Guidance

Overseas business risk: Canada

Updated 21 February 2022

1. Political and economic

1.1 Economic context

Canada is the world’s eleventh-largest economy, and has a population of over 38 million people. Key components of Canada’s highly diversified economy, such as real estate, manufacturing, wholesale and retail trade, mining/oil and gas, construction, transportation, health and social care, and financial, professional, scientific and technical services (collectively over 70% of economic output) provides strong commercial opportunities for British businesses.

For latest bilateral trade and investment statistics, visit the Trade and Investment Country Factsheet for Canada (PDF, 652KB).

On wider bilateral relations, the UK and Canada have a strong relationship that extends to many of the world’s most important international institutions and forums, sharing membership of the Commonwealth, G20, G7, the World Trade Organization and NATO, among others.

In addition to providing the benefit of stable rule of law and a large developed market, Canada is also a good starting point for entering the North American market, as well as the wider Americas. Canada has a free trade agreement with the United States and Mexico through the North American Free Trade Agreement, and also has trade agreements with Panama, Costa Rica, Chile, Peru, Columbia and Honduras. Canada and the UK agreed a Trade Continuity Agreement in December 2020, which provides businesses with stability and predictability in the relationship.

The UK-Canada bilateral trade and investment relationship is currently underpinned by the UK-Canada Trade Continuity Agreement. Canada also has free trade agreements with the European Union, the United States, Mexico, and the 11 members of the Comprehensive and Progressive Trans-Pacific Partnership.

1.2 Political context

Spanning 6 time zones and bordering 3 oceans, Canada is governed by a federal structure that is composed of 3 levels of government. The federal government is responsible for the conduct of international affairs, customs tariffs, banking, intellectual property, transportation and national defence, among other things.

Provincial governments are primarily responsible for the delivery of social services such as healthcare and education. They also have a lead responsibility for a number of natural resource sectors, including oil and gas, and mining.

Below provincial governments are local councils that are responsible for the delivery of emergency services and public transport systems. Some areas of commercial opportunity for British businesses, such as infrastructure, are usually delivered by either the provincial or local levels of government. Each level of government has various abilities to levy taxes. Federal and provincial governments levy personal and corporate taxes, as well as sales taxes. There are also various excise taxes on a number of products such as petrol, alcohol, and tobacco.

The federal government is the sole authority for the collection of customs duties. Local councils collect money primarily through user fees and property taxes. Provincial and local governments can independently set their own tax rates. Companies working in the extractives resource sectors will also want to be aware of working with Canada’s Aboriginal communities. Projects in these sectors frequently will have implications for Aboriginal land as well as hunting and fishing rights. Where this is case, companies should think about social licence considerations, alongside regulatory and other business factors.

Federal and provincial government structure are broadly analogous to those of the UK’s parliamentary system. Canada’s head of state is HM King Charles III, and he is represented by an appointed Governor-General at the federal level and Lieutenant-Governors in the provinces. The federal House of Commons consists of 338 Members of Parliament and an appointed upper house, the Senate, which has approximately 100 Senators. Provincial legislatures only consist of a single elected chamber. Canada’s legal system is based on a combination of civil law (used mostly in Quebec) and common law (used mostly in the rest of Canada).

English and French are the most used languages in Canada. French is the official language of Quebec. New Brunswick is officially bilingual. English is the dominant language in the other provinces and territories.

2. Human rights and business

Both the federal and provincial governments have a role in the administration of Canada’s labour laws, with the latter being more important.

Employment laws in Canada generally cover areas such as hours of work and overtime pay, minimum wage, pay, holiday time and pay, public holidays, breaks, parental leave, and termination. Some key points include:

  • hours of work and overtime rules apply to most workers and vary significantly across Canada
  • the minimum wage varies widely in Canada according to provincial or territorial law
  • employees must be paid at regular intervals and given a statement showing their wages and deductions for that pay period
  • most workers have the right to annual leave days with pay
  • a public holiday enables most workers to have the day off with pay or receive overtime if they work. Every province and territory provides for a number of public holidays
  • some categories of workers may be subject to a different set of employment standards, such as farm workers, commercial fishers, home care givers

3. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

According to Transparency International’s Corruption Perception Index Canada was ranked as the 11th least corrupt country in the world in 2020.

Companies wishing to bid on contracts being procured by the federal government should be aware of the Integrity Regime’s requirements. Companies convicted of certain crimes are ineligible to enter into contracts with the federal government for a period of up to ten years.

4. Terrorism threat

Read the section on terrorism in the travel advice on Canada.

5. Protective security advice

Read the section on safety and security in the travel advice on Canada.

6. Intellectual property

The administration of copyright, patents, and trademarks is done through the Canadian Intellectual Property Office. Read the information provided on protecting your Intellectual Property.

7. Organised crime

As in many other major countries, international organised criminal activity takes place in parts of Canada. Read the information provided on our organised crime page.

8. UK Export Finance

The government can provide finance or credit insurance specifically to support UK exports through UK Export Finance – the UK’s export credit agency. For up-to-date country specific information on the support available see the UK Export Finance’s country cover policy and indicators.

9. Department for Business and Trade contact

Contact the Department for Business and Trade (DBT) team in Canada for queries.

For more information about Canada read either the British High Commission or UK and Canada webpage.