Corporate / M&A Law, Franchise & Distribution Law

Doing Business in Canada Series – Part 1: Canada’s Legal System

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With its stable political and economic landscape, independent governments and courts, skilled workers and high standard of living, Canada is an attractive jurisdiction for carrying on business. Moreover, with its close proximity to the US, and the North American Free Trade Agreement (between Canada, the United States and Mexico), Canada provides foreign business enhanced access to the North American market.

The Laws of Canada. Canada is a federal state where law making power is divided between the federal, provincial and municipal governments. Businesses should therefore expect to be regulated by one or more of these levels of government, and clearly understand their rights and obligations pursuant to such regulation. The federal government has legislative jurisdiction over matters such as the regulation of trade and commerce, banking and currency, bankruptcy and insolvency, intellectual property, criminal law and national defence. The provincial governments have legislative jurisdiction over matters such as real and personal property, civil rights, education, healthcare and intra provincial trade and commerce. Certain aspects of provincial powers are delegated to municipal governments. For the most part, provincial laws are likely to have most impact on businesses expanding to Canada.

The Canadian Charter of Rights and Freedoms is entrenched in the Constitution, and deals with fundamental rights and freedoms between individuals, groups and government, but does not apply to businesses that are independent of the government.

System of Government. Canada has an elected parliamentary system of government, divided between the federal government, ten provincial governments and three territorial governments. Nine of the ten provinces, and all three territories, have legal systems which are modelled after the English precedent-based system of common law (as in the United States and Australia). One province, namely Quebec, is the only province in Canada where French is the sole official language, and which has a civil law system  based on the French Code Napoleon, conceptually similar to that of other European countries.

Canadian Courts. Historically, Canada tended to attach more significance to British case law precedent, but in recent years American case law precedent has had greater influence on judicial reasoning, particularly with respect to commercial matters.

In the next topic of this blog series, we will explore business structures and organizations in Canada.

Successful international expansion requires a robust strategy and a valuable partner. Canada has unique considerations when it comes to feasibility analysis (e.g. product/service adaptation), structuring (e.g. priority of regions and optimum corporate structures) as well as its laws. Dickinson Wright’s capabilities and extensive network make us an excellent partner to facilitate your growth in the ever-expanding and lucrative Canadian market.

This article is published to inform clients and contacts of important aspects and developments in Canadian law. The content is informational only and does not constitute legal or professional advice. We encourage you to consult a Dickinson Wright lawyer if you have specific questions or concerns relating to any of the topics covered here.

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