
reference as mandatory requirements under provincial
electrical safety codes.
Pursuant to telecommunications and radiocommunication laws, telecommunications terminal equipment,
wireless devices, and a wide variety of electrical products
that emit radio interference are required to conform
to standards and marking requirements established by
Industry Canada. In some cases, certification or
registration is also required.
d) Textiles
A disclosure label must be affixed to most consumer
textile articles sold in Canada providing mandatory
information relating to fibre content in English and
French, as well as the identity of the dealer. Ontario and
certain other provinces also have legislation requiring
labelling of upholstered or stuffed articles. A person who
inserts and covers stuffing must be registered under
the legislation.
11.5 Standards
The Standards Council of Canada (SCC) coordinates and
oversees the National Standards System. The SCC
accredits Canadian standards organizations (including the
Canadian General Standards Board, Canadian Standards
Association, Underwriters’ Laboratories of Canada, and
the Bureau de normalisation du Québec – see Associations
for contact information), and also approves National
Standards of Canada.
Standards Council of Canada
Tel: 613-238-3222
Fax: 613-569-7808
Web: www.scc.ca
Email: info@scc.ca
The SCC maintains a database of standards developed
by Canadian standards organizations. International
Standardization Organization (ISO) standards,
American National Standards Institute (ANSI) and
other US-developed standards are often referenced in
the Canadian standards database or incorporated in
Canadian standards.
Unless specifically mandated by law or regulation,
there is no obligation for a Canadian manufacturer
or importer to comply with the voluntary system of
Canadian standards. However, where there is a statutory
obligation for a product to meet a standard, the product
must bear a label issued by the appropriate standards organization in order to be sold.
11.6 Advertising
The federal Competition Act prohibits representations to
the public that are false or materially misleading, are not
based on adequate and proper tests, contain false
testimonials or make misstatements as to the ordinary
price of a product. Additional requirements are contained
in the Ontario Consumer Protection Act and other
provincial trade practices legislation.
The Canadian Code of Advertising Standards
and related guidelines administered by Advertising
Standards Canada (ASC), an industry self-regulatory
body, establish extensive advertising standards and
guidance, including with respect to comparative
advertising and the use of survey data to substantiate
advertising claims.
11.7 Contests/Sweepstakes
Product labels and advertising are often used to promote
contests and sweepstakes, which are subject to various
disclosure requirements under the Competition Act as well as
restrictions under the federal Criminal Code. Among other
requirements, there must be adequate and fair disclosure of
The Essential Guide 23
certain information, including the number and approximate
value of prizes, the regional allocation of prizes, if any, and any
facts known to the advertiser that materially affect the chances
of winning. Marketing materials must not deceptively imply
that an individual has won a prize, and the ultimate
distribution of prizes must not be unduly delayed.
Due to restrictions under the federal Criminal Code,
no purchase (or equivalent) can be required to enter
a contest or sweepstakes that involves any element of
chance. In addition, since games of pure chance are
prohibited as illegal lotteries, contests and sweepstakes
must contain a skill requirement (usually an arithmetical
question). Additional requirements apply to contests and
sweepstakes open to residents of Québec.
11.8 Québec Laws
Goods sold in or into the province of Québec are required
to comply with the French language labelling requirements
of the Charter of the French Language (Charter). The
Charter requires that all inscriptions on a product, its
packaging and any accompanying documents be in French,
or if in French and another language, then with the French
appearing in at least equal prominence to any other
language. Specific rules apply to websites, signage, computer
software, and toys and games.
Québec laws also impose other unique requirements,
including restrictions on advertising to children, registration,
payment and reporting requirements for contests and
sweepstakes, special rules for premium offers, Québec-specific
rules governing false or misleading representation, and beverage
recycling laws.
12
Protection of Intellectual
Property Rights
In Canada, the first person to file a patent application
has priority. A patent application is not open to public
inspection until 18 months after the application filing
date, or where a Paris Convention priority claim is made,
until 18 months after the priority filing date. A straightforward patent application with no objection from the
Patent Office will likely take between two and three years
to issue to registration.
12.2 Trade-marks
Trade-mark registration may be based on actual use of the
mark in Canada, proposed use of the mark in Canada, use
and registration of the mark in a foreign country, or
making the mark known within Canada. A trade-mark
is registered after the application clears the Trade-marks
Office examination procedure and it is either unopposed,
or opposition to the application has been overcome.
Registration is valid for a period of 15 years. Renewals for
additional 15-year periods may be effected upon payment of
a renewal fee. Assuming no difficulties in the Trade-marks
Office, and no opposition initiated by third parties,
registration will likely occur within 18 to 24 months from the
date the application is filed. Upon application by an adverse
party, a registration may be removed from the Register if it is
not in commercial use within three years before the date of the
cancellation notice issued by the Registrar.
In Canada, a trade-mark may be licensed or transferred
regardless of registration. It is not required that a
trademark licensee be recorded on the Trade-marks
Register as a registered user of the registered trade-mark.
Under the more liberal system in place since 1993, the use
of a trade-mark by a licensee, whether or not the
trade-mark is registered, has the same effect, and is
deemed always to have had the same effect, as use by the
trade-mark owner on condition that the licence allows the
owner to exercise direct or indirect control over the
character or quality of the wares or services associated
with the mark.
12.3 CA Domain Names
12.1 Patents
Patents are limited monopoly rights created by the
Government of Canada that confer on an inventor the
right to exclude others from making, using or selling
an invention in Canada. Canadian patents issuing from
patent applications that are filed after October 1, 1989,
remain in effect from the date of grant until up to 20
years from the application date. No renewals are possible.
Under Canadian patent law, patents can protect the process, machine, manufacture or composition of matter, or
any improvement thereof, provided that these are new,
useful and unobvious. Patents must be registered under
the Patent Act.
24 Establishing a Business in Ontario
a) Recent Developments The “.CA” domain name regime was substantially
changed in 2000 when responsibility was transferred to
the Canadian Internet Registration Authority (CIRA). .CA
domain names must be acquired through a certified CIRA
Fast Facts
Roughly 250,000 people immigrate to Canada
each year and about half—representing over a 100
language groups—choose to live in Ontario.
Registrar. Registrations last for one to 10 years. There are
Canadian presence requirements to obtaining a .CA domain
name. This means, generally speaking, that .CA domain
names are available only to Canadian entities
(e.g. individuals, partnerships and corporations) that satisfy
various Canadian business requirements. Non-Canadian
entities may apply for a domain name only if the domain
name is registered as a trade-mark or official mark in the
Canadian Trade-marks Office. There are no restrictions on the
number of .CA domain names a particular entity may own.
b) Dispute Resolution
Through the CIRA Domain Name Dispute Resolution
Policy, a dispute resolution process enables the quick and
inexpensive resolution of disputes involving .CA domain
name registrations. A proceeding is initiated by the
submission of a Complaint by a complainant with a provider in accordance with the Resolution Rules. The complainant must, at the time of submitting a complaint, satisfy the
various requirements for registrants in respect of the domain
name that is the subject of the proceeding unless the complaint relates to a trade-mark registered in the Canadian
Intellectual Property Office and the
complainant is the owner of the trade-mark.
A registrant can submit to a CIRA dispute resolution
proceeding if a complainant asserts that: (a) the registrant’s
.CA domain name is confusingly similar to a mark in which
the complainant had rights prior to the date of registration
of the domain name and continues to have such rights;
(b) the registrant has no legitimate interest in the domain
name; and (c) the registrant has registered the domain name
in bad faith. Although disputes involving .CA domain
names can be determined by this process, disputes may also
be resolved in the local courts. A list of certified Registrars
and the rules and regulations regarding .CA domain names
are available at www.cira.ca.
Canadian Internet Registration Authority
Tel: 613-237-5335
Fax: 613-237-0534
Web: www.cira.ca
Email: info@cira.ca
12.4 Industrial Designs
Industrial design protection is given to any new and original pattern, shape, configuration or ornamentation (or any
combination of such features) applied to any article. Only
the aesthetic aspect of a design is protectible. The principle
of construction or the mere function of the article is not.
An industrial design must be filed within 12 months from
the date of its first public disclosure in Canada. Registration
is valid for five years from the date of registration, and
may be renewed for one further five-year term. No further
renewal is possible. For a design to be fully protected after
registration under the Industrial Design Act, the capital “D”
in a circle, together with the name or the usual abbreviation
of the name of the proprietor must appear on all or substantially all the articles to which the registration pertains, or on
the article’s labels or packaging. A straightforward industrial
design application with no objection from the Industrial
Design Office will likely issue to registration in 12 to 18
months from the application date.
12.5 Copyrights
In Canada, copyright exists in original musical, dramatic,
artistic and literary works, including computer programs,
and in records and other means by which sounds are
mechanically reproduced. In most cases, copyright exists
for the life of the author, plus 50 years. Copyright arises
from creation of a work, and does not depend upon
registration pursuant to the Copyright Act, although
registration creates certain presumptions in favour of the
registered owner, and facilitates the collection of damages
against infringers.
An application to register copyright in a work may be
filed at any time during the term of its existence.
A copyright application is likely to proceed to registration
within two months of the date of filing. A copy of the work
is not required to be filed with the copyright application.
Upon registration, a certificate of ownership is issued. This
certificate is regarded as prima facie evidence that the
person registered is the owner of the copyright. Copyright
can be assigned, and any interest in the copyright can be
licensed. No such assignment or licence is valid, however,
unless it is in writing and signed by the owner of the right.
An author’s moral rights in a copyrighted work can be
waived, however, they cannot be assigned.
12.6 Integrated Circuit Topography Act
The Integrated Circuit Topography Act (ICTA) protects the
topography (i.e. the design) of integrated circuit products.
Registration under the ICTA grants the registrant the
exclusive right to reproduce, import or commercially exploit
all or any substantial part of the topography of the
integrated circuit product, and to manufacture, import or
commercially exploit an integrated circuit product
incorporating all or any substantial part of such topography.
This protection lasts to the end of the tenth calendar year
either from the date of filing or the date of first commercial
exploitation, whichever is the earlier. No renewal is possible.
A topography may be registered if:
• it is original;
• an application is filed before or within two years of the
date on which the topography is first commercially
exploited; and
• the topography’s creator is a Canadian national or is an
individual or legal entity that produces topographies or
integrated circuit products in Canada.
The Essential Guide 25
Under the ICTA, reciprocal protection exists for foreign
nationals whose countries afford Canadian nationals
substantially equal protection.
12.7 Trade Secrets/Confidential Information
As with patents, trade secret protection is available for
qualifying processes, machines and formulae. Trade secrets
may also protect customer lists and know-how. Unlike
patents, which must be registered, trade secrets need not
(and, indeed, cannot) be registered. Trade secret protection
is automatic and can last forever. However, trade secrets
must be kept secret in order to be protected. Once a trade
secret becomes publicly known, its owner can no longer
restrain its unauthorized use by third parties. Accordingly,
trade secret protection is not appropriate if a competitor
can demonstrate that the “secret” is discoverable by reverse
engineering. In order to sue for a breach of confidence or
for unauthorized use of trade secrets, the information in
issue must be secret and must have been imparted with an
obligation of confidentiality.
Industry Canada
Canadian Intellectual Property Office
Tel: 819-997-1936
Fax: 819-953-2476
Web: cipo.gc.ca
13
Real Property
13.1 Non-Resident Persons and Corporations
In Ontario, with very few exceptions, there are no
restrictions upon non-resident persons or corporations
owning real property. Upon the sale of property, however,
there may be withholding tax issues to be addressed.
13.2 Governing Law
The laws governing real property law in Canada, including
in Ontario, generally fall within the jurisdiction of the provinces and follow the principles of the English common law.
An exception to provincial regulation is that certain federal
statutes govern real property used for federal facilities.
13.3 Real Property Interests/Title
Real property interests include fee simple ownership,
leasehold interests, the creation of charges and mortgages
as security for obligations, easements and rights-of-way.
26 Establishing a Business in Ontario
Ontario maintains two public real property registration
systems where public notice of virtually every nature
dealing with real property may be registered. The first is
the Registry System, which essentially provides an orderly
method of recording title by allowing parties to give notice
of interests claimed in land, and which is in the process of
being phased out. The second is the Land Titles System,
which guarantees that title is vested in the party named on
the parcel register and which permits claims for
compensation to the Land Titles Assurance Fund for errors
in the system. Failure to register notice of any interest will,
in most cases, jeopardize the priority of such unregistered
interest as against a registered interest. In many instances,
the form and manner of registration of a notice of a real
property interest is prescribed by regulation.
Generally, a purchaser or lender will retain a lawyer to
carry out various title and off-title searches to determine
ownership and the existence and priority of registrations.
Title insurance, which protects against certain losses
suffered due to title related problems, is becoming
increasingly popular and may be arranged by the lawyer.
Different ownership structures are available, including
separating legal and beneficial ownership, and the
appropriate structure is often determined based upon
tax efficiency.
13.4 Real Property Interests as Security
Real property ownership and leasehold interests may be
mortgaged or charged by the owner as security for the
repayment of money and the performance of contractual
obligations. Priority among several creditors holding
security upon the same real property interest is generally
governed by the sequence of registration of these security
interests in the public registration system, unless changed
by agreement among the creditors. Enforcement
procedures against solvent debtors or owners are generally
regulated by provincial statutes, whereas enforcement
procedures against insolvent debtors or owners are largely
regulated by federal statutes.
Ontario Ministry of Consumer and Business Services
Real Property Registration Branch
Tel: 416-314-4880
Fax: 416-314-4878
13.5 Land Use Regulation
The regulation of land-use (zoning) is also governed by
provincial statute. However, much of the power to
formulate and enforce land use policies has been delegated
by statute to local municipalities, subject to an appeal process to a provincial body known as the Ontario Municipal
Board. Virtually all land in Ontario is subject to landuse regulation. As such, approvals and permits must be
obtained for most any type of development of or improvement to real property.
13.6 Leasing
The prevailing practice among most landlords in Ontario
is to enter into a binding offer to lease with a tenant and
then prepare a full lease, reflecting the business terms of
the offer, for execution by the tenant. Such offers to lease
are in most instances fully binding contracts and will limit
a tenant’s ability to negotiate the lease; accordingly, we
recommend that such offers be reviewed by legal counsel
prior to execution or, alternatively, be conditional upon
review by legal counsel. Generally, commercial tenants will
be required to pay a specified base or minimum rent, often
calculated based upon the square footage of the premises,
plus the tenant’s proportionate share of operating costs and
property taxes applicable to the lands and building.
Generally, registration of a notice or caveat of lease is
recommended to maintain the priority of a tenant’s leasehold
interest. In the event the leased premises are subject to a
prior mortgage, it is advisable for a tenant to insist that the
holder of such mortgage agree not to disturb the tenant’s
quiet enjoyment of the leased premises if such holder enforces its rights under the mortgage against the landlord.
13.7 Land Transfer Tax
The acquisition of real property gives rise to provincial
land transfer tax. Land transfer tax is applicable to the
conveyance of both registered (legal) ownership and
unregistered (beneficial) ownership as well as to long-term
leases in excess of 50 years.
13.8 Sales Taxes
Subject to certain exceptions, the federal value-added
Goods and Services Tax (GST) is calculated upon the
purchase price of real property; however, a GST-registered
purchaser will not be required to pay GST on closing, but
rather is required to self assess the applicable GST, against
which it may claim input tax credits. The net effect is that
no GST is actually paid in most commercial real estate
transactions. In certain provinces, “harmonized” provincial
sales taxes are also applicable.
13.9 Property Taxes
Property tax is levied at the municipal level and rates,
usually calculated upon the value of the property, vary by
municipality and by use.
14
Environmental
Legislation
14.1 Introduction
Corporations seeking to establish a business in Ontario
should be aware of the various layers of environmental
legislation that may impact the establishment and
continued operation of a facility in this province. Federal
environmental legislation typically deals with matters of
national concern but will invariably have a local effect.
Provincial environmental legislation deals primarily with
the day-to-day management of environmental matters by
all persons within the province. Local or municipal levels
of government regulate matters such as sewer use.
14.2 Air Quality
Air quality within the province of Ontario is governed
by the Environmental Protection Act (EPA) and its regulations. Under the EPA, it is a general offence to discharge
any contaminant into the air but the EPA allows for some
controlled discharges governed by a document called a
Certificate of Approval.
The Certificate of Approval lists all pieces of
equipment to which it relates and often sets out terms and
conditions relating to the operation of the equipment
for all emissions of “contaminants” from the facility.
Contaminants are anything which cause or are likely to
cause an adverse effect to the natural environment. A
contaminant is defined broadly in the EPA and includes
such things as odour, heat, sound and vibration as well
as gases. Failure of the facility to comply with the terms
and conditions listed in the Certificate of Approval is a
violation of the EPA. Hence, it is important to confirm
that the existing facility has the required Certificates
of Approval and is operating in compliance with those
Certificates.
If the corporation intends to construct a new facility,
or alter, extend or replace any plant, structure or
equipment that may discharge a contaminant into the
outdoor air, it must apply to the Ontario Ministry of the
Environment (MOE) for a Certificate of Approval before
commencing work. This application includes describing
the equipment and processes that are expected to exhaust
emissions outside of the facility as well as estimating the
concentrations of contaminants that might be emitted.
The Essential Guide 27
14.3 Water Quality
Every person has a duty not to discharge any substance
into water, including surface waters, which may impair
water-quality. For purposes of environmental regulation,
a “person” includes a corporation. Every facility that
discharges contaminated water as part of its operation,
must obtain a Certificate of Approval similar to that
required for air emissions. These approvals contain terms
and conditions which must be followed by the certificate
holder. Typically, these terms and conditions relate to the
treatment, sampling analysis and volume of water being
discharged from the facility.
In addition to provincial requirements, local
governments may require compliance with sewer use
by-laws and pollution plans which limit and measure the
amount of chemicals and other matter which may be put
into the local sewer system.
14.4 Hazardous Wastes
The transportation of hazardous wastes falls within both
federal and provincial transportation of dangerous goods
legislation and environmental legislation. Federal
legislation applies to all shipments by air, ship or rail to
destinations in other provinces or countries. Ontario
legislation applies to transportation of hazardous wastes
within the borders of this province.
Facilities in Ontario that collect, produce, handle or
store hazardous waste are required to register as a
“generator” with MOE. When waste is moved from a
generator facility to another site, the generator must
retain a provincially licensed waste hauler. A document
known as a “manifest" lists the amount and type of waste
picked up from the generator site and accompanies the
waste while in transit. Final disposal may take place only
at a licensed waste facility and such disposal is confirmed
to MOE by the receiver of the waste. Completed
manifests are sent to MOE to confirm compliance with
environmental regulation.
There are a number of other requirements that must
be met. For example, when there are accidental discharges
of contaminants, persons in control must notify the
government “forthwith” and must do everything practical
to restore the natural environment. There are specific
obligations on directors and officers to act with
“reasonable care” to prevent causing or permitting
contaminants to be released into the environment.
Ontario Ministry of the Environment
Environmental Assessment and Approvals Branch
Tel: 416-314-8001
Fax: 416-314-8452
Web: www.ene.gov.on.ca
28 Establishing a Business in Ontario
15
Debtor-Creditor
Law in Ontario
15.1 Security in Personal Property
Ontario has a personal property security regime that
governs issues relating to the taking of security in personal property. The relevant statute is the Personal Property
Security Act, or “PPSA.” It is similar to Article IX of the
U.S. Uniform Commercial Code. The PPSA provides a
comprehensive set of rules to govern the rights of creditors
and debtors when personal property is used as collateral to
secure payment of a debt or performance obligation. It also
provides for a province-wide computer-based registry system
for the perfection by registration of security interests in
personal property such as equipment, inventory, accounts
receivable, motor vehicles and intangibles.
The types of transactions to which the PPSA normally
applies include all types of extensions of credit, loans,
general security agreements, chattel mortgages, conditional
sale agreements, debentures, trust deeds, assignments of
book debts or accounts receivable, equipment leases,
consignments by way of security, share pledges and
assignments of rents.
In addition to setting out various procedures, including
enforcement procedures, the PPSA also provides a
mechanism for establishing (i) priorities among creditors;
and (ii) rights and obligations of lenders and borrowers.
To ensure priority over other creditors and over a trustee
in bankruptcy, a creditor must follow the steps set out in
the PPSA, including in most cases the filing of a registration
form. Priority among secured creditors is generally
determined by the time of filing of the registration form.
One exception is the supplier of specific goods (or lender of
funds to acquire specific goods) who is entitled to superior
priority treatment with respect to those goods, provided
certain steps are followed.
Ontario Ministry of Consumer and Business Services
Personal Property Security Registration Branch
Tel: 416-325-8847
Fax: 416-325-0487
15.2 Insolvency Generally
Bankruptcy and insolvency are matters of federal
jurisdiction, and are generally dealt with by two federal
statutes, the Bankruptcy and Insolvency Act (BIA) and the
Companies’ Creditors Arrangement Act (CCAA). The CCAA
is available solely in connection with matters of reorganization for corporations with over $5 million in debt.
15.3 Creditor Priorities in Insolvency
a) Secured Creditors
A secured creditor is a person or company holding a
mortgage, pledge, charge, lien or privilege over the
property of the debtor as security for a debt. The property
constituting the collateral can be real or personal property.
Real property security, notably mortgages, must be
registered under land registration statutes. Personal
property security in Ontario is registered under the PPSA,
as set out above.
With respect to property, a first to file priority
resolution mechanism generally applies as between secured
creditors. Failure to register in the case of non-possessory
security interests will result in the trustee in bankruptcy
taking the collateral free of any security interest.
Upon the bankruptcy of a debtor, that debtor’s secured
creditors are not prevented from enforcing their security, however, this must be contrasted with the situation
under the reorganization sections of the BIA and under
the CCAA. If reorganization under either of these laws is
underway pursuant to court supervision, the secured
creditors will generally be prevented from acting while the
plan of reorganization is being formulated.
b) Preferred Creditors and Government
(Crown) Claims
Various tax and other obligations owed by debtors to
federal and Ontario government authorities are accorded
the status of security interests, trusts, or liens by various
statutes. The priority of such claims, relative to secured
creditors and other creditors, will be dependent on the
wording of the statute creating the claim, and on whether
or not the debtor has been adjudged bankrupt.
Certain categories of creditors are accorded preferential
treatment in the event of bankruptcy. The BIA provides a
distribution hierarchy. At the present time in corporate
bankruptcies, trustees fees, a government levy, and unpaid
wages of up to $2,000 per employee are to be paid before
unsecured creditors. Municipal taxes, up to three months’ rent
in arrears and accelerated rent of not more than three months
after the date of bankruptcy are also accorded a preference.
Recently the federal government enacted the Wage
Earners Protection Program. This altered some of the
priority provisions of the BIA. In particular, up to $3,000
of wages is given a priority over all creditors including
secured creditors. The statute establishing the Wage Earners
Protection Program is not yet in force. It is unknown when
it will be proclaimed in force.
c) Unsecured Creditors
Unsecured claims are those which do not enjoy any security
or preference. These normally will include suppliers, utility
arrears, execution creditors, etc.
On a bankruptcy or receivership (but not a reorganization), Ontario suppliers have the right to reclaim goods
supplied within 30 days before the date of the bankruptcy
or receivership. The goods must be in the possession of the
trustee or receiver, be identifiable, in the same condition as
they were on delivery, and not have been resold to others.
These latter conditions can make it difficult for an unpaid
supplier to benefit from this right to reclaim.
15.4 Bankruptcy/Liquidation
Under the BIA, either the debtor or its creditors may
initiate bankruptcy proceedings through application to the
Ontario Superior Court of Justice.
In an involuntary bankruptcy in Ontario, the court
must find that the bankrupt company committed one of a
list of acts of bankruptcy before a “receiving order” (i.e. the
order declaring the debtor to be bankrupt) is made against
the debtor. The typical act of bankruptcy is “generally
failing to pay debts when they are due” but acts of
bankruptcy also include fraud and the granting of
preferences to other creditors.
Upon a receiving order being made, the trustee in
bankruptcy, subject to certain exceptions, becomes the
owner of all property of the debtor. The trustee is a
private sector individual (most often an accountant)
licensed by the Superintendent of Bankruptcy. The
trustee is charged with the responsibility of gathering the
assets and liquidating them with a view to making an
equitable distribution to the creditors in accordance with
the prescribed priorities and pro rata within each class
of creditors.
Property of the debtor divisible among the creditors
does not include property held in trust for others. Title
retention clauses in agreements in Ontario, however, are
considered to be security interests subject to the
requirements of registration under the PPSA.
Office of the Superintendent of Bankruptcy
Tel: 613-941-1000
Fax: 613-941-2862
Web: strategis.ic.gc.ca/sc_mrksv/bankrupt/engdoc
/superint.html
Office of the Superintendent of Bankruptcy
Ontario office
Tel: 613-995-2994
Fax: 613-996-0949
15.5 Reorganization
a) Nature of Reorganization
Reorganization for a corporate debtor is possible under
both the BIA and the CCAA. Under a reorganization
scheme, the debtor is afforded protection from all of its
creditors pending acceptance of a plan of reorganization.
Following acceptance, this plan will govern the legal
relations between the parties.
The Essential Guide 29
b) Under the BIA
To commence a reorganization under the BIA, the debtor
must make a formal proposal to the creditors or give
notice of intention to do so, followed by a proposal plan
within 30 days. Once a proposal or notice has been
delivered, a stay of proceedings is imposed on all creditors,
including secured creditors. Under the stay, no agreement
may be terminated or amended, no claims for accelerated
payment may be made, and no enforcement steps may be
taken. Contracts must continue in the usual manner; however, lenders are not required to advance further funds.
Suppliers are entitled to immediate payment on goods
supplied post-filing.
If no proposal is made within the time provided
by the BIA, or if the debtor’s proposal is not approved
by creditors, then the debtor is automatically adjudged
bankrupt and the effective date of the bankruptcy is the
date that the notice of intention or proposal was filed.
16.2 Law of Contract
c­ ) Under the CCAA
Under the CCAA, the debtor applies to the court for
protection while formulating a plan of reorganization for
submission to the creditors. A “monitor” is required to
oversee the debtor, assist with the plan preparation, and
report to the court and the creditors from time to time. The
existing auditor of the company may act in this capacity.
Unlike the BIA, the scope of the stay of proceedings is
specified in the court order under which the proceeding
commences. Some of these orders can be quite complex.
Creditors may ask the court to alter the order.
Because CCAA reorganizations are reserved for larger companies, the reorganization itself tends to be pursued through
a negotiated “arrangement” with the largest creditors and the
creditor committees. The creditors themselves may put forward
their own plans for reorganization of the company as well.
Once the reorganization plan has been voted on and accepted
by the creditors, the court will consider approving the plan.
The law of negligence provides a remedy to those damaged by conduct that falls below accepted standards. In
product liability law, this means that persons responsible
for bringing a product to market may be held responsible
for damages caused that arise from their negligent actions.
To sue in negligence, a claimant must show that (i) the
other party owed it a duty of care in connection with the
product, (ii) the other party’s actions or omissions in
connection with that product breached the applicable
standard of care, (iii) the other party’s breach caused an
injury that is not too remote, and (iv) the claimant’s own
conduct does not bar recovery.
In negligence, there is no need for a contractual
relationship between the injured party and the proposed
defendant. Liability is extended to virtually anyone that
contributes to the design or manufacture of a product or
its components, including those with intermediate care
and control. Thus, anyone who might reasonably come
into contact with a product may be, including distributors.
16
Contract law operates on enforceable promises created by the
exchange of offer and acceptance. Unlike negligence, liability
under contract law does not require proof of fault. It requires
only proof that a warranty or condition was broken and that
damage ensued. Warranties and conditions are the promises
made by a contract. They typically address things like quality,
performance, and durability, and can be express or implied.
Breach of contractual warranty is often the remedy of
choice pursued in cases resulting from defective or
dangerous products. An injured consumer or business may
usually sue only for breach of warranty where he or she
has a contractual relationship with the party being sued.
In most cases, a contractual relationship exists between the
manufacturer and the seller of the goods.
16.3 The Law of Negligence
16.4 Strict Liability
Product Liability Law
16.1 Introduction
Canadian product liability law is found in the law of
contract and negligence. Under Canadian contract law,
manufacturers and others may be liable for damage caused
by breach of contractual warranties and conditions. Under
Canadian negligence law, anyone that carelessly designs,
manufactures or distributes a product may be held
responsible for any resulting damage or injury.
30 Establishing a Business in Ontario
In some countries, manufacturers are held strictly liable
for injuries caused by their defective products. In other
words, they are liable for damages caused by their
products even in the absence of carelessness. While
Canada has not adopted this approach, those doing
business in Canada should be aware of related trends.
First, if a product is dangerous, the court may hold that
the manufacturer owes a higher standard of care. Second,
the court might impose liability by presuming negligence
where a product causes an injury unless the manufacturer
can rebut that presumption. Third, if a manufacturer
breaches a statutory standard, the Courts may impose
liability without proof of negligence or an express
contractual undertaking.
16.5 Negligent Misstatement
Manufacturers and distributors may be held liable for
false statements they make about their products or
services to consumers. This will occur if the consumer
relies on the statement and is adversely affected by it.
In other words, where someone makes an assurance
regarding a product, the buyer or consumer is entitled to
rely upon it. Canadian courts may impose liability where
statements are fraudulently or negligently made or where
those statements are held to be a warranty. To avoid
liability, the substance of any statements about a product
or service must be true.
16.6 Duty to Warn
Manufacturers also have a duty to warn consumers of
the dangers associated with their products, even when
their products are properly designed and manufactured.
This duty embraces dangers that the manufacturer knows
about and dangers that the manufacturer should know
about. One can satisfy this duty by providing warnings
that identify the nature of the danger. Most
manufacturers fulfill this duty by including proper
warnings in their product literature and affixing
prominently placed warnings on the product itself.
A manufacturer’s duty to warn continues after the
product is sold. Therefore, manufacturers must advise
any person reasonably at risk immediately upon learning
of any dangers or risks. Where practicable, proper buyer
records should be kept with a view to communicating this
information promptly. Manufacturers often also use the
media to communicate post-sale warnings to
the public.
Ontario Ministry of Government Services
Tel: 416-326-8555
Web: http://www.cbs.gov.on.ca/mcbs/english/
consumer_info.htm
Fast Facts
The Toronto Stock Exchange (TSX) consistently
ranks as one of the world’s top exchanges and is a
global leader in the mining, oil and gas sectors, as
well as the second largest in Life Sciences.
17
Information
Technology Law
17.1 Electronic Commerce
While there is no broad legislation governing electronic
commerce in Canada, both the federal and provincial
governments have introduced legislation to foster greater
certainty in the use of electronic means of communication.
Ontario’s Electronic Commerce Act 2000, which came
into force in October 2000, addresses issues such as
electronic contracts, electronic signatures (including digital
signatures), and electronic evidence.
Legal principles relating to electronic commerce also
continue to emerge through the application and
interpretation of existing law in areas such as securities,
contracts, taxation, criminal law (including libel and
fraud), payment systems, banking, sale of goods and
services, consumer protection, intellectual property
and privacy.
17.2 Communications Law
In Canada, as in most other countries, the Internet and
other “new media” have flourished in an environment of
little or no direct regulation. A 1999 Canadian
Radio-Television and Telecommunications Commission
(CRTC) decision confirmed that Internet content would
generally not be subject to regulation in Canada under the
existing Telecommunications Act and Broadcasting Act. In
particular, telecommunications-analogous new media
services provided over the Internet, such as Internet telephony, are generally not subject to regulation. Similarly,
broadcasting, as defined in the Broadcasting Act,
does not encompass new media services that are primarily
alphanumeric and text-based, or services that are
sufficiently “customizable” by individual users that they do
not constitute transmission “to the public”. Other Internet
services that do constitute broadcasting have been formally
exempted from regulation, although it is possible that
changes in technology could prompt a revised approach to
Internet regulation in the future.
Canadian Radio-Television and
Telecommunications Commission
Tel: 819-997-0313
Fax: 819-994-0218
Web: www.crtc.gc.ca
The Essential Guide 31
17.3 Jurisdiction in Cyberspace
Jurisdiction generally depends on establishing a nexus
between the persons or actions to which a law or regulation
applies. In the context of disputes, it requires finding a
territorial connection between a court and the dispute
in question. The breadth of this discretion is constrained
in two ways. First, a “real and substantial connection” is
required between the cause of action and the jurisdiction.
Second, the jurisdiction in question must not be forum non
conveniens, i.e. relatively less appropriate to hear a dispute
than another jurisdiction.
With respect to the Internet, some courts in Canada
have followed a “passive vs. active” test that looks to the
predominant type and level of activity taking place on a
web site. “Passive” sites that simply provide information
will generally not be subject to laws or courts outside their
own jurisdiction. On the other hand, “active” sites that
involve a high level of interaction with users could in theory
fall under the authority of courts in any jurisdiction from
which the site can be accessed.
Canada has arranged for the reciprocal enforcement of
judgments given by provincial courts within its borders, and
normally enforces foreign judgments in exchange for the
promise of similar treatment. This is unlikely to change in
the context of cyberspace.
17.4 Privacy
Most Canadian companies, and many foreign companies
that deal with Canadian individuals or entities, are likely to
be subject to or affected by federal or provincial privacy laws
in Canada. These privacy laws apply only to the collection,
use and disclosure of information that may be used to
identify an individual (Personal Information). Furthermore,
such legislation applies only to the privacy of an individual,
and does not extend to the privacy of an organization, such
as a corporation.
At the federal level, the Canadian privacy law landscape
has changed significantly since 2001 due to the
implementation of new federal private sector privacy
legislation, the Personal Information Protection and Electronic
Documents Act (PIPEDA). PIPEDA came into force in
three phases:
i) Effective January 1, 2001, PIPEDA took effect for all
private sector organizations that: (i) are subject to Canadian
federal regulation (e.g., interprovincial transportation,
banking, telecommunications and broadcasting companies)
and/or (ii) transfer Personal Information between provinces
or internationally, where the information itself is the object of
the transaction and payment or “consideration” is provided;
ii) On January 1, 2002, the requirements and foregoing
application of PIPEDA extended to personal health
information; and
32 Establishing a Business in Ontario
iii) On January 1, 2004, application of PIPEDA also
extended to the collection, use or disclosure of Personal
Information in the course of “commercial activity” by
organizations in any province, unless that province has
enacted legislation which the federal government has deemed
to be “substantially similar” to PIPEDA. It should be noted,
however, that due to the constitutional division of powers,
PIPEDA only applies to businesses if they are
federally regulated entities.
Since January 1, 2004, provincial private sector privacy laws
in the provinces of British Columbia, Alberta and Québec
have been recognized as being “substantially similar” to
PIPEDA. Accordingly, this legislation will apply in lieu of
PIPEDA in relation to the collection, use or disclosure of
personal information by provincially regulated private sector
entities in these provinces. Likewise, the Ontario Personal
Health Information Protection Act has also been deemed
substantially similar to PIPEDA, and will apply in the province of Ontario with respect to collection, use and
disclosure of personal health information by private sector
healthcare providers in Ontario. As such, PIPEDA is the
privacy law of general application in all provinces besides
B.C., Alberta and Québec; including in Ontario, except with
respect to personal health information and private sector
healthcare providers.
18
Government Services
to Business
18.1 Government of Ontario
Online access to all Ontario government ministries,
programs and services can be found at: www.gov.on.ca.
The Ontario Government telephone directory is available
online at www.infogo.gov.on.ca. The KWIC Index to Services,
a “key word” guide to Ontario government programs and
services, is also available online at www.serviceontario.com.
Selected provincial ministries and agencies of interest to new
and existing businesses are listed below alphabetically.
AGRICULTURE, FOOD AND RURAL AFFAIRS
Provides information on Ontario’s food industry including legislation and guidelines, publications, statistics, fact
sheets, and marketing resources.
Tel: 1-888-466-2372 (Ontario only)
Tel: 519-826-3100
Web: www.omafra.gov.on.ca
Food Industry Competitiveness
Provides access to comprehensive profiles of Ontario’s
food clusters, product development and commercialization
strategies, and various federal, provincial and
municipal contacts.
Tel: 519-826-4190
Fax: 519-826-4333
FINANCE
Manages the financial affairs of Ontario and also provides
information on the Ontario economy and Ontario’s
tax statutes.
Tel: 905-433-6000
Fax: 905-433-6777
Web: www.fin.gov.on.ca
ECONOMIC DEVELOPMENT AND TRADE
Provides information, advice and resources on investment
and exporting.
Tel: 1-866-668-4249
Tel: 416-325-6666
Fax: 416-325-6688
Web: www.ontariocanada.com
Financial Services Commission of Ontario
Regulates pensions, insurance, loan corporations, trust
companies, credit unions, caisses populaires, co-operatives
and mortgage brokers in Ontario.
Tel: 1-800-668-0128
Tel: 416-250-7250
Fax: 416-590-7070
Web: www.fsco.gov.on.ca
Business Immigration
Provides advice and information to immigrant entrepreneurs
interested in starting or investing in a business in Ontario.
Tel: 416-325-6777
Fax: 416-325-6653
Web: www.2ontario.com/bi/home.asp
International Trade
Provides information and advice on market entry strategies,
export opportunities, trade shows and events, and guidance
on doing business in international markets.
Tel: 416-314-8200
Fax: 416-314-6509 / 2766
Web: www.investandtradeontario.com
Ontario Investment and Trade Services
Provides information on selected federal and provincial
government programs of interest to individuals starting
up, investing in or expanding a business in Ontario, as
well as community profiles, key industrial sectors, and site
selection tools.
Tel: 1-800-819-8701 (North America)
Fax: 416-360-1817
Web: www.investandtradeontario.com
ENVIRONMENT
Delivers and enforces environmental legislation and controls.
Tel: 1-800-565-4923
Tel: 416-325-4000
Web: www.ene.gov.on.ca
Environmental Assessment Approvals Branch
Assesses environmental impact of development or building
projects before they take place.
Tel: 1-800-461-6290
Tel: 416-314-8001
Fax: 416-314-8452
Web: www.ene.gov.on.ca/envision/env_reg/ea/
english/index.htm
Tax Revenue Division / Regional Tax Offices
Administers Ontario's tax statutes, tax credit and
benefit programs.
Web: www.trd.fin.gov.on.ca
(A comprehensive set of links to specific Ontario tax programs
and to regional tax offices is available at:
www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_44657_1.html)
GOVERNMENT SERVICES
Responsible for developing and maintaining a variety
of services for businesses in Ontario
Tel: 1-800-268-1142
Tel: 416-326-8555
TTY: 416-326-8566
Web: www.gov.on.ca/MGS
Alcohol and Gaming Commission
Regulates and administers the Liquor Licence Act and
Gaming Control Act relative to businesses, casinos and
charity events.
Tel: 1-800-522-2876
Tel: 416-326-8700
Company Information
Database of registered companies and corporations.
Tel: 1-800-361-3223
Tel: 416-314-8880
Fax: 416-314-4852
Web: www.cbs.gov.on.ca/mcbs/english/company_info.htm
Ontario Business Connects
Provides business registration and renewal services, change
of business information, and subscription services to business
information databases.
Tel: 1-800-565-1921
Fax: 416-314-5125
Web: www.cbs.gov.on.ca/obc
The Essential Guide 33
Personal Property Security Registration
Online service for registering or researching security interests
or liens.
Tel: 1-800-267-8847
Tel: 416-325-8847
Fax: 416-325-0487
Real Property Registration Branch:
Provides access to property records in Ontario and an
automated land registration system.
Tel: 416-314-4880
Fax: 416-314-4878
Service Ontario
Provides business information by industry or topic, and
provides various support programs and services.
Tel: 1-800-267-8097
Tel: 416-326-1234
TTY: 416-325-3408
Web: www.serviceontario.ca/english/business/yourbusiness.htm
Technical Standards and Safety Authority (TSSA)
Administers and enforces public safety laws under Ontario’s
Technical Standards and Safety Act.
Tel: 1-877-682-TSSA (8772) (Ont)
Tel: 416-734-3300
Web: www.tssa.org/regulated
LABOUR
Oversees occupational health and safety standards,
employment rights and responsibilities, and labour relations.
Web: www.labour.gov.on.ca
Employment Standards
Sets out and enforces the minimum employment standards.
Tel: 1-800-531-5551
Tel: 416-326-7160 (GTA)
TTY: 1-866-567-8893
Web: www.labour.gov.on.ca/english/es/index.html
Occupational Health and Safety Branch
Provides program services related to workplace health and
safety issues and enforces the Occupational Health and
Safety Act.
Tel: 1-800-268-8013
Tel: 416-326-7770
Fax 416-326-7761
Web: www.labour.gov.on.ca/english/hs/index.html
Office of the Employer Advisor (OEA)
Provides advice on various topics including mediation,
negotiation, and representation to employers relative to
workplace safety and insurance.
Tel: 1-800-387-0774
Tel: 416-327-0020
Fax: 416-327-0726
Web: www.employeradviser.ca
34 Establishing a Business in Ontario
Workplace Safety and Insurance Board
Administers workers’ compensation in Ontario.
Tel: 1-800-387-0750
Tel: 416-344-1000
TTY: 1-800-387-0050
Fax: 416-344-4684
Web: www.wsib.on.ca
SMALL BUSINESS AND ENTERPRISE
Provides advisory services and information to
small-and-medium sized businesses, with an emphasis
on assisting young entrepreneurs.
Tel: 1-866-668-4249 or 1-866-ONT4BIZ
Tel: 416-325-6666
Fax: 416-325-6688
Web: www.sbe.gov.on.ca/ontcan/sbe
TOURISM
Provides information and assistance for identifying and
developing tourism opportunities, business planning, and
marketing strategies.
Tel: 416-326-6894
Fax: 416-327-2506
Web: www.tourism.gov.on.ca
18.2 Government Of Canada
Access to all Government of Canada offices can be found
at: www.canada.gc.ca. The federal telephone directory can
be found at www.canada.gc.ca/directories/direct_e.html. A
directory of all federal government websites can be found at:
www.canada.gc.ca/depts/major/depind_e.html. Selected
federal departments and agencies of interest to new and
existing businesses are listed below alphabetically.
AGRICULTURE & AGRI-FOOD CANADA
Oversees and administers policy and programs relating to
Canada’s food industries, and provides economic research
and market information.
Web: www.agr.gc.ca
Canadian Food Inspection Agency
Delivers inspection programs and enforces standards related
to food safety and quality.
Tel: 613-225-2342
Fax: 613-228-4550
Web: www.inspection.gc.ca
CANADA BORDER SERVICES AGENCY
Administers and enforces legislation affecting the movement
of people and goods to and from Canada.
Tel: 1-800-461-9999
Web: www.cbsa-asfc.gc.ca/menu-e.html
CANADA-ONTARIO BUSINESS SERVICE CENTRE
Provides information on government services, programs and
regulations related to starting up or running a business.
Tel: 416-775-3456
Fax: 416-954-8597
Web: www.cbsc.org/ontario
CANADA REVENUE AGENCY
Provides tax information on various business sectors
including construction; daycare; e-commerce; farmers; film;
fishers; non-resident operations; self-employed; and small
businesses in general.
Tel: 1-800-959-5525
Web: www.cra-arc.gc.ca
Business Registration Services
A one stop, on-line, self serve business registration service to
obtain a business number and to open GST / HST, register
payroll deduction and import / export accounts.
Tel: 1-800-959-5525
Web: www.businessregistration.gc.ca
Goods and Services Tax/ Harmonized Sales Tax
Comprehensive links by topic to GST / HST resources
Web: www.cra-arc.gc.ca/tax/business/topics/gst/menu-e.html
CANADIAN RADIO-TELEVISION AND
TELECOMMUNICATIONS COMMISSION (CRTC)
Regulates and licences Canada’s broadcasting and
telecommunications.
Tel: 819-997-0313 (Client Services)
Fax: 819-994-0218
Web: www.crtc.gc.ca
FOREIGN AFFAIRS AND INTERNATIONAL
TRADE CANADA
Provides information on trade policy and agreements.
The Export and Import Controls Bureau
Authorizes and monitors the import / export of goods
affected by quotas and tariffs or goods designated as
restricted or dangerous.
Tel: 1-877-808-8838
Tel: 613-944-1265
Web: www.international.gc.ca/eicb/menu-en.asp
HEALTH CANADA
Regulates the use of consumer products and delivers a
range of programs and services relating to environmental
health and protection.
Web: www.w.hc-sc.gc.ca
EXPORTSOURCE
An on-line resource and access point to all trade-related
government departments.
Tel: 1-888-811-1119
Web: www.exportsource.ca
INDUSTRY CANADA
Provides information on policies, programs and services
available to new and existing businesses.
Tel: 1-800-328-6189
Tel: 613-954-5031
Web: www.ic.gc.ca
Canada Business
Information service for existing businesses and start-up
entrepreneurs on government services, programs and
regulatory requirements.
Tel: 1-888-576-4444
Fax: 1-888-417-0442
Web: canadabusiness.gc.ca
Canadian Intellectual Properties Office (CIPO)
Administers and processes copyright, patents, trademarks
and industrial designs.
Tel: 819-997-1936
Fax: 819-953-7620
Web: www.cipo.gc.ca
Competition Bureau
Promotes and maintains fair competition including
competitive pricing, product choice and quality issues.
Also administers the Consumer Packaging and Labelling Act
prohibiting false or misleading representations and sets out
specifications for mandatory label information.
Tel: 1-800-348-5358
Tel: 819-997-4282
Fax: 819-997-0324
Web: www.competitionbureau.gc.ca
Corporations Canada
Provides business incorporation and related services.
Tel: 1-866-333-5556
Tel: 613-941-9042
Fax: 613-941-0601
Web: www.corporations.ic.gc.ca
Strategis – Canada’s Business and Consumer Web site
Provides extensive business information resources on
companies, industrial sectors, import and export statistics.
Tel: 613-954-5031
Web: www.strategis.ic.gc.ca
Environmental and Workplace Health
Provides information and advice on environmental factors
affecting workplace health including air, noise, pollution,
contaminants, and radiation.
Web: www.hc-sc.gc.ca/ewh-semt/index_e.html
The Essential Guide 35
XIX. ASSOCIATIONS
Listed below is a list of selected business and financial
associations that may be of interest to new and existing
businesses in Ontario.
Canadian Association of Management Consultants
Tel: 416-860-1515
Fax: 416-860-1535
Web: www.camc.com
Canadian Bankers Association
Tel: 1-800-263-0231
Tel: 416-362-6092
Fax: 416-362-7705
Web: www.cba.org
Canadian Franchise Association
Tel: 1-800-665-4232
Tel: 905-625-2896
Fax: 905-625-9076
Web: www.cfa.ca
Certified General Accountants Association of Ontario
Tel: 1-800-668-1454
Tel: 416-322-6520
Web: www.cga-ontario.org
Canadian General Standards Board
Tel: 1-800-665-2472
Tel: 819-956-0425
Fax: 819-956-5740
Web: www.pwgsc.gc.ca/cgsb/home/index-e.html
Canadian Manufacturers and Exporters
Tel: 905-672-3466
Fax: 905-672-0853
Web: www.cme-mec.ca
Canadian Standards Association
Tel: 416-747-4000
Fax: 416-747-4149
Web: www.csa.ca
Canadian Venture Capital Association
Tel: 416-487-0519
Fax: 416-487-5899
Web: www.cvca.ca/about
Institute of Chartered Accountants of Ontario
Tel: 1-800-387-0735
Tel: 416-962-1841
Fax: 416-962-8900
Web: www.icao.on.ca
36 Establishing a Business in Ontario
Law Society of Upper Canada
Tel: 416-947-3300 / 1-800-668-7380
Fax: 416-947-5263
Web: www.lsuc.on.ca
Ontario Real Estate Association
Tel: 416-445-9910
Fax: 416-445-2644
Web: www.orea.com
Retail Council of Canada
Tel: 416-922-6678
Fax: 416-922-8011
Web: www.retailcouncil.org
Society of Management Accountants of Ontario
Tel: 416-977-7741
Fax: 416-977-6079
Web: www.cma-ontario.org
For more information about investment opportunities in
Ontario please visit: www.investandtradeontario.com
For further information about Baker & McKenzie
please visit: www.bakernet.com
Or contact us at:
Tel: 416-360-4647
1-800-819-8701 (toll-free North America)
00-800-46-68-27-46 (U.K. and Europe)
Or contact us at:
Tel: 416-863-1221
Fax: 416-863-6275
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