Canada: Operating a Business

Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labor | Management of Human Resources

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
One man business. No minimum capital.	1 person. Liable for all debts and obligations.
Partnership Personal investment	2 persons or more Personally liable for all the debts and obligations of the company.
Limited liability partnership Personal investment	2 persons and more Unlimited for general partners and limited for limited partners
A Corporation is a private joint-stock company identified by Ltd or Inc or Co. Public or Private. No minimum capital	One or more Limited to share capital for all shareholders
State owned company, the shares are public No minimum capital.	Investing partners Limited liability. Not liable for the debts, obligations or acts of the company..
Private company majority of shareholders Canadian No minimum capital.	No minimum. Limited liability. Not liable for the debts, obligations or acts of the company. Cannot sell shares or securities to the general public.
Cooperative No minimum capital.	Managed by members Limited liability.
Limited partnership No minimum	persons financially involved The liability of the silent partner to the company and creditors is limited to the amount of capital he invested.

Enterprises Federation: Canada Business
Businessman Information
Search a Company or a Financial Report: COCANADA

Business Setup Procedures

Setting Up a Company	Canada	OECD
Procedures (number)	1.00	5.60
Time (days)	5.00	13.80

Source: Doing Business.

For Further Information: Consult Doing Business Website, to know about procedures to start a Business in Canada.
Canada Business
The Competent Organization: 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. Numbered companies are registered within 10 days. In Quebec this is the department of the Enterprise Registrar.

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 Programme 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.

The Active Population in Figures

	2010
Labor Force	18,590,000

Source: CIA - The world factbook

	2009	2010
Total activity rate	-	67.80%
Men activity rate	73.00%	-
Women activity rate	62.70%	-

Source: UN - United Nations

Employed Persons, by Occupation (% of Total Labor Force)
Management	10.4%
Business, finance and administration	17.5%
Natural and applied sciences and similar professions	6.4%
Health sector	5.2%
Social sciences, teaching, public adminstration and religion	6.8%
Arts, culture, sport and leisure	2.8%
Sales and services	24.5%
Trades, transport and machinery	14.1%
Professions proper to the primary sector	4.3%
Processing, manufacturing and public services	7.7%

Source: Statistics Canada

For Further Statistics: Statistics Canada
For Further Information About the Labor Market: Quebec Ministry of Labour
Ontario Ministry of Labour

Working Conditions

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 in 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 years ago) receive 42% more from the Canadian Pension Plan, the public pension.
Child Labor 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 Labor 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.

The Cost of Labor

Pay

Minimum Wage: The minimum wage in Canada varies by province:
Alberta : 9.40 CAD
British Columbia : 9.50 CAD
Manitoba : 10 CAD
New Brunswick : 10 CAD
Newfoundland : 10 CAD
Northwest Territories : 10 CAD
Nova Scotia : 10.15 CAD
Nunavut : 11 CAD
Ontario : 10.25 CAD
Prince Edward Island : 10 CAD
Quebec : 9.65 CAD
Saskatchewan : 9.50 CAD
Yukon : 9.27 CAD
Average Wage: CAD 46,550
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: Employment insurance EI (1.4% up to 584 USD in Quebec and 720 USD for the other provinces), Health insurance RAMQ (2.7%), Canada Pension Plan CPP - QPP (4.95%), Quebec Parental Insurance Plan RQAP (0.583% for the employer).
The rate of health insurance varies according to the province.
Contributions Paid By the Employee: Employment insurance EI (1.46% up to 584 USD in Quebec and 720 USD for the other provinces), Canada Pension Plan CPP - QPP (4.95%), Quebec Parental Insurance Plan RQAP (0.416%)
The rate of health insurance varies according to the province.
Competent Organization: Revenu Québec (Quebec Revenue Agency)
Canada Revenue Agency
Health Insurance Quebec
Ontario Department of Health
Health Insurance British Columbia
New Brunswick Department of Health

Management of Human Resources

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 centres are the official agencies.
Recruitment Websites: Jobboom
Jobaction
Monster
Beljob
Aide Emploi
Workopolis

The Contract

Type of Contract: Federal provisions govern contracts of employment in Canada. The Government of Canada has established minimum standards for employment in Part III of the Canada Labour Code, including the minimum wage, annual leave, public holidays, bereavement leave, etc. Collective agreements and individual negotiations supplement these provisions. In addition, each province has its own rules of labor law.

Breach of Contracts
Retirement: There are several ways of retiring: early retirement, automatic retirement and official retirement.
Dismissals: The employer initiates dismissals for different reasons:
- redundancy is either individual or mass redundancy
- dismissal for professional misconduct, lack of work, seasonal work
Other Possible Methods: Resignation; this is initiated by the employee. On the other hand, he does not receive any severance pay.
Labor Laws: Service Canada, Employment
Labour legislation, on Human Resources and Social Development Canada
Labour Code - Compliance Policy

Dispute Settlement

Conciliation Process

Cases of Dispute: Working conditions, unfair dismissal, sexual and moral harassment, verbal violence, physical violence
Legal Framework: When there is a dispute or a disagreement, the parties first try to come to an amicable agreement. If, however, they cannot come to an agreement, the worker must lodge a complaint with the Department of Human Resources. According to the complaint, the Minister can appoint an inspector who carries out an investigation. The Minister assesses, authorizes the settlement and the sentences to be served by the party in the wrong. The party in the wrong does have, however, a right of appeal to have the case reviewed within a precise time limit.
For further information, see the Canada Labour Code.
Procedure: Canada Labour Code

Judicial Structures

Legal Framework: Canada Labour Code.
Competent Legal Body: See the Canada Labour Code.

Social Partners

Social Dialogue and Involvement of Social Partners: The labour organizations and trade unions are very strong and well structured in Canada. Quebec is the most unionized province.
Unionization 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.
Unions: FTQ - Quebec workers federation
CSN - Canada national federation of labour organizations and trade unions
CLC-CTC - Canadian Labour Congress
NUPGE - National Union of Public and General Employees
TCA-CAW - Canada Automobile Workers Union
CUPE - Canadian Union of Public Employees
Regulation Bodies: Human Resources and Social Development Canada

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