Economic & Business Laws — Canada

Economic and Business Laws for Immigrants to Canada

*Note: Immigration and business laws change frequently. Always verify current details with IRCC (Immigration, Refugees and Citizenship Canada), CRA (Canada Revenue Agency), and provincial authorities before making decisions.*

1. Right to Work by Visa/Status Type

Permanent Residents (PR)

• Full right to work for any employer, in any occupation, anywhere in Canada
• No work permit required
• Must maintain PR status by residing in Canada at least 730 days in every 5-year period
• Can be employed, self-employed, or start a business immediately

Temporary Foreign Workers

• Employer-Specific Work Permits: Tied to a single employer, job, and location (often requires Labour Market Impact Assessment - LMIA)
• Open Work Permits: Allow work for any employer (exceptions: businesses with ineligible status like those offering striptease/escort services)
• Available to: spouses of skilled workers/international students, some Post-Graduation Work Permit holders, certain Bridging Open Work Permit applicants, Working Holiday visa holders (IEC program)
• International Mobility Program (IMP): LMIA-exempt categories including CUSMA/USMCA professionals, intra-company transferees

International Students

• Study permit allows on/off-campus work up to 24 hours/week during academic sessions (as of Nov 2024; previously 20 hours), full-time during scheduled breaks
• Must be enrolled in Designated Learning Institution (DLI) full-time program
• Co-op/internship work requires separate work permit if part of curriculum

Visitors

• Generally cannot work without authorization
• Limited exceptions: business visitors attending meetings/conferences without entering Canadian labor market

Refugee Claimants

• Can apply for open work permit while claim is being processed (typically eligible after 4 months if claim isn't resolved, subject to policy changes)

Post-Graduation Work Permit (PGWP)

• Open work permit for 8 months to 3 years depending on program length
• No LMIA required

2. Starting a Business as a Foreign National

As a Non-Resident/Foreign National

• Can incorporate a business in Canada without being a resident (federal incorporation doesn't require Canadian residency, though most provinces require at least one Canadian-resident director; exceptions include BC, Ontario post-2021 reforms, Quebec)
• Cannot work in the business without proper authorization (work permit or PR status)
• Common pathway: Owner/Operator LMIA route - foreign entrepreneur buys/starts business, obtains LMIA-supported work permit to manage it

Business Immigration Pathways

• Start-up Visa Program: For innovative entrepreneurs with support from designated Canadian venture capital, angel investor group, or business incubator; leads directly to PR
• Provincial Nominee Programs (PNP) - Entrepreneur Streams: Each province has own investment thresholds (typically CAD $150,000–$600,000+) and job creation requirements
• Self-Employed Persons Program: For those in cultural activities or athletics with intent to be self-employed
• Intra-Company Transfer: For executives/managers/specialized knowledge workers transferring to a Canadian branch

Business Structure Requirements

• Sole proprietorships/partnerships available but typically require work authorization
• Federal corporations regulated under Canada Business Corporations Act (CBCA)
• Provincial incorporation options vary (Ontario Business Corporations Act, BC Business Corporations Act, etc.)
• GST/HST registration required if revenue exceeds $30,000/year

3. Foreign Investment Restrictions

Investment Canada Act (ICA)

• Reviews significant foreign investments/acquisitions of Canadian businesses
• Review thresholds (2024, subject to annual adjustment):
• WTO investors (most countries): ~CAD $1.99 billion (enterprise value) for direct acquisitions
• State-owned enterprises: lower threshold (~CAD $528 million)
• Trade agreement partners (CUSMA countries): higher threshold (~CAD $1.98+ billion)
• National Security Review: Can apply to any foreign investment regardless of size, particularly sensitive sectors (critical minerals, technology, defense)

Sector-Specific Restrictions

• Telecommunications: Foreign ownership capped at 20% direct voting shares (up to 33.3% for holding company structures) - relaxed for companies with <10% market share
• Broadcasting: Foreign ownership restrictions apply (Canadian control required)
• Banking: Foreign bank subsidiaries permitted but regulated under Bank Act; ownership restrictions on large banks
• Airlines: Foreign ownership capped at 49% (increased from 25% in 2018)
• Uranium mining: 51% Canadian ownership required at production stage

Recent Trends (2023-2024)

• Increased scrutiny on Chinese state-owned investments in critical minerals
• Enhanced national security review powers under amended ICA (2024)

4. Property Ownership Rights

Non-Resident/Non-Citizen Ownership

• No restriction on foreign nationals owning property in most of Canada (unlike many countries)
• Foreign Buyer's Ban (Prohibition on the Purchase of Residential Property by Non-Canadians Act):
• In effect since January 1, 2023, extended to January 1, 2027
• Prohibits non-Canadians from purchasing residential property (with exceptions)
• Exemptions: work permit holders meeting certain criteria, refugees, diplomats, international students (with conditions: degree program, tax filings, ≤$500,000 purchase price), some temporary residents

Provincial Foreign Buyer Taxes

• British Columbia: Additional Property Transfer Tax of 20% for foreign buyers in specified areas (Metro Vancouver, Fraser Valley, Capital Regional District, etc.)
• Ontario: Non-Resident Speculation Tax (NRST) of 25% (Greater Golden Horseshoe Region and expanded provincewide)
• PRs and citizens exempt from these additional taxes

Permanent Residents

• Full property ownership rights identical to citizens
• Eligible for standard mortgage rates (though lenders may require longer credit history)
• Not subject to foreign buyer restrictions/taxes

Property Types

• Foreign buyer ban primarily targets residential properties in Census Metropolitan Areas/Census Agglomerations
• Commercial real estate, recreational properties, and larger residential properties (>3 units) generally exempt

5. Banking Access for New Immigrants

Opening Bank Accounts

• No SIN or credit history required for basic account opening at major banks (RBC, TD, Scotiabank, BMO, CIBC)
• Newcomer banking packages commonly offered:
• Waived monthly fees (typically 6-12 months)
• No-fee international money transfers (promotional periods)
• Starter credit cards without credit history requirement
• Required documents: Passport, PR card/confirmation of PR, or work/study permit; proof of address (sometimes waived initially)

Credit Building

• Newcomers have no Canadian credit history (foreign credit history not transferable)
• Secured credit cards available immediately (deposit-backed)
• Credit history typically takes 6-12 months of responsible use to establish meaningful score
• Credit bureaus: Equifax Canada, TransUnion Canada

Banking Regulations

• Banks regulated federally under Bank Act; overseen by OSFI (Office of the Superintendent of Financial Institutions)
• Financial Consumer Agency of Canada (FCAC) enforces consumer protection, including right to open a bank account (with limited exceptions like fraud risk)
• Cheque holds may apply longer for newcomers without established banking history

Mortgages for Newcomers

• Some banks offer newcomer mortgage programs (e.g., RBC Newcomer Mortgage) allowing home purchase with limited/no Canadian credit history
• Higher down payment often required for non-PR/non-citizens (35%+ for non-residents typically)
• PRs/citizens eligible for standard down payment rules (5-19.99% for insured mortgages under $1.5 million, effective Dec 2024 rule changes)

6. Labor Law Protections for Immigrant Workers

Federal Protections

• Canadian Human Rights Act: Prohibits discrimination based on national/ethnic origin, race, in federally regulated industries
• Provincial Human Rights Codes: Similar protections for provincially regulated employment (most workplaces)

Employment Standards (Provincial Jurisdiction - Varies by Province)

• Minimum wage (varies: e.g., Ontario $17.20/hour, BC $17.40/hour as of 2024 - verify current rates)
• Overtime pay, statutory holidays, vacation pay (minimum 4% of wages/2 weeks after 1 year in most provinces)
• Termination notice/severance requirements

Temporary Foreign Worker Program (TFWP) Specific Protections

• Employers must provide same wages as stated in job offer/LMIA
• Employer-specific work permit holders protected under:
• Right to change employers (via Vulnerable Worker Open Work Permit) if experiencing abuse
• Mandatory employer compliance reviews/inspections
• Prohibition on charging recruitment fees to workers (varies by province, but generally illegal for employers to pass LMIA costs to workers)
• Migrant Worker Support programs vary by province (e.g., Ontario's Employment Protection for Foreign Nationals Act)

Key Vulnerabilities & Protections

• Recruitment fee bans: Most provinces prohibit recruiters from charging fees to foreign workers (Ontario, BC, Manitoba, others have specific legislation)
• Housing standards: For agricultural workers, employer-provided housing must meet standards (varies by province/program - Seasonal Agricultural Worker Program has specific requirements)
• Reporting mechanisms: Confidential tip line for TFWP violations; IRCC/ESDC conduct employer inspections
• Removal of employer ties: 2024 reforms discussed to reduce dependency on single employers for some TFWP streams (monitor policy developments)

Union Rights

• Immigrant workers (regardless of status) generally have right to join unions under provincial labour relations acts
• Some exceptions/complexities for certain temporary worker categories in practice

Enforcement Bodies

• Provincial labour ministries (e.g., Ontario Ministry of Labour)
• Employment and Social Development Canada (ESDC) for TFWP compliance
• Canada Border Services Agency (CBSA) for status-related issues

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Key Recommendations

• Consult a Regulated Canadian Immigration Consultant (RCIC) or immigration lawyer for status-specific work rights
• Verify current investment thresholds annually via Innovation, Science and Economic Development Canada (ISED)
• Check provincial-specific rules for foreign buyer taxes, business incorporation residency requirements, and employment standards (they vary significantly)
• Confirm PGWP/work permit conditions directly through IRCC's official portal, as post-pandemic policies have shifted frequently
• **Review CRA guidance on tax residency status, as this affects both personal and business tax obligations differently from immigration status
• Monitor policy changes - Canada's immigration and foreign investment rules have shifted significantly in 2023-2024 (foreign buyer ban extension, ICA amendments, TFWP reforms) and are likely to continue evolving
• Provincial variations matter significantly - Business incorporation residency requirements, foreign buyer taxes, employment standards, and minimum wage all differ by province/territory, so location-specific research is essential
• Verify LMIA and work permit conditions carefully before starting employment or business activities, as violations can jeopardize both current status and future immigration applications

Additional Resources for Verification

• IRCC website (canada.ca/immigration-refugees-citizenship) - official work permit/PR rules
• Innovation, Science and Economic Development Canada (ISED) - Investment Canada Act thresholds
• CRA website - tax residency, business registration, GST/HST requirements
• Provincial employment standards branches - minimum wage, termination rules, leave entitlements
• Financial Consumer Agency of Canada (FCAC) - banking rights and newcomer protections
• Employment and Social Development Canada (ESDC) - TFWP compliance and worker protections
• Provincial law societies - referrals to immigration and business lawyers
• Settlement service agencies (often funded by IRCC) - free newcomer guidance on banking, credit, and employment rights

Given the complexity and frequency of regulatory changes, especially around foreign buyer restrictions, investment thresholds, and TFWP reforms, immigrants should treat this overview as a starting framework and confirm specifics with official government sources or licensed professionals before making significant financial, business, or employment decisions.

More about immigrating to Canada