Canada

Ease of Doing Business Rank: 22 

Overview 

Geographic location 

Canada is the northernmost country in North America. The Canadian mainland shares its southern border with the United States. The country also includes approximately 30,000 thousand islands, many of them inhabited. 

The Arctic Ocean lies to the north, the Pacific to the west, and the Atlantic to the east. 

Spoken language 

Canada’s has two official languages at the federal level: English and French.  

English is the primary language spoken by about 58 percent of the population. About 22 percent of the population speaks French as their mother tongue. According to the 2011 census, 17.5% are bilingual.  

French-speaking Canadians are found primarily in Quebec and other small regions throughout the country.  

About 20.6 percent of the population speaks other languages as their mother tongue. 

Population 

The 2019 population is approximately 38.28 million.  

The majority of the population lives in urban centers in the southern region of the country. The largest cities are Toronto (5.42 million), Montreal (3.51 million), Vancouver (2.26 million), Calgary (1.23 million), and Edmonton (1.05 million). Canada also has dozens of cities with populations under between 20,000 and 1 million. 

Popular industries 

The top industries in Canada by GDP are real estate, manufacturing, mining, quarrying, and oil and gas extraction, finance and insurance, construction, health care and social assistance, public administration, and trade. 

Education 

The Times Higher Education World Rankings ranked five Canadian universities in the top 100 in the world. A further 22 ranked in the top 1,000 in the world.  

The Legatum Prosperity Index ranks Canada’s education system 15th out of 149. 

Popular entity types 

The most common business entities in Canada are a sole proprietorship, partnership, general partnership, and limited liability corporation. 

The most commonly incorporated entity in Canada is a limited liability corporation. 

Canadian incentives for business 

Canada offers many incentives for business. Some are on the federal level, while others are area-specific. 

Foreigners residing in Canada may qualify for foreign tax credit relief on business and non-business income calculated on a country-by-country basis. Each of the ten provinces and three territories also provides a foreign tax credit on foreign non-business income taxes.  

These credits reduce Canadian tax payable and excess foreign business income tax credits may be carried back three years or forward ten.  

Canada also offers incentives for specified regions to stimulate investments. These include a 10% federal income tax credit for investment in items such as new buildings, machinery, equipment, and clean-energy for use in particular industries. 

Some provinces and territories offer incentives to attract new businesses to their region. For instance, income tax holidays are available in Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, and Quebec for specific industries. 

Canada also offers industry-specific tax incentives for R&D, entertainment-related fields, manufacturing and processing, liquefied natural gas development, and environmental sustainability. 

The province of British Columbia also offers a non-refundable natural gas tax credit to qualifying corporations located within their province. The credit can potentially lower the provincial tax rate by 3% and any unused credit can be carried forward indefinitely. 

Additionally, the Scientific Research & Experimental Development credit offers a 15% non-refundable credit on SR&ED expenditures that can be used immediately to reduce federal tax or carried back three years, or carried forward twenty. 

Canadian controlled private corporations may also qualify for a 35% refundable tax credit annually up to a maximum of CAD 3 million for expenditures, with limitations. SR&ED income tax credits also apply to salary and wages directly related to activities, up to a maximum of 10%. 

History & Features 

 

Main cities for business 

Canada is a large country with ten provinces and three territories. As a result, it has many business cities spanning the nation. 

The main cities for business from west to east are Vancouver, Edmonton, Calgary, Regina, Saskatoon, Winnipeg, Hamilton, London, Ottawa, Toronto, Montreal, Quebec City, St. John’s, and Halifax. 

Toronto is the largest financial center, rated seventh in the world. 

Popular historical & tourist attractions 

Canada is the second largest country in the world and spans 5,514 km east to west and 4,634 km north to south. It is also multi-cultural and full of outstanding natural landscapes. 

Vancouver Island in the far west offers a Mediterranean climate, amazing gardens, and historic English architecture. Pacific Rim National Park on the west coast is one of the best-preserved temperate rainforests in the world with a 40kilometer-long stretch of sandy beaches.  

Take a ferry or plane to reach the mainland and Vancouver. This bustling metropolis has the nickname “Hollywood North” since it’s so popular with filmmakers. Granville Island offers shopping galore, while the Capilano Suspension Bridge offers a swinging stroll over a deep fern-filled gorge. 

Nearby Whistler is North America’s largest ski resort. It hosted the 2010 Winter Olympics and is a favorite for hiking, mountain biking, rock climbing and golf during the warmer months. 

Traveling east, you’ll reach the substantial Rocky Mountains. They straddle the border between two provinces and offer spectacular views, tunnels, and hairraising precipices. 

Once over the mountains, you’ll enter the Canadian Prairies. This 2,000kilometer expanse features forests which thin out to become sweeping farm fields for as far as the eye can see. This resource-rich region is also home to two of Canada’s largest oil and gas centers: Calgary and Edmonton. 

The Calgary Stampede is a ten-day rodeo, exhibition, and entertainment extravaganza with a distinctive western feel. Many people dress in white cowboy hats and some are authentic cowpokes that ride bucking broncos and rope steers. 

After crossing the three Prairie Provinces you’ll reach Ontario. It is the most populated region in Canada and features the Great Lakes, Niagara Falls, and the capital, Ottawa. 

Niagara Falls straddles the U.S./Canadian border, but the iconic horseshoe-shaped falls lie on the Canadian side. It is the most powerful waterfall in North America with more than 6 million cubic feet of water falling over the brink every minute. 

Quebec lies further east and it is the second-most populated province. It is home to some of the earliest architecture and settlements in the country. Quebec City was first settled in 1535 and the historic old town is a UNESCO World Heritage Site 

Nearing the Atlantic side of the country, you’ll find the Maritime Provinces and easternmost province of Newfoundland and Labrador. The sea dominates these areas and you’ll find a long, jagged coastline, picturesque bays, and fantastic seafood. This area also boasts many historic sites as the English and French clashed here often during the eighteenth century. 

Let’s not forget the northern regions of Canada. The Klondike Gold Rush in the Yukon between 1896 and 1900 due thousands of prospectors to the area in a mad dash for riches. 

The Northwest Territories, originally Rupert’s Land, was the exclusive commercial domain of the Hudson’s Bay Company between 1670 and 1870 for fur trade. Eventually, the HBC sold Rupert’s Land to Canada for 300,000 Pounds. 

Most recently, the eastern portion of the Northwest Territories became a separate territory: Nunavut. It is the traditional lands of the Inuit, the indigenous peoples of Arctic Canada. 

History 

The first residents in Canada can across the Bering Straits from Asia during the Ice Age. In 986 AD, the first Europeans spotted the region when a Viking ship blew off course.  

In 1001, a Norse explorer landed and claimed the area, but did not remain. Eventually, Vikings established a colony, but abandoned it after serious conflicts with the indigenous population.  

Canada was largely ignored until 1497 when England sent an expedition to the Atlantic area where they found the Grand Banks teeming with fish. In 1534, the French also sailed to the coast of Canada and then deeper into the territory down a huge river they named the St. Lawrence. However, no permanent European settlements appeared until the early 17th century. 

The French sailed up the St. Lawrence again and founded several settlements over the next few years. They dubbed the area “New France”. From 1685 to 1740 the population grew from 10,000 to 48,000 residents. 

The English returned to Canada on several expeditions and discovered a wide northern expanse of water, later called Hudson Bay. The English briefly overtook Quebec in 1629. However, the French recaptured it in 1632. 

In 1670, the English Hudson Bay Company was granted exclusive rights to trade skins and furs with the natives of the Hudson Bay area. However, the rivalry between the British and French continued. 

After the War of the Spanish Succession (1701-1713) fought by European coalitions to contain the expansion of FranceFrance ceded control of Hudson Bay, Newfoundland, and Nova Scotia to Britain. However, the conflict between the two nations was far from over. 

Between 1756 and 1763 the nations battled for control of Canada. The British captured a French fortress in 1758, overtook Quebec City in 1759, and captured Montreal in 1760. In 1763, the French ceded all territories to the British under the Treaty of Paris. However, many French Canadians remained. 

The Quebec Act of 1774 granted French Canadians religious freedom and recognized French civil law in hopes of gaining their support. The American Revolutionary War had started in 1765 and the British were feeling the strain as American Patriots fought for independence. 

However, the French did not rally to help the British. An American army captured Montreal in 1775, but they failed to overtake Quebec City and retreated in 1776. The eastern region was now in British hands and they continued to explore the western coast and northern regions of Canada. 

Britain promoted migration to the Great Lakes area and shipbuilding flourished. However, by the early 19th century many Canadians demanded a more democratic government rather than blindly following English leadership. 

During the War of 1812 American forces invaded Canada again, but were unsuccessful. Discontent grew amongst Canadians and several uprisings ensued. However, they were quickly crushed. 

In 1867, the provinces of Ontario, Quebec, Nova Scotia and New Brunswick became the Dominion of Canada with a democratic government under British oversightManitoba joined in 1870, British Columbia in 1871, and Alberta and Saskatchewan in 1905. 

During the late 19th century and the early 20th century, Britain went to great lengths to secure their territory. First, they encouraged the British to migrate. Later, they expanded their efforts throughout Western Europe, and finally Eastern Europe. They established a network of recruitment offices across Europe and advertised free land for farming, steam passage to Canada, and rail transportation to the western regions. 

When Britain declared war on Germany in 1914, Canada followed suit. They consequently lost more than 60,000 men in some of the bloodiest battles, principally at Somme, Vimy, and Passchendaele. 

The post-war years were prosperous, until the stock market crash in 1929. During the 1930’s, Canada felt the effects of the Great Depression deeply, especially in the West. The prairies turned into a dust bowl and unemployment soared to 23%. 

World War II ended the depression, but Canada suffered heavy losses. Over 45,000 Canadians died fighting with the Allied Forces. Of those, 14,000 died on the beaches of Normandy on D-Day. 

After the Second World War, Canada flourished. Despite several recessions in the eighties, nineties and early twenty-first century, Canada recovered. 

Today, Canada has a highly developed mixed economy with the 10th largest GDP in the world and a democratic, parliamentarian government. 

Other relevant facts 

According to the 2016 census, 67.3% of the population is Christian. A further 23.9% do not claim a religious affiliation. Other faiths include Muslims (3.2%), Hindus (1.5%), Sikhs (1.4%), Buddhists (1.1%), and Jews (1.0%). 

Canadians are primarily of mixed ethnic origins (41.1%) and consider themselves “Canadian”. Other ethnicities include English (18.34%), Scottish (13.93%), French (13.55%), Irish (13.43%), German (9.64%), Chinese (5.13%), Italian (4.16%), First Nations (4.43%), and more. 

Additional Information for Business 

According to Forbes’ 2019 Best Countries for Business, Canada is the sixth best country in the world for conducting business.  

The 2019 Index of Economic Freedom rates Canada 8th globally and states, “The government is emphasizing trade diversification, export promotion, and support for small businesses and domestic industries affected by protectionism. It has also maintained an expansionary fiscal policy, and business investment has grown. 

World Bank’s “Doing Business” rankings rate Canada 22nd for ease of doing business in the world. 

Canada Entity Support Services by Blueback Global

Blueback Global provides a one-stop integrated solution to managing all aspects of your global operations. We can take the burden off you or your company’s internal resources by managing Entity Setup, Local Payroll, Accounting, Tax Reporting, HR Admin and Regulatory Compliance matters associated with operating in a foreign country. Our services are designed to be flexible and customized, so whether you are starting from entity registration, or have already registered but need support in setting payroll or hire employees, we can help at every point of the process.

The common scenarios that may give rise to the need for Blueback Global’s services include the following:

With our integrated approach, you can expect the following experience:

We have an initial complimentary meeting to discuss the scope, objectives and plans for your expansion plan into Canada. After this meeting, you can expect a follow-up proposal from Blueback Global within 1 to 3 business days, that outlines that the approach, scope of work and expected deliverables and outcome. Thereafter, our implementation team will then work closely with your team to register the local entity, set up payroll, accounting process, employee social security and benefits. We will then develop a mutually agreed timeline and approach for ongoing payroll, accounting, tax reporting and HR support. Blueback Global will set up a compliance calendar so that you know exactly what and when compliance items such as tax reporting and payroll returns are due. We will of course facilitate all of these, so you do not have to keep track of the compliance dates.

Our goal is to make the process as smooth, simple and successful as possible, and remove the anxiety of operating in a foreign location, to deliver a great customer experience.

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