Canadian government regulations for business include both federal and provincial/territorial regulations. The latter regulations could vary from province/territory to province/territory. These regulations cover a wide range of topics. You could get an idea of this variety if you select ‘Regulations’ from the Business Startup Assistant page after selecting your province/territory.
On selecting Ontario provice you could see a list of 31 topics from Aboriginal Business Information to Wholesale/Retai. Under each topic, you would find multiple regulations applicable to it. Under Agriculture/Food for example, there is a list of 30 or so regulations.
One thing that becomes clear on going through the list is that applicable regulations vary from industry to industry. For example, the cattle identification program under Agriculture won’t be relevant under Aerospace. Each industry has its own peculiarities some of which might need specific legislation. Pollution and environmnetal impact differ from industry to industry, for example.
It would be impossible to look at all the business regulations in a short article like this. Instead, we focus on the universally applicable regulations. Generally, these relate to:
- Licenses and Permits
- Formation of the Business and Registrations
- Income and Sales Taxes
- Employment Laws
- Health and Safety
- Business Contracts
- Fair Trading
- Intellectual Property
Licenses and Permits
- A license from your local council to do business, any business, in an area under their jurisdicition,
- A specific license from concerned government department such as explosives licence, excise license or fishing license
Permits are needed for carrying certain kinds of business activities, such as import agent and explosives manufacture.
The best sources of information for licenses and permits applicable to your business would be your local council, chamber of commerce and CBSC office.
Formation of the Business and Registrations
In Ontario province, a small business can be organized in the forms of Sole Trader, General Partnership, Limited Partnership, Limited Liability Partnership or Corporation.
Sole Traders are proprietorships of individuals. If they do business in their own names, without adding any words, no business name registration formalities are involved. If any words are added, they too would have to register under Business Names Act.
General partnerships involve a number of persons agreeing to join in carrying on a business. The terms of agreement – management roles, profit sharing, retirement, and so on – are often written down to avoid later disputes. If the business is carried on in their own names, this form also does not need business name registration.
Sole Traders and General Partners are personally responsible for all business debts. Even their personal property can be attached by business creditors. Partners could be liable for debts incurred by other partners in the business.
Canadian government regulations for business in Ontario allows two other forms for partnership – Limited Partnership and Limited Liability Partnership. The term, Limited, indicates that the personal liability of partners are limited to what they have agreed to contribute to the business. However, in Limited Partnership, those partners who actively manage the business are still liable to an unlimited extent. However, the liability of partners who only contribute capital can be limited by agreement.
Limited Liability Partnerships are allowed only among CAs and Lawyers in Ontario. In the case of all forms of partnerships, names and relevant particulars of partners must be registered with the Ministry of Consumer and Business Services in Ontario.
Incorporation as a company allows limiting the personal liability of all members, and also large scale operations by raising capital widely. However, the formalities involved are significant. You have to check that the proposed business name is available; then you have to get an Articles of Association drafted and get it approved by the government; and finally you have to file the Articles of Association and other documents along with a filing fee.
The incorporation can be at federal or provincial level. Under Canadian government regulations for business, Federal registration protects your business name all over Canada, while provincial registration protects it only in the province. However, the fees would be higher for federal registration.
You can file incorporation documents and periodical corporate returns online at Corporations Canada Web site.
Registrations might be necessary under other regulations, such as Workplace Saftety and Insurance Board, Farm Business Registration, Petroleum Storage Tank Registration, etc. Your industry association and local chamber of commerce would be good sources for information about registration requirements.
Taxes and Business Number
Canadian government regulations for business include taxation regulations, as is the case with governments everywhere. Typically, a small business pays taxes as below:
- Property and business taxes to Local council;
- Provincial Sales Tax (PST) to provincial government; and
- Income Tax, Excise Duty and GST to Federal government.
Canadian Customs and Revenue Agency – CCRA – is the federal agency for taxes, the Ministry of Finance deals with provincial taxes and your local municipal office will also have a tax department.
The tax departments usually provide detailed guidenlines on taxation matters. The CCRA guide for small business and the publicaion Basic Retail Sales Tax of Ontario government, are examples of governmental publications to help you comply with tax regulations.
Business Number is a reference number for dealing with government. One Business Number could help businesses with GST, Payroll deductions, Import/Export Account and Corporate Income Tax. Details of Business Number are available at CCRA BN Web page.
All employers are required to register for a BN and deduct Canada Pension Plan and Employment Insurance from payments to workers. The deductions, along with matching contributions from employers, have to be remitted to The Trust Accounts Division of CCRA. In addition to these contributions, Income Tax should also be deducted from employee wages and paid to CCRA. CCRA provides tables for calculating deduction amounts, and also provides a New Employer Visits program to educate new employers on their obligations.
Employers paying wages out of an Ontario establishment might also have to pay an Employer Health Tax (EHT) to the Ontario provincial government, if the payroll exceeds $400,000.
If you employ workers, different employment regulations become applicable to you. The obligation to deduct taxes and insurance contributions from employee salaries (and pay these amounts to CCRA) have already been mentioned above. And the Employer Health Tax in Ontario.
You have to ensure safe working conditions and also pay a contribution to Workplace Safety and Insurance Board (WSIB) that compensates workers sustaining injuries or contracting occupational diseases.
Canadian government regulations for business include a Canada Labor Code that specifies the rights and duties of employees. Employment Standards Act include regulations relating to working hours, paid leave and holidays, and minimum wages. The Employment Equity Act prohibits unfair employment practices and discrimination.
If the services of an employee is terminated, you might have to give adequate notice and severance pay. There are also regulations for handling industrial disputes.
Log on to the Canadian Government Regulations for Business page and follow the links under Employment for fuller details.
Workplace Safety and Insurance
Workplace Safety and Insurance Act is a Canadian government regulation for businesses employing workers. If you plan to employ workers, you should contact the Workplace Safety and Insurance Board (WSIB) in your province to arrange insurance against workplace injuries and occupational illnesses. WSIB also supervises workplace safety education and training.
WSIB collects premiums from employers and uses the fund thus created to pay benefits to workers injured or contracting a work-related disease. If this kind of insurance was not there, you might face lawsuits from injured or ill workers. Learn about registering with WSIB, compulsorily within ten days, at the Ontario WSIB Web site. You must also notify any injuries or illness requiring healthcare to WSIB.
Owners and managers are not automatically covered by the insurance. However, you can take out optional insurance to cover yourself and your managers.
Learn about preventing injuries and illnesses at workplaces from the Prevention page at WSIB Web site.
Employers and employees engaged in federal works are covered by Canada Occupational Safety and Health Regulations, which include establishing workplace health and safety committees. See the concerned DHRC Web page for more information
Business Contracts, Fair Trading
All business transactions depend on the law of contract. That is, one party makes an offer to another party, and on the latter accepting it, a legally enforceable contract results. The law of contract specifies how a contract is formed, what constitutes a breach of contract and what remedies are available for such breach.
The law on sale of goods and fair trading practices protect the righs of the consumer as well as the seller. False claims, non-delivery and such unfair practices could damage the environment for business. The laws seek to provide deterrent remedies for these.
Canadian government regulations for business deal specifically with labelling of products, with separate provisions regarding food and non-food products labelling. For example, food labels must mandatorily include nutrition facts, and should not include any untrue or misleading claims regarding nutritional or dietary benefits.
Labels must specify the product identity, net quantity and manufacturer. Hazardous products must contain a warning. Go to Food Inspection Web site page for a guide to food labelling and to Industry Canada Web site page for a guide on non-food products labelling.
Other Canadian Government Regulations for Business
Other Canadian government regulations for business include those relating to Intellectual Property and Protection of Privacy. If you have spent time and money to develop a unique product, process, or design, you could prevent competitors from copying it. Laws relating to patents and copyrights would help you protect your intellectual property.
Privacy laws are becoming more and more evident everywhere. It is likely that private information about individuals might come into your possession during the course of business transactions. Privacy laws make you liable to use this information responsibly and fairly, and not to disclose it to others.