What You Need to Know About Doing Business in CanadaIf you’re based in Canada and considering starting a business or based outside of the country looking to do business in a foreign market, Canada is one of the top choices you should consider. According to Forbes, it is the second best country to do business in amongst the G20 countries. It has registered a steady economic growth in the past 10 years. Here are a few facts about doing business in Canada.
- Small Business Ownership Small businesses are the backbone of Canada’s economy. 86% of exports in the country are from small businesses. They contribute 25% of the total value which amounts to about $70 billion a year. Most small businesses in Canada are either sole-proprietorships, limited liability companies or partnerships. However, there are many small businesses that operate under C Corporation. That is because taxes for corporations are much lower in than in the US. Additionally, the federal corporate tax is about 15% and this is reduced to 11% for the first $500,000 in taxable income.
- Industry Segment Growth The fastest growing sector in Canada is the tech industry. Tech provides jobs for 864,000 Canadians which represents about 5% of the nation’s workforce. The ICT sector dominates the tech industry contributing to about 60% of the total output and providing 55% of jobs for those in tech. Agriculture is another big industry in Canada. The industry has grown thanks to the exports sent to the southern neighbor America. The agricultural sector accounts for 8% of the country’s GDP. Other thriving sectors in Canada include energy, services, and manufacturing.
- State of the Economy and Employment 2017 has been a good year for Canada’s economy. Quarterly GDP figures show the country’s economy leading other G7 countries. The growth has led to a significant reduction in unemployment and an increase in the number of full-time jobs. The unemployment rate in 2017 fell to 6.2% which is below the 6.3 percent projected by experts. This is the lowest unemployment rate in a decade since the 2008 labor market downturn. More than 20,000 jobs have been created in the finance, transportation, real estate and insurance sectors.
- Regulatory Framework If you want to start a business in a foreign country like Canada it is critical that you understand the regulatory framework. America and Canada have many similar legal and regulatory structures, but there are also key differences worth noting. One of the key differences is in legislative jurisdiction over matters of employment and labor. In America this falls under 3 levels; state, local, and federal. In Canada the jurisdiction for labor is either with the provincial or federal government. Many employers fall under the jurisdiction of the provincial authorities. Both the federal and provincial authorities have statutes that spell out minimum requirements for businesses regarding issues such as the minimum wage, working hours and overtime, statutory vacations, amongst others. Other than federal and provincial governments there are also regulations that you’ll need to adhere to set by the municipal authorities, industry associations and regulatory bodies. You’ll need to register your business in the province where your premises will be located. Canada is a stable country with a vibrant economy with many opportunities beckoning for entrepreneurs.