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Canada is a North American nation. Its 10 provinces and three territories span about 9.98 million square kilometers (3.85 million square miles), making it the world's second-largest nation by total area. Its southern and western border with the United States is the world's longest bi-national land border, reaching 8,891 kilometers (5,525 miles). The capital of Canada is Ottawa, and its three most populous cities are Toronto, Montreal, and Vancouver.
Indigenous peoples have lived in what is now Canada for thousands of years. British and French expeditions began exploring and settling along the Atlantic coast in the 16th century. In 1763, France relinquished practically all of its North American possessions as a result of several violent battles. Canada was created as a federal dominion of four provinces in 1867, after the amalgamation of three British North American colonies via Confederation. This triggered the accretion of provinces and territories, as well as a trend of growing independence from the United Kingdom. The Statute of Westminster 1931 underlined this growing autonomy, which culminated in the Canada Act 1982, which removed the last vestiges of legal dependency on the United Kingdom's Parliament.
Canada is a Westminster-style parliamentary democracy and constitutional monarchy. The country's head of government is the prime minister, who is chosen by the elected House of Commons and is appointed by the governor-general, who represents the monarch, who acts as head of state. The nation is a Commonwealth realm, and the federal government is officially multilingual. In worldwide comparisons of government openness, civil freedoms, quality of life, economic freedom, and education, it rates among the top. It is one of the world's most ethnically diverse and cosmopolitan nations, the result of mass immigration from a variety of other countries. The lengthy and complicated connection between Canada and the United States has had a considerable influence on its economy and culture.
Canada is a developed nation with the 24th greatest nominal per capita income in the world and the sixteenth highest position in the Human Development Index. Its sophisticated economy is the world's eighth-largest, owing mostly to its enormous natural resources and well-developed international trade networks. The United Nations, NATO, the G7, the Group of Ten, the G20, the Organisation for Economic Co-operation and Development (OECD), the World Trade Organization (WTO), the Commonwealth of Nations, the Arctic Council, the Organisation Internationale de la Francophonie, the Asia-Pacific Economic Cooperation forum, and the Organization of American States are all members of Canada.
Alberta
Employees receive paid sick time depending on their length of service. Employees must use their paid leave within the year of which it was received.
If you have worked for less than a year, you are not entitled to any benefits unless your job contract states otherwise.
2 weeks paid leave after 1-5 years of work
3 weeks paid leave after 5 years of work
Both workers who are in quarantine due to COVID-19 are liable for 14 days of unpaid leave as of March 5, 2020.
British Columbia
Employees get paid leave in their first year of work and will use it the next year. If an employee wishes to take holiday days before completing one year of work, they must file a written order. So long as the employee is informed, the employer may subtract the holiday from future eligibility.
From 1 to 5 years of service, the employee is entitled to a period of 2 weeks of paid leave, increasing to 3 weeks after 5 years.
For the first five years of work, vacation pay is at least 4% of salaries earned the previous year, and from the fifth year forward, it is at least 6% of wages. In general, holiday pay can be accrued to employees at least 7 days before they are scheduled to take paid leave, or this amount will be paid out annually if settled upon in writing.
Ontario:
Employees who have served for fewer than five years are entitled to two weeks of paid leave, and those who have worked for more than five years are entitled to three weeks.
Quebec:
Unless otherwise settled upon, the annual leave year runs from May 1 to April 30 and varies based on how long the person has been working. The employee is also granted additional compensation:
Employed for less than a year: 1 day for every month worked and a 4% indemnity
2 weeks + 4% indemnity for 1-3 workers who have worked for 1 to 3 years
For workers with more than 3 years of work experience: 3 weeks + 6% indemnity
Alberta:
Canada (Alberta) recognizes nine public holidays.
British Columbia:
British Columbia recognizes ten public holidays.
Ontario:
Ontario recognizes nine public holidays.
Quebec:
Quebec has eight national holidays. If a holiday occurs on a weekend, it is celebrated on the Friday preceding the weekend or on the Monday after the weekend.
Alberta:
Employees are entitled to up to 16 weeks of sick or injured leave. Employees must have worked for at least 90 days to provide a medical report to be qualified.
The government has declared that those returning to Canada from non-essential travel (such as vacations) would no longer be available for the $500 weekly sickness benefit under the Canada Recovery Sickness Benefit (CRSB), which was designed to help offset the cost of quarantine upon arrival.
British Columbia:
Employees in British Columbia are not entitled to paid sick leave. The boss, on the other hand, will be able to do this as a bonus.
The government has declared that those returning to Canada from non-essential travel (such as vacations) would no longer be available for the $500 weekly sickness benefit under the Canada Recovery Sickness Benefit (CRSB), which was designed to help offset the cost of quarantine upon arrival.
Ontario:
When an employee has worked for more than two weeks, they are entitled to three missed sick days every year.
The government has declared that those returning to Canada from non-essential travel (such as vacations) would no longer be available for the $500 weekly sickness benefit under the Canada Recovery Sickness Benefit (CRSB), which was designed to help offset the cost of quarantine upon arrival.
Quebec:
When an employee has been working for at least three months, they are entitled to two days of paid leave every year. Employees must contact their employers if they are sick for an extended amount of time. The employer has the right to seek evidence if the cause for absence is repeated.
The government has declared that those returning to Canada from non-essential travel (such as vacations) would no longer be available for the $500 weekly sickness benefit under the Canada Recovery Sickness Benefit (CRSB), which was designed to help offset the cost of quarantine upon arrival.
Alberta:
Employees who have worked for at least 90 days in a row are entitled to 16 weeks of sick leave. Leave will start up to 13 weeks before the expected due date. If the company allows for an early return and the employee receives a medical report confirming that it is legal, 6 weeks must be taken after the birth.
If an employer notices that the pregnancy is messing with the employee's ability to function, the employer has the right to ask the employee to begin maternity leave sooner.
British Columbia:
A individual is entitled to free maternity leave for 17 weeks. The leave must begin prior to the child's birth and can begin as early as 13 weeks prior to the anticipated due date. The woman must take at least 6 weeks off after giving birth.
If they want to return to work sooner, they must first get consent from a psychiatrist.
If the woman is unable to return to work after the necessary six weeks, her leave will be extended for another six weeks.
Ontario:
The worker is entitled to up to 17 weeks of free maternity leave after she has worked for at least 13 weeks. Maternity leave will begin as early as 17 weeks prior to the due date.
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Quebec:
A individual is entitled to free maternity leave for a total of 20 weeks. The mother will choose if she divides her maternity leave between before and after the pregnancy, but it cannot be taken before 16 weeks before the due date. The week the infant is born is not included in the parental leave if it begins on the day of the birth.
The employer has the right to obtain a medical report confirming that the employee is prepared for work from the 6th week before the due date, and if the employee does not give one within 8 days, the employer may order the employee to begin maternity leave.
Alberta:
Paternity leave falls under parental leave.
British Columbia:
In British Columbia, parental leave is considered the umbrella term that encloses paternity leave.
Ontario:
Parental leave encloses paternity leave.
Quebec:
Fathers are entitled to 5 weeks of unpaid leave, which will begin as early as one week before the scheduled due date.
The boss must be informed at least three weeks before the start of paternity leave; but, if the infant appears before the scheduled due date, this period will be cut in half.
Alberta:
Birth and foster parents are entitled to a total of 62 weeks of unpaid leave. Parental leave will begin at any time after the child's birth or adoption, but it must be completed within 78 weeks of the child's birth.
Ontario:
The mother will prolong her maternity leave with parental leave for up to 61 weeks of accrued parental leave at the completion of her maternity leave. The father is therefore entitled to parental leave.
Quebec:
For a newborn or newly adopted child, each parent is entitled to up to 78 weeks of parental leave.
Parental leave should be combined with maternity or parental leave to create a total of 70 weeks of leave.
Alberta:
Bereavement Leave: For the death of an immediate or extended family member, employees with at least 90 days of continuous leave are entitled to three days of bereavement leave each year. Unless otherwise specified in the work contract or collective bargaining agreement, this leave is unpaid.
Long term and Injury Leave: Employees who have worked for at least 90 days will take up to 16 weeks of unpaid leave.
British Columbia:
Bereavement Leave: Employees are entitled to three days of compulsory leave in the event of the death of a close relative. This leave may be taken in any order; the employee is not required to take it in that order.
Work-Related Injury Leave: In British Columbia, any significant accidents and deaths must be reported to WorkSafeBC as soon as possible after they occur.
In addition, within three days of an injury, the supervisor must disclose any of the following:
During a work-related accident, the employer passes out.
The employee is taken to a medical facility for treatment (i.e. hospital, clinic).
The employee is treated for his or her injuries.
Owing to the incident, the employee is unable to return to work.
A surgical implant was broken as a result of the accident (i.e. an artificial limb, glasses, dentures, hearing aid, etc.)
If the employee demands that the boss file a survey.
For the first 10 weeks of leave, WorkSafeBC will specify a pay amount at which the employee will be entitled. The fund will either cancel the compensation or grant the employee permanent disability after this time limit has passed.
Quebec:
Personal Emergency Leave: 10 days for personal sickness, accident, or medical emergency, or for a family member's illness, injury, or medical emergency.
Family Medical Leave: In a 26-week cycle, you will take up to 8 weeks of unpaid leave.
Work-Related Injury Leave: The contractor must pay 100 percent of the daily wage on the day of the accident and 90 percent for the first 14 days of work-related injury leave. The Commission des normes, de l'équité, de la santé and de la sécurité du travail (CNESST) assumes payment to the employee on the 15th day at a cost of 90% of the net profits.
If the employee becomes medically or mentally injured, they could be eligible for extra payments based on their age and the seriousness of the injuries.
In Canada, both fixed-term and indefinite term employment contracts are customary. However, courts often find that a fixed-term employment contract has turned into an indefinite one when the same contract gets repeatedly renewed or if the Canadian employee continues to work post the contract's expiry. When it comes to employment termination, the employer of record has to comply with the notice periods outlined in the Canadian labour laws and local labor laws.
Employers in Canada are mandated by Canadian laws to give reasonable notice of termination or remuneration instead of the notice to workers. The notice period varies with the employee's length of service and is stipulated in the local employment laws and federal jurisdiction. Under Canadian employment law, employees also get "reasonable" notice, generally exceeding the statutory minimum.
Canadian employers have to provide a two-week written notice to employees before termination. This is an important component of Canada employment contracts. If employers wish, they can offer pay in lieu of this notice. This notice period is waived in cases like employee resignation, termination for work-related misconduct, or contract employment termination.
Probation periods are commonplace in Canadian employment contracts. These periods typically last for three months but can range from 3 to 6 months depending on the province. It's worth noting that if an employer terminates an employee during the probation period, the latter may be entitled to notice pay, as stipulated in the employment agreement.
Under Canadian laws, severance pay is available to employees who have been with their employer for at least a year. Employees with a minimum of 12 months of continuous service receive one week's salary for each year of service, up to a maximum of 26 weeks.
However, the actual amount of severance pay is determined by a variety of factors, including the employment agreement, any relevant collective bargaining agreements, and provincial regulations. Statutory benefits like unemployment insurance or long term disability insurance also come into play.
The standard workweek in Canada, as outlined by the local labour laws, is 40 hours, split across five days. Federally regulated employees, such as those in federally regulated industries, are entitled to a day of rest every week, usually on a Sunday. If a holiday, such as Canada Day or Victoria Day, falls on a weekday, the work week is shortened by eight hours. A week's maximum work hours for an employee is 48, but this limit can be exceeded in some situations.
Regulations regarding working hours and overtime vary considerably across Canada. Most provinces offer an overtime rate equal to 150 percent of an employee's regular pay. This applies after 44 hours in Ontario and 40 hours in Quebec. Employers cannot compel employees to work excessive hours or refuse to pay overtime rates. They also cannot fire or deport employees who refuse or complain about overtime work.
The current minimum wages across the provinces in Canada are as follows:
Alberta has a minimum hourly wage of USD 15.
British Columbia has a minimum hourly wage of USD 15.20.
Manitoba has a minimum hourly wage of USD 11.90.
New Brunswick has a minimum hourly wage of USD 11.75.
Newfoundland and Labrador has a minimum hourly wage of USD 12.50.
Northwest Territories has a minimum hourly wage of USD 13.46.
Nova Scotia has a minimum hourly wage of USD 12.95.
Nunavut has a minimum hourly wage of USD 16.00.
Ontario has a minimum hourly wage of USD 14.25.
Prince Edward Island has a minimum hourly wage of USD 13.00.
Quebec has a minimum hourly wage of USD 13.50.
Saskatchewan has a minimum hourly wage of USD 11.45.
Yukon has a minimum hourly wage of USD 13.85.
The Canadian social security system provides a majority of healthcare benefits to workers and residents. Every citizen has a Medicare card, which entitles them to free healthcare in their province, as well as child care benefits. Some provinces charge a separate fee for this system, while others fund it through taxation or contributions.
The Canadian health-care system was founded on the premise that all Canadians would get all "medically necessary and hospital physician services." Each of Canada's ten provinces and three territories funds and administers a statewide health insurance program. There is no cost-sharing for the federally mandated health-care services. While Canadians are guaranteed access to hospital and physician services, it is up to each province to decide whether or not to pay “supplementary” benefits such as dental care and prescription coverage.
To cover these treatments, around two-thirds of Canadians purchase private supplemental insurance policies.Counter:TheEmployerOfRecord.AI>>, 8. Employee benefits The majority of healthcare benefits are provided by the social security system to workers and residents. Every citizen has a Medicare card, which entitles them to free healthcare in their province, as well as child care benefits. Some jurisdictions charge a separate fee for this system, while others fund it through taxation or contributions.
The Canadian health-care system was founded on the premise that all Canadians would get all "medically necessary and hospital physician services." Each of Canada's ten provinces and three territories funds and administers a statewide health insurance program. There is no cost-sharing for the federally mandated health-care services. While Canadians are guaranteed access to hospital and physician services, it is up to each province to decide whether or not to pay “supplementary” benefits such as dental care and prescription coverage.
To cover these treatments, around two-thirds of Canadians purchase private supplemental insurance policies (or have an employer-sponsored plan). In Canada, doctors are often reimbursed by the government at a negotiated fee-for-service rate. Many candidates today anticipate that the employer will provide extra benefits such as private health insurance, dental and vision plans, income security (disability), and life insurance. Employers frequently provide additional health and dental insurance, as well as group savings schemes.
The Canadian social security system and the Canada Pension Plan are two major avenues of public pension benefits, demonstrating the government's commitment to safeguard its citizens. The Canada Pension Plan provides all eligible contributors and their families with partial replacement of earnings upon retirement, disability, or death. Almost everyone who works inside Canada is required to contribute to the Canada Pension Plan. Furthermore, Employment Insurance (EI) is a federal jurisdiction scheme providing temporary income support to unemployed workers while they look for work or upgrade their skills.
Large companies in Canada are subject to the higher corporate tax rate that ranges from 26.5 percent to 31 percent. The smaller enterprises are subject to a corporate tax rate of between 9 percent and 13 percent.
Corporations and companies pay corporate tax on their profits and capital. These constitute a very little percentage of overall tax income. Corporate income is taxed at the corporate level before being dispersed to individual shareholders as dividends. Individuals who earn dividends are given a tax credit to offset the tax paid at the corporate level. This credit, however, does not fully remove double taxation of this income, resulting in a greater level of taxes on dividend income than on other kinds of income. When income is obtained in the form of a capital gain, only half of the gain is taxed; the other half is not.
Individuals in Canada are imposed an income tax rate that ranges from 19 percent to 54 percent. The actual percentage varies depending on the income tax bracket the individual belongs to. Individual income taxes have been levied by both the federal and provincial governments, and they are the most important sources of revenue for both levels of government, accounting for more than 45 percent of tax revenue. Except in Quebec, the federal government collects the majority of income taxes, with the provinces collecting a somewhat smaller proportion. Income taxes in Canada are progressive, with high-income people paying a greater proportion than low-income ones. When income is obtained in the form of a capital gain, only half of the gain is taxed; the other half is not.
Settlements and legal damages are usually not taxed, even when they occur as a consequence of a breach of contract in an employment connection (other than unpaid wages). The Canada Revenue Agency's website displays federal and provincial income tax rates. Personal income tax may be delayed in a Registered Retirement Savings Plan (RRSP), which may incorporate mutual funds and other financial instruments and is designed to assist people in saving for retirement. Tax-Free Savings Accounts enable individuals to hold financial instruments without being taxed on their earnings.
In Canada, the value-added tax (VAT), known as the Goods and Services Tax (GST), is levied on most goods and services. The standard rate for the GST ranges from 5 percent in Alberta to 15 percent in New Brunswick. The tax is applied at the point of sale and is collected by businesses on behalf of the government. Certain items may be exempt or subject to a reduced rate, depending on the jurisdiction and the nature of the goods or services.
The Canadian government has established the Temporary Foreign Worker Program to facilitate the employment of foreign individuals in Canada for a specific period. This program covers various levels of employment responsibilities and knowledge requirements and is utilized when there is a shortage of qualified Canadian citizens or permanent residents for a particular role.
Both the federal government and provincial governments, such as the Government of Alberta, have immigration programs in place. The Alberta Immigrant Nominee Program (AINP) is the provincial program in Alberta that allows the government to nominate individuals for permanent residency. However, the final decision on granting permanent residency rests with the federal government. The AINP is designed to meet the labor and entrepreneurship needs of the province, and it seeks candidates with different skills and expertise to support the growth of Alberta's economy. Similar federal and provincial immigration programs exist in British Columbia, Ontario, and Quebec.
Termination, probation, working hours, pay and leaves, bonuses, and other benefits should all be addressed in employment contracts.
Prospective workers might be subjected to background checks by their employers. These tests, however, must be confined to information such as:
Criminal background
Education
Employment history
Reference check
When partnering with Rivermate as your Employer of Record (EoR) in Canada, you can rely on our expertise to handle employment contracts on your behalf. We take care of the necessary documentation and ensure that all legal requirements are met. This allows you to focus on your core business activities while we handle the complexities of Canadian employment law.
Minimum assignment length may vary depending on the specific employment contract, and it is typically specified in fixed-term employment agreements.
Payment currency in Canada is the Canadian Dollar (CAD), and all remuneration and financial transactions are conducted in this currency.
You have three alternatives for establishing a presence in Canada: as a corporation, a partnership, or an extra-provincial company. Here are the distinctions between the three.
Corporations: Incorporation is done at either the federal or provincial level. Your company is treated as a distinct legal entity from its shareholders, and shareholders are not personally accountable for any debts, actions, or other responsibilities.
Partnerships: The two forms of partnerships include general or limited. In rare cases, your company may subsequently be formed as a limited liability partnership.
Extra-Provincial Corporation: Incorporation is only available at the provincial level, and each province has its unique set of rules. Your firm will not be required to employ a certain proportion of Canadians, thus it may be entirely foreign-owned and directed.
Canada subsidiary rules differ depending on the province in which you operate. If you want your subsidiary to function under certain circumstances, you should look for a place with a climate that is favorable to your company. For example, in Ontario, Alberta, Manitoba, Saskatchewan, Newfoundland and Labrador, at least 25% of the subsidiary's directors must be Canadian residents.
Consider where you want to do business in Canada. If you are formed under the federal rules of the nation, you must register in each province where you want to do business.
When establishing your subsidiary, it's also a good idea to think about things like current trade agreements and the nationality of your headquarters. Although English is the official language of Canada, distinct provinces may have their own dialects, such as French.
