Canada: Operating a Business

Sole propietorship

Number of partners: 1 person.
Capital (max/min): No minimum capital.
Shareholders and liability: Liable for all debts and obligations.

Partnership

Number of partners: 2 persons or more. All partners must be Canadians to be a Canadian partnership.
Capital (max/min): Personal investment but no minimal capital required.
Shareholders and liability: Personally liable for all the debts and obligations of the company.

Limited liability partnership

Number of partners: 2 persons and more.
Capital (max/min): CAD 1,000
Shareholders and liability: Unlimited for general partners and limited for limited partners.

Private joint-stock company

Number of partners: One or more partners/shareholders. All partners must be Canadians.
Capital (max/min): No minimum capital required.
Shareholders and liability: Limited to share capital for all shareholders.

Cooperative

Number of partners: Minimum three directors.
Capital (max/min): No minimum capital required.
Shareholders and liability: Limited liability.

Limited partnership

Number of partners: person financially involved.
Capital (max/min): No minimum required.
Shareholders and liability: The liability of the silent partner to the company and creditors is limited to the amount of capital he invested.

Business Setup Procedures

The Competent Organisation

Registering a company can be done through the office of a notary or a lawyer. Each province has a provincial or regional office to make registering easier. Companies with a business number are registered within 10 days. In Quebec this is the department of the Enterprise Registrar.

For Further Information

Consult the Doing Business website, to know about procedures to start a Business in Canada.

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

SEDAR - Database with company documents

Recovery Procedures

Principle

Going into receivership is possible when it is not possible to pay creditors all they are owed. First, it is advisable to call on a trustee. He will present an offer proposal to the company's creditors. Presenting a proposal stops all the legal procedures started or envisaged by ordinary creditors. It gives the company a certain leeway, allowing it to discuss its financial situation.
For further information about bankruptcy, consult the Office of the Superintendent of Bankruptcy Canada. 

Minimum Debt-to-Capital Ratio Triggering Liquidation

Proof of insolvency must be established by a trustee. See the database of the office of trustees.

Bankruptcy Laws

Bankruptcy and Insolvency Act.

Reorganization and Rehabilitation Laws

Act C-12, the act amending the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada (2005), received royal approval on 14 December 2007. The date of enforcement has not yet been decided.
To see a summary of changes in legislation, click here.

For Further Statistics

Statistics Canada

For Further Information About the Labour Market

Quebec Ministry of Labour (in French)
Ontario Ministry of Labour

Opening Hours

 

• Legal Weekly Duration

Normal hours of work are eight hours per day and 40 hours per week. The maximum weekly working time is 48 hours.

• Maximum Duration

There is no maximum. On the other hand, there is a minimum of 3 hours a day. An employer who brings in a worker must pay him for 3 hours even if he only works one hour.

• Night Hours

4 pm to 8 am

Working Rest Day

24 to 48 hours

Paid Annual Vacation

4% of salary from the 1st to the 5th year of work, and 6% after the 5th year except for the clothing industry where it is 4% for less than a year, 6% for 1 to 3 years, 8% for 3 years or more.
The equivalent number of days is as follows: 1 year's work = 5 days paid. 2nd to 5th year = 2 weeks paid. 5 years and more = 3 weeks.

Retirement Age

The Canadian government removed the age of mandatory retirement in December 2011. All Canadian provinces, with the exception of a few thousand public employees in New Brunswick, have abolished the mandatory departure to retirement. Officials and employees of enterprises under federal jurisdiction can now retire at age 70, or even later if they wish. Workers who stop at age 70 (instead of 65) receive 42% more from the Canadian Pension Plan, the public pension.

Child Labour and Minimum Age For Employment

The working age may vary according to the province. Several provinces have set the age at 18 or after the end of secondary studies. Some provinces have more flexible laws and the age is determined by the type of work and the number of hours a day.

Informal Labour Market

In 2004, "moonlighting" corresponded to about 5% of the volume of paid work and it is growing each year in spite of public awareness campaigns.

Pay

Minimum Wage

Minimum wages vary by province. As of January 1, 2019, they averaged $12.23 per hour, with a low of $11.00 per hour in Saskatchewan and a high of $14.00 per hour in Ontario (source: Canadian government).

Average Wage

As of January 2020, the average Canadian salary in 2020 was $1,050.59 per week for employees across the country – which means that the annual average salary for full-time employees is just over $54,630 per year (source: Statistics Canada).

Other Forms of Pay

• Pay For Overtime

At least one and one-half (1.5) times the regular rate of pay must be paid for hours worked during overtime.

• Pay For Rest Days Worked

Public holidays are paid double.

Social Security Costs

The Areas Covered

Employment insurance, health insurance, pensions.

Contributions

Contributions Paid By the Employer: In 2020, employer contribution to Employment Insurance (EI) is 2.21%, with a maximum contribution of CAD 1,199; Canada Pension Plan (CPP) is 5.25%, with a maximum contribution of CAD 2,898. The maximum employer contributions to the Québec Pension Plan (QPP) for 2020 are CAD 3,146, whereas for the EI the maximum contributions of CAD 911. However, they must also contribute to the Québec Parental Insurance Premium plan.
Contributions Paid By the Employee: In 2020, employee contribution to Employment Insurance (EI) is 1.58 %, with an annual maximum contribution of CAD 856; Canada Pension Plan (CPP) is 5.25%, with a maximum contribution of CAD 2,898. The maximum employee contributions to the Québec Pension Plan (QPP) for 2020 are CAD 3,146, whereas for EI the maximum contributions is CAD 650. The Quebec Parental Insurance Plan provides maternity and parental benefits in Quebec.

Competent Organization

Revenu Québec (Quebec Revenue Agency)
Canada Revenue Agency
Ontario Ministry of Health and Long-term Care
British Columbia - Medical Services Plan
New Brunswick Department of Health

Recruitment

Method of Recruitment

Companies still use adverts in newspapers or employment agencies or search engines specialized in job offers. On the other hand, applications are made more and more by Internet or fax, and there is often a first interview over the telephone followed by a face to face meeting.

Recruitment Agencies

The Canada Job Bank and the Quebec employment center are the official agencies.

Recruitment Websites

Jobboom
Canadajobs
Monster
Jobs
Workopolis

The Contract

Dispute Settlement

Social Partners

Social Dialogue and Involvement of Social Partners

Labour organisations and trade unions are very strong and well structured in Canada. Quebec is the most unionised province. Canada’s labour unions have frequently clashed with the government and corporations over the past few years. Canada has often resorted to passing “back-to-work” legislation to end labour disputes. Canada justifies introducing the legislation by claiming it is a necessary action to protect the Canadian economy.

Unionisation Rate

22.9 % of part-time workers, 31.2% of full-time workers, 30.2 % of permanent workers, 25.8 % of non-permanent workers. These rates have dropped in companies of less than 20 employees and in those of 100 to 500 employees. On the other hand, they have risen in establishments of more than 500 employees and those of 20 to 99 employees.

Labour Unions

FTQ - Quebec workers federation (in French)
CSN - Canada national federation of labor organizations and trade unions (in French)
CLC-CTC - Canadian Labor Congress
NUPGE - National Union of Public and General Employees
The Union Canada (Unifor)
CUPE - Canadian Union of Public Employees

Regulation Bodies

Employment and Social Development Canada