In a nutshell – Some Leads on doing Business in Canada
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In a nutshell – some leads on doing business in Canada.
Canada is a top destination for foreign companies and investors attracted to the country’s wealth of natural resources, stable and sound political and financial systems, and world-class infrastructure.
While Canada is an open economy and welcoming of foreign investment, there are issues that corporations and investors should keep in mind when doing business in Canada, such as the country’s two legal systems (civil and common law) and the division of legislative authority between the federal and provincial/territorial governments.
Navigating Canadian Employment Law
Employment laws in Canada are heavily regulated by both common law and federal, provincial or territorial employment and labour statutory laws.
- You must comply with the laws of each applicable jurisdiction if operating in more than one province or territory.
- Federally-regulated industries, such as banking, inter-provincial trade, or aviation, are governed by federal employment and labour laws, but must also conform to certain provincial laws.
- There are significant variations from province-to-province in relation to minimum wage, hours of work, overtime pay, statutory holidays and vacation entitlements, leaves, entitlements upon termination (there is no “at-will” employment in Canada), employment equity, human rights, worker’s compensation, privacy and basic health and safety.
Mergers & Acquisitions
The acquisition of a Canadian business is another common method of entering the Canadian marketplace.
- Private merger and acquisition transactions in Canada are typically effected by way of share purchase transactions or asset purchase transactions, tender offers, plans of arrangement (court approved transactions) or amalgamations.
Fintech Activity in Canada
Financial Technology or “Fintech” has been steadily increasing in Canada. Canada is also home to a robust payment industry with well-known publicly listed entities such as Shopify and Light speed.
In terms of regulation it is important to appreciate that Canada has both “entity-based” regulation (i.e. for banks, credit unions, trust companies etc.) and “activity-based” regulation such as for payments, lending, securities and insurance.
Privacy and Cybersecurity: Quebec’s Bill 64
Canada has enacted comprehensive federal privacy legislation that applies to the private sector and certain provinces have enacted both comprehensive and industry-specific private sector privacy legislation.
Over the next three (3) years, Bill 64 will come into force, with the majority of it taking effect on September 22, 2023. New requirements include:
- Conducting a prior privacy impact assessment (a “PIA”);
- Determining whether information communicated would receive “adequate protection” in the target jurisdiction; and
- Entering into written agreements that take into account the results of the PIAs and, if applicable, include terms to mitigate the risks identified in the PIAs.
Supply Chain, Customs and Trade
Moreover, robust internal compliance measures are extremely important given a significant uptick in regulatory review, including a spotlight on forced labour in global supply chains. Businesses operating in Canada should consider implementing policies and practices that address forced labour risk in their supply chains, to the extent such policies and practices are not already in place.
Competition and Foreign Investment
A review of mergers and acquisitions with publicly-listed Canadian targets indicates that in 2021, almost all transactions with a Competition Act closing condition required substantive comfort from the Bureau. Important amendments to the Competition Act which became law on June 23, 2022 were reviewed. Notably, these amendments increase maximum fines and penalties for those who break the law and prohibit wage-fixing and no-poach agreements between employers.
Employment-related Class Action Lawsuits in Canada
Importantly, unlike in the U.S. there is no centralized system to manage parallel proceedings and each Canadian province operates under different legislation. As a result, companies need to be aware of the complex legal regime that animates each province’s class action proceedings.
Proprietary blog of Karma Global
Collated and Compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, besides adaptation, illustration, derivation, transformation, collection and auto generation for its monthly newsletter Issue 15 of September 2023 and in case of specific or general information or compliance updates for that matter, kindly reach out to the Marketing Team – Kush@karmamgmt.com / yashika@karmamgmt.com