We all recognise that the benefits for businesses and customers when companies decide to expand. Those involved in international expansion quickly recognise, however, that multi-jurisdictional legal requirements are not becoming less challenging. When expanding business into new countries, executives responsible for international operations understand that the failure to comply with local laws or practices, wherever the organisation operates, can result in significant legal and reputational exposure. It may be difficult for organisations to ensure full legal compliance when expanding. The following checklist will allow your organisation to understand some of the most important legal requirements for opening up shop in Canada.
Filion Wakely Thorup Angeletti LLP (“FWTA”) is a dedicated management-side labour and employment firm operating in Ontario, Canada, but with national reach. We would be delighted to have the opportunity to assist with your organisation’s expansion into Canada. We have created a comprehensive package of materials and training modules allowing any organisation to open quickly and in a cost-effective manner while still ensuring compliance with Canadian regulations and best practices. The summary information below relates primarily to requirements in Ontario, Canada’s economic centre, but can be modified for any province of interest.
2. Labour and Employment Law Requirements
a) Employer Policy Requirements
In order to be legally compliant, employers are required by legislation to create and implement a number of employment policies. The following are statutorily required policies for an organisation that is commencing work in Ontario:
- a written occupational health and safety policy;
- a policy with respect to workplace violence and a program to implement the policy;
- a policy with respect to workplace harassment and a program to implement the policy;
- policies governing how the organisation achieves or will achieve accessibility for persons with disabilities (customers and employees);
- individualised workplace emergency response information and an individualised accommodation plan for each employee with a disability;
- return-to-work processes for employees who have been absent from work due to a disability;
- a multi-year accessibility plan describing how the organisation will achieve accessibility and compliance with the Accessibility for Ontarians with Disabilities Act (the “AODA”) and its Regulations;
- a written policy with respect to disconnecting from work; and
- a written policy with respect to the electronic monitoring of employees.
Different policy requirements apply to employers operating in Canadian jurisdictions other than Ontario. In general, policies with respect to occupational health and safety, workplace violence prevention, and workplace harassment prevention should be implemented in workplaces across Canada. Policies addressing other topics may also be required. Our firm can assist your organisation with understanding and complying with the specific policy requirements applicable to your Canadian operations.
In addition to the policies required by statute, there are a number of policies that employers should create as a best practice. These policies will help an organisation manage employee relations and mitigate the risk of legal liability in the future:
- a general anti-discrimination policy, including the process for responding to discrimination complaints, as employers that do not take positive steps to prevent or address discrimination may face significant liability;
- a discipline policy to address employee misconduct and how your organisation will respond to misconduct;
- attendance and leave of absences policies to govern employee expectations for absenteeism and workplace attendance;
- policies surrounding the use of employer tools (e.g., computer and mobile phone use, internet use, social media, physical tools, etc.) to ensure employees are aware of the expectations surrounding their employment; and
Many employers in Canada decide to put all of the foregoing policies and procedures within a unified employee “handbook” that contains all the information every employee would need in the employment relationship. A Canadian employee handbook will help your organisation streamline and standardise its operations and human resources management.
There are also certain posting obligations for a number of the policies described above, as well as obligations to post other statutorily mandated documents. Employers must fulfil these obligations to ensure full compliance with the law.
Our firm has prepared precedent policies and handbooks, which can be efficiently modified for your organisation. We can also assist your organisation with any other posting obligations required in the jurisdiction where you operate.
b) Employee Training Requirements
Employers are required to conduct specific training activities within their workplaces. The following list sets out the statutorily mandated training that Ontario employers must provide:
- train at least one health and safety representative to enable them to exercise the powers and perform the duties of that position;
- ensure that all workers complete basic health and safety awareness training;
- provide workers with information and instruction on the contents of the workplace harassment policy;
- if your workplace contains hazardous material, workers must receive training and instruction on the handling of such material;
- ensure that at least one employee is trained in first aid;
- train employees on the policies for interacting with persons with disabilities and on the general requirements under the AODAand its regulations; and
- provide training on the Ontario Human Rights Code as it pertains to persons with disabilities.
We have created training modules covering all of these training areas and topics. Training can be offered in person or through webinar.
c) Employment Agreements
In Canada, employers are urged to create written employment agreements for all employees. Such agreements are vital as “at-will employment” is not a concept recognised in Canadian law. In the absence of employment agreements, the relationship between the employer and employee is governed by the “common law”. Employer common law obligations are often much more onerous than contractual rights under an employment agreement, especially as they relate to employee rights upon termination. Employment agreements are essential to limit the risk of legal liability and financial exposure in operating the employment relationship. Furthermore, often times when businesses hire independent contractors, adjudicators will determine that the independent contractor is actually in an employment relationship with the company resulting in significant liabilities for the company.
Our firm has prepared thousands of precedent employment agreements. Modifying precedent agreements for your organisation will be a critical portion of the project.
3. Corporate Law Requirements
a) Compliance for Incorporation
In order to incorporate a company in Canada, there are a number of steps and requirements that are needed to ensure legal compliance. For organisations based in Ontario, those steps and requirements are as follows:
- choose the jurisdiction for registration (federal or provincial);
- determine the legal name of the corporation, in accordance with requirements under applicable business laws;
- define the organisation’s capital structure;
- establish the initial registered office address;
- establish a board of directors (note that, in Canada, the board of a federally incorporated company must be comprised of at least 25% resident Canadians; this residency requirement does not apply to provincially incorporated companies in Ontario);
- prepare a register of directors, which sets out the names and residence addresses of all persons on the company’s board of directors;
- prepare a securities register;
- prepare a register of ownership interests in land, if applicable; and
- prepare and file articles of incorporation.
b) Post Incorporation Registrations
Following incorporation in Canada, a company must complete several steps before it can begin to carry out business. For Ontario-based companies, these steps include:
- hold the first directors meeting, at which certain business should be transacted to establish necessary organisation and foundational resolutions, such as drafting the initial corporation by-laws, adopting forms of security certificates and corporate records, appointing officers, adopting banking resolutions, appointing auditors, and authorising the issue of securities;
- draft a unanimous shareholder agreement/declaration restricting powers of the board, if applicable;
- correspond with the Canada Revenue Agency to complete all necessary application steps to obtain a Business Number, which is used in all federal accounts (e.g., income tax registration, Harmonized Sales Tax registration, Employment Insurance payroll deductions, Canada Pension Plan deductions);
- register with the Workplace Safety and Insurance Board, unless otherwise exempted;
- prepare an Investment Canada (Canada’s foreign trade regulator) report regarding non-resident formation of a Canadian corporation obtaining a no-action letter from them;
- correspond with a Canadian bank regarding the satisfaction of “know-your-client” obligations and account opening procedures;
- obtain any extra-provincial licenses or registrations necessary to carry on business in other Canadian jurisdictions, where applicable;
- register trademarks or other intellectual property protections, where applicable; and
- apply for and register any licenses or permits necessary to conduct the business’s operations in Ontario (e.g., insurance, waste disposal, professional licenses, etc.).
Our firm has established relationships with experts in the above business law requirements and will coordinate the work with completion included in the quoted project budget.
4. Payroll and Benefits Providers
In Canada, the vast majority of employers outsource payroll and benefit responsibilities to third party companies. This reduces the administrative burden faced by the company, as payroll deductions and benefit administration tasks are handled by qualified companies who specialise in these areas. We would be happy to recommend payroll providers to fit your business’s requirements.