7 advantages of doing business in Canada

June 14, 2022

advantages of doing business in Canada

With its stable economy, geographic accessibility and skilled workforce, Canada is an attractive market for companies looking to grow business internationally.

Let’s review the advantages of doing business in Canada:

1. Canada is geographically accessible

Logistically and geographically speaking, Canada is an excellent place to do business. 

Canada is a vast landmass whose transportation infrastructure and physical location make it one of the most accessible countries in the world, and well-positioned to serve foreign business or entrepreneurs for the following reasons:

  • Canada is bound by three oceans—the Atlantic, Pacific and Arctic—providing significant access to ocean-bound transport networks.
  • Canada boasts over 550 seaports, making it a major hub for massive-scale shipping and receiving.
  • Canada features over 1,000 airports and 370 heliports, providing employees, company leadership and stakeholders easy access to their Canadian operations.

For international employers, Canada’s size, transit infrastructure, and relative proximity to major global markets make it an excellent place to not only recruit talent but also to ensure easy access to the workforce.

2. Canada has a stable economy

Canada has a well-established history of positive economic growth and performance, making it a financially safe place to do business.

Canada remains one of the most stable economies around the globe. Wages steadily increase, the prices of goods and services don’t majorly fluctuate, and citizens and employers alike can expect its infrastructure to remain functional and funded. To wit:

  • Canada’s economy recovered quickly from the COVID-19 pandemic, implementing widespread worker vaccination and financial relief for struggling citizens.
  • For decades, Canada has touted small margins between its total potential economic output and its actual demonstrated productivity
  • Inflation in Canada is generally low, and the Canadian dollar has historically been a highly stable world currency.

Workers in stable economies have increased access to resources, fewer worries about living costs, and improved access to quality infrastructure and utilities. It’s therefore safe to say that Canada’s economic stability bolsters the strength of the Canadian workforce.

3. Canada’s corporate income tax rates are low

Foreign businesses looking to expand their presence in Canada will be pleased with the tax requirements, including the country’s low corporate income tax rate and generally sensible tax codes. 

Canada boasts the lowest business tax burden among G7 countries. Some of the country’s tax policies specifically contribute to decreased business tax liability:

  • Corporate tax rates are low compared to other Western countries
  • The territorial tax system prevents repatriation taxes on foreign profits
  • Corporate taxes and shareholder taxes are integrated to prevent double taxation

Canadian companies support government operations and public services by paying reasonable taxes, but they also maintain the capital to contribute to the economy by:

  • Employing more workers, whose wages give them consumer power
  • Investing in private infrastructure projects that stimulate the economy
  • Providing high-quality products at competitive prices to keep money flowing

Companies seeking expansion in Canada are in luck—low tax rates are just one of the ways Canada attracts new businesses and foreign investors to the country.

4. Canada supports a skilled workforce

Hiring in Canada is a positive proposition for international employers, due in part to its unique workforce. Canadians are skilled workers, and they represent diverse backgrounds, both factors that can lead to increased productivity, innovation and profits.

The Canadian government prioritizes building a well-trained, skilled workforce that can positively contribute to both domestic and international economies. The government offers a variety of initiatives and incentives nationwide to prepare its workers for the ever-changing workforce, some of which include:

  • Continued, reliable access to labor market information and career outlooks
  • Equal opportunities for lifelong learning
  • Support for Indigenous skills development
  • Innovation in worker training and support systems and methods
  • Worker skill-building support that incorporates sustainable technologies

Canadian workers have another advantage—compared to other populations around the world, Canada is incredibly diverse:

  • Only 32.3% of Canadians consider themselves to be ethnically Canadian, with most residents self-describing their ethnicity as foreign.
  • Indigenous populations in Canada grow at twice the national rate. Over 20% of Canadians identify with either Indigenous heritage or non-Indigenous minority racial groups.
  • Nearly 22% of the Canadian population was born abroad, increasing the multilingualism of Canadian workers and bolstering global perspectives nationwide.

Harnessing a skilled, multicultural workforce can facilitate growth for international businesses and provide a strong foundation for global growth.

5. Canada welcomes immigrants

A diverse workforce only remains diverse when a nation is welcoming to migrants from around the world. Fortunately, Canada is welcoming to immigrants on both governmental and social levels:

  • Legislation in the 1960s and 1970s laid a foundation for an immigration policy that encourages migration and embraces multiculturalism. In addition, Canadian policies include immigrant-friendly procedures and positive incentives instead of punitive measures for migrants.
  • Canada embraces and promotes a multicultural national identity, both easing the transition for migrants and bolstering social support for a diverse population. Canada is a diverse nation, and the population generally wants it to stay that way.
  • Canadian citizens generally view immigration favorably. In a 2021 poll, less than 30% of Canadians expressed that they felt immigration numbers were too high. When citizens embrace immigration, they’re more likely to welcome newcomers and create a precedent for cultural acceptance.

6. Canada takes intellectual property protection seriously

For companies building unique, innovative technologies, products, services or systems, intellectual property (IP) protection is key for preventing idea theft. 

Domestic IP laws in Canada are robust, but the country’s international alliances strengthen its IP efforts even further. As of 2022, Canada is a signatory to five international IP treaties. These treaties positively impact the country’s IP law system in a variety of ways:

  • The Hague Agreement makes it even easier for domestic and international companies to file for IP patents via a centralized application.
  • Streamlined infrastructure allows patent holders to manage and maintain design rights in multiple jurisdictions with ease.
  • Industrial designs are protected for 15 years—a significant increase from Canada’s 10-year protection policy in 2018.
  • Decreased red tape allows IP owners to apply and file for patents, create appointments, and correct application errors quickly.
  • Robust electronic services provide widespread access to efficient, enhanced IP monitoring and application functions.

Even if you only plan to hire Canadian workers and won’t be selling your products to the Canadian market, you can be confident that your company’s proprietary materials will be well protected. 

7. Canada has access to large trade networks

Canada both encourages domestic businesses to expand globally and creates a welcoming landscape for foreign companies.

Canada’s portfolio of international trade agreements creates significant opportunities for a foreign company doing business in Canada. Three types of international agreements support international growth for Canada-based businesses:

  • Free trade agreements (FTAs): FTAs facilitate economic partnerships and eased regulations between Canada and other nations. 
  • Foreign investment promotion and protection agreements (FIPAs): FIPAs establish relationships between Canada and other countries, encouraging both parties to create favorable environments for investments, transparently share investment information and protect each other within domestic laws.
  • World Trade Organization (WTO) agreements: WTO agreements show Canada’s support for various international trade laws regarding specific legal stipulations for IP law, investments, tariffs, technologies and more.

While many trade agreements (of all three types) are already in force, dozens more are in a development stage—e.g., exploratory considerations, negotiations and signature collection. The trade networks these agreements bolster make Canada a major player in the world market and encourage international investment in its economy. 

Getting started in Canada

Although Canada is an excellent candidate for global expansion, many companies may not be ready to fully commit to entity establishment in order to do business the country. Fortunately, there's a solution—namely, a global employer of record— that lets organizations test the waters by hiring local workers without having to take on the often lengthy and costly entity registration process.

A global employment partner like a Canada employer of record hires workers on a company’s behalf, handling all local contract, HR and payroll requirements, while the client company manages the workers’ day-to-day contributions and performance.

Want to learn more about how an employer of record can help your business expand into Canada quickly and compliantly? Talk to one of our global solutions advisors today.

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