Expand your business into Canada, without a local entity
Expanding a business into Canada can be potentially lucrative, but comes with some complexities. Navigating both federal and provincial laws and regulations, can be a long and confusing process.
At New Horizons, we offer a full suite of business solutions for expansion into Canada. Our professional employer organization (Canada PEO & Canada Employer of Record) solution means outsourcing payroll and employer compliance to a trusted partner, giving you the space to focus on expanding the business itself.
Our Canada PEO solution includes a dedicated in-house recruitment team, which enables us to recruit, as well as hire, the best new employees for your business. Instead of establishing an entity in Canada, you are able to engage our local subsidiary as your Canada Employer of Record. This gives you all the benefits of hiring in Canada, without the need to handle complex payroll, employment and compliance issues.
Our Canada Employer of Record solution can cut expansion costs by thousands of dollars and give you maximum flexibility for your Canada expansion.
Our Canada PEO simplifies your expansion
New Horizons enables your business to expand its operations into Canada — without setting up a legal subsidiary.
Hiring in Canada
Our Regional Presence in Canada
Our Canada PEO solution enables your business expansion from within Canada.
From our Toronto office, we manage staff recruitment and hiring across Canada, ensuring compliance with all federal and provincial laws.
Canada - Regional Office
1670 Bayview Avenue, Suite 306
M4G 3C2, Toronto – Canada
+1 (416) 477 1520
Canada employment contracts
Employment law in Canada is governed by both federal and provincial employment laws in Canada, so you will need to be familiar with everything that is relevant to your location.
A written contract is not a statutory requirement of employment in Canada, but using a written contract is strongly recommended. Using a written labor contract ensures that there is explicit agreement on key terms of employment, such as benefits, salary/wages, paid vacation, and so on, reducing the likelihood of dispute at a later point. Furthermore, if there is no written contract in place, the court will read certain ‘implied terms’ into the contract, which may not favor the employer.
Canada is bilingual, with both English and French being used widely. In every province except Quebec (where French is the official language), English is the most common language for employment contracts and would generally be expected, outside Quebec.
By partnering with our Canada PEO & Employer of Record, New Horizons can provide draft employment contracts compliant with the applicable federal and provincial regulations.
Working hours in Canada
In general, most employees work a standard five-day week from Monday to Friday. Provincial legislation determines the rules around working hours in each location. For example, in Ontario, the most populous province, the maximum working hours are 48 per week, and 8 hours per day (or the standard workday). Note, however, that this can be extended by agreement between the employer and employee. The other provinces operate similarly (e.g., 40 hours is expected in British Columbia, with any more requiring overtime pay), but it is essential to understand the law in the industry and geographical area you are employing.
For overtime, the rules (which are set provincially), generally require around 1.5-2.0x normal pay.
Public holidays in Canada
Canada has a number of public holidays for employees. The following holidays are celebrated in Canada, although some only provincially:
- New Year – Friday, January 1, 2021
- Good Friday – Friday, April 2, 2021
- Easter Monday – Monday, April 5, 2021
- Victoria Day – Monday, May 24, 2021
- Saint-Jean-Baptiste Day – Thursday, June 24, 2021 (Quebec only)
- Canada Day – Thursday, July 1, 2021
- Civic Holiday – Monday, August 2, 2021
- Labour Day – Monday, September 6, 2021
- Thanksgiving Day – Monday, October 11, 2021
- Remembrance Day – Thursday, November 11, 2021
- Christmas Day – Saturday, December 25, 2021
- Boxing Day – Sunday, December 26, 2021
Employment benefits in Canada
It’s important to understand what benefits your employees in Canada are legally entitled to or will expect to receive. We set out some of the most important benefits below.
Vacation in Canada
Almost every employee in Canada has the legal right to paid vacation under the federal law known as the Canada Labour Code. Most provinces apply the federal minimum of two weeks minimum paid leave, while a few (e.g., Saskatchewan) offer three weeks.
Most employers across the entire country will offer between two and four weeks in addition to any public holidays, with the amount of available paid leave increasing with time spent in the job. Employees can also carry unused vacation days into following years upon negotiation with employers.
Sick leave in Canada
Under the Canada Labour Code, employees have a minimum of five days of sick leave, including three days paid leave after three months of employment. Additional days may may be provided under provincial laws.
Maternity and paternity leave in Canada
Women who have worked for at least six months continuously can access paid maternity leave of up to 17 weeks upon submission of a medical note for proof. This period of leave can start up to 12 weeks before the birth date. Additionally, both parents can access unpaid parental leave of 37 weeks, or unpaid standard leave of 61 to 63 weeks (depending on province).
Employee severance and terminations in Canada
When terminating employees in Canada, employers are required to adhere to a ‘reasonable’ notice period, or a payment in place of notice. The minimum notice period varies by location, and may be stipulated in an employment contract. Several factors may be considered when determining a ‘reasonable’ notice period, such as the age of the employee, the nature of their role, and so on.
Additionally, employees who are terminated without proper cause can be entitled to severance pay. At a federal level, employees who have worked for more than one year continuously are entitled to either two days of wages per year of employment, or five days wages (whichever is greater).
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. New Horizons’ Canada PEO can mitigate risk for foreign companies and provide guidance through this process.
Taxation in Canada
Taxation in Canada is complex and it is another area where both federal and provincial laws apply
Canada operates a progressive tax model, with higher earners paying a significantly higher proportion of their income in income tax. There is a federal rate, which varies from 0% to 33% as of 2020, which includes a portion for pension plans and employment insurance, and an additional provincial rate, which can vary significantly depending on income level and location.
In addition to the federal pension and employment insurance, other tax-funded social programs are run on a provincial basis, with funding taken from income tax and varying by location.
Health insurance in Canada
Canada has a social healthcare system which covers residents and workers with most of their necessary healthcare. The level of coverage varies by province, and some offer more comprehensive cover (such as drug cost and dental), but core medical expenses are covered nationwide by taxes.
It is relatively common, but not necessary, for employers in Canada to provide extra health-related benefits, such as dental, life insurance, and so on.