Canada PEO Employment Services

• American and European companies expanding into Canada find a market with similar business practices and cultural norms, albeit with some differences explored below.
• Outside of Quebec, English is the language of business, simplifying communication in some foreign markets with language barriers.
• Canada offers a lower corporate tax rate at 15% compared to the United States’ 21% rate, making it a more attractive market for many businesses with North American operations.
• Although COVID-19 stunted Canada’s economic growth, the International Monetary Fund (IMF) projects the country will see strong recovery in the coming year. Canada’s resilient and diverse  national and provincial economies make it an attractive market for both testing a short-term project or establishing a long-term presence.
• Tech companies find Ontario, the Canadian province containing its capital, Ottawa, and richest city, Toronto, a prime location for tech talent. Canada’s openness to global talent through its Global Talent Stream initiative furthered Toronto’s tech boom, attracting foreign talent and expediting immigration to the country. Employers expect a diverse and highly-skilled talent pool to drive their growth.

• Though Canada offers attractive tax rates, the time it takes to complete these taxes hovers around 131 hours annually, making paying taxes a cumbersome process. Additionally, provincial VAT (sales tax system) rates vary, while some provinces have no VAT.
• Similar to the United States, Canadian laws vary between provinces. Some of these laws offer attractive environments to businesses; however, keeping up with varying employment, tax, and other laws can quickly compound and create confusion if operations extend beyond one province.
• Small businesses must also anticipate potential challenges obtaining credit. Government initiatives exist, but are not prominent; small businesses may have difficulty with initial investments needed to begin operations.

• Shake hands during introductions, like in most western markets. Handshakes are common with introductions between both men and women. It is not uncommon for men and women to kiss lightly on the cheek if close friends, though rarely between two men.
• Introduce meeting members by rank, not gender. Authority revolves around a person’s position, not their name, status, sex, or class.
• Maintain eye contact during meetings and speaking with people one-on-one and in a group. Lack of eye contact may come across as disinterest or boredom.
• Be punctual. Timeliness applies to both work hours and meetings. After 10 to 15 minutes, meeting members will likely not wait for the host to arrive if they have not communicated their tardiness. Always reach out if you or your colleagues will not arrive on time.

• Minimum wages vary by province and increase yearly based on the Consumer Price Index (CPI).

• Employers including probation periods in employment contracts implement periods lasting between one and six months, though most last between three and six months.

• Employers may pay discretionary or other bonuses, though should include the bonus type and stipulations in individual employment contracts. 13th-month pay is not mandatory in Canada.

• Employers must provide termination notice to all employees, though minimum notice periods vary by province.
• In some provinces, minimum severance pay must accompany a notice period. Some provinces do not require any severance pay with the notice period.
• Quebec employers may not terminate employees with two or more years’ uninterrupted service without sufficient cause.

• Canadian Labour Code offers up to 17 weeks of maternity leave. Additionally, an employee caring for a newborn or newly adopted may take up to 63 weeks of leave.
• Both parents may take joint parental leave if working for an employer under the Labour Code’s jurisdiction, totaling an additional eight weeks of leave. Parents may split parental leave up to 71 weeks. Similarly, parents who take simultaneous leave or one after the other may take up to a combined 71 weeks of leave.
• Cumulatively, parents combining maternity and parental leave may take a total of 86 weeks’ leave. Note that combined leave applies only to shared parental leave.

• Employees receive a minimum of two weeks’ annual vacation for each completed year of employment. After five uninterrupted employment with the same employer, the employee receives three weeks’ vacation; after 10 years, leave increase to four weeks’ vacation.

• Employees with three consecutive months of employment with the same employer receive up to 17 weeks of sick leave.
• All employees must provide a doctor’s note certifying illness within 15 days of returning to work if an employer requests documentation.
• Sick leave can interrupt other types of leave. For example, an employee on maternity leave may pause maternity leave to take sick leave. Once the employee returns from sick leave, the original leave period continues.

Average workweek hours:

• Canada’s workweek is eight hours per day within a consecutive 24-hour period. The workweek runs between midnight on Saturday and midnight the following Saturday, and totals 40 hours.
• Some provinces extend a 48-hour workweek.

Overtime considerations:

• All work hours beyond 40 or 48 hours constitute overtime. These additional hours require pay at a minimum of 1.5 times the employee’s hourly wage. Exceptions include managers and professionals such as lawyers, doctors, engineers, dentists, and architects.