Ever wondered if your business could actually thrive in one of the largest North American markets? We’re not talking about Mexico or the United States. Instead, there’s a more stable and geographically-friendly alternative — Canada.
A vast landmass known for its exquisite landscapes and passion for ice hockey, Canada is among the most attractive destinations in the world for doing business. It ranks as the 3rd best country among the G20 to do business in the next five years, owing to its stable economy and government support for small businesses.
It’s the reason why global giants like Volkswagen, Siemens Energy, Amazon, and Google have established a physical presence in this region.
Still, doing business in Canada is not all peaches and cream. Like any other market, it comes with its own set of challenges. That’s why balancing the pros with the cons is the key to making the most out of its opportunities.
Benefits of Doing Business in Canada
The idea of doing business in Canada appeals to those looking to access the US market but without the complex regulatory hurdles or unpredictable political climate. However, there’s more to it than just proximity and a stable economy. Below are some of the pros of doing business in Canada:
Low Corporate Income Tax
The Canadian tax landscape is one of the most friendly for foreign companies. Thanks to its 90+ tax treaties that prevent double taxation, Canada stands out for having the lowest corporate tax burden in the G7 (at only 15% compared to 21% in the US). Pair this with minimal bureaucracy and no requirements for a physical presence, and you have a smooth entry into one of the world’s most stable economies. These advantages also allow your business to reinvest more, grow faster, and tap into both Canadian and international markets.
A Skilled and Culturally-Diverse Workforce
The Canadian government prides itself in its highly educated population. Through incentives and initiatives, it goes the extra mile to train and maintain a skilled workforce across various industries. In other words, businesses looking to do business in Canada can not only leverage a steady stream of trained professionals, but also a workforce that’s adaptable and globally minded.
On top of that, Canada’s population is incredibly diverse. Thanks to its flexible immigration laws, Canada brings a wealth of perspectives, languages, and market insights, which translates into more innovation and easier access to international markets for companies. In short, Canada has talent that can drive business growth in a connected world.
Strict Intellectual Property Protections
As a show of their commitment to innovation, the Canadian government consistently makes efforts to ensure creators, inventors, and businesses have full control over their work. While domestic IP laws suffice in preventing idea theft, it’s the five international treaties, including the Hague Agreement and the Madrid Protocol, that the country entered in 2022, that make the difference. As a result, companies now have the confidence to invest in new products, technologies, and content without fear of unfair copying even beyond Canadian borders.
Drawbacks of Doing Business in Canada
While Canada’s defense as an excellent place to do business is strong, there are a few potential challenges business owners should not overlook.
Operating Within Provincial Rules
Canada’s ten provinces each have their own governments and unique regulations. That means businesses willing to move their operations to Canada must not only consider federal laws, but provincial regulations as well.
Consider the online gambling landscape, for example. While playing at online casinos and betting online are legal under federal rules, every province still retains the power to govern its online gambling market independently.
For instance, Ontario has a regulated iGaming market that licenses private operators. But provinces like British Columbia and Quebec have government-operated platforms. In other regions, online gambling may be limited or tightly controlled, so how companies can offer their services will be affected. Understanding these jurisdictional differences is key to avoiding compliance issues and smooth operations.
Challenges with Lengthy Contract Enforcement Processes
While a solid and transparent legal framework well supports Canada’s contract enforcement process, truth is it can also be slow. According to the World Bank’s Doing Business 2019 report, it takes an average of 910 days to resolve an unpaid or disputed contract from filing to resolution.
This is due to multiple steps: filing and service, trial preparation, court hearings, and final judgment enforcement. Although Canada’s judiciary is known for being fair and adhering to the rule of law, the long process can be challenging for businesses, especially those that need timely dispute resolution to keep operations and cash flow going.
Implications of Doing Business in Canada
Doing business in Canada is both exciting and challenging. The country has a stable economy, a skilled workforce, and a transparent legal framework, making it an attractive place to invest and expand. But province by province regulations, different tax policies, and long contract enforcement timelines can add layers of complexity for domestic and foreign companies.
Companies looking to establish or grow in Canada should create a well-thought-out strategy. Canada often rewards companies with a long-term view and flexibility that takes advantage of the country’s strengths while managing its regulatory and procedural hurdles.
