Hire in Canada

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Last updated at July 07, 2022
beautiful scenery in the country of canada

Currency

Canadian Dollar (CAD)

Capital

Ottawa

Time Zone

GMT-6

Key Country Facts

Introduction

Canada is the second largest country in the world by area. It is a parliamentary democracy, a constitutional monarchy and also a realm within the Commonwealth of Nations. The country’s capital city is Ottawa, although the largest metropolitan areas are Toronto, Montreal and Vancouver. With a total population of just over 35 million people, Canada ranks amongst the world’s leaders in measurements such as civil liberties, government transparency and quality of life.

Area

Canada covers a vast area, spanning nearly 10 million square kilometers in the northern part of North America. Itt borders the United States of America to the south. Otherwise surrounded by ocean: the Pacific to the west, the Arctic in the North and the Atlantic to the East.

Climate

As Canada is such a large country, the climate varies considerably from region to region. Winters can be very harsh, particularly in the North and in the interior. Snow cover is not uncommon for six months of the year. Conversely, summer temperatures can be quite high. Both the east coast and the west coast of Canada are usually more temperate.

Culture

The constitution of Canada promotes a just, equal and multicultural society. Indeed, Canada has one of the highest per capita immigration rates in the world. The culture reflects significant historical influences from the United Kingdom and France. Humor is an integral part of the Canadian identity, particularly satire and parody.

Religion

Canada has no official church and is religiously diverse. The constitution protects individual freedom of religion. Around 65% of Canadians identify as Christian of one denomination or another. Around 25% declare no religious affiliation. Islam is the largest non-Christian religion and is also the fastest growing.

Official Language

English and French are the official languages of Canada and have equal status in parliament and federal institutions. Other widely spoken languages in the country are Chinese (the mother tongue to over one million inhabitants), Punjabi, Spanish and several indigenous language groups.

Canada HR at a Glance

Employment Law

In Canada, the power of legislation, in general, is shared between the federal and the provincial governments. Employment law matters generally fall under the jurisdiction of the provinces. However, given that it is also legislated by common law, laws from province to province are generally quite similar. Quebec is the notable exception, as it operates on a civil law based on French Napoleonic code. Additionally, in Quebec, language laws require all written communications to employees, including offers and contracts of employment, to be prepared in French. This obligation is waived only if the employee consents to receiving the documentation in English.

Only a few distinct industries considered to be of national or international character are legislated directly by federal law. They include shipping, air transport, banking and telecommunications, among others.

As a result, most employers that operate in multiple Canadian provinces are required to comply with a range of legislation within each of these provinces.

Employment Contract

Canadian law does not require a written contract but it is nonetheless recommended. An employment contract should set out the terms and conditions of the employment relationship. If the contract is either unwritten, or only partially written, many terms may be implied by common law. 

In order to be enforceable, an employment contract must fulfill the essential elements of a binding contract at common law, including offer, acceptance and consideration. The contract must also not contravene any applicable legislation. 

In most employment contracts, the consideration is the exchange of remuneration for work. Employment contracts are subject to scrutiny and will not be enforceable if they do not comply with minimum employment provisions, occupational health and safety standards and human rights legislation. Ambiguity in an employment contract will generally be interpreted in the employee’s favor. 

Fixed-term contracts

Most employment agreements are for an indefinite term. When an employment agreement is for a fixed term, the employee may not be entitled to notice of termination if his or her employment is terminated when the contractual term expires. However, law courts are likely to find the employment contract was, in substance, one of indefinite duration if an employee continues to be employed once the contractual term has expired. The same rule of thumb applies if the employee continues to be employed by the same employer under consecutive fixed-term employment contracts, Employment standards legislation may also establish the maximum time frame a fixed-term employment contract can operate as such.

Contract Terms

Employment contracts in Canada can be indefinite, fixed-term, full-time, part-time or casual.

Employers can generally provide for differential treatment between these categories of employees However, basic employment standards apply to all categories in each Canadian jurisdiction. These employment standards set minimum legislative standards regarding matters such as minimum wages, hours of work, overtime pay, vacations, holidays and leaves of absence. Employees and employers may not waive or contract out of these rights, unless to provide more favorable conditions to employees.

Background Checks

Even when an individual has consented to a background check, the handling of personal information must be reasonable under the circumstances given the purpose for which it is being collected, used or disclosed. Employers must therefore have some justification for requesting employees to consent to a background check, criminal or otherwise.

British Columbia and Quebec require any criminal background check, and any decision relating thereto, to be directly relevant to the particular staff position at issue. At the other end of the spectrum, Alberta currently maintains no restriction against criminal background checks at all. Other provinces in Canada are positioned somewhere between these two extremes.

Employers generally should not conduct record checks until a conditional offer of employment has been made. Then it should be conducted only with employee’s consent and, often, participation).

Probation Period / Trial Period

If an employer wishes to hire an employee on a probationary basis to determine their suitability for the position, this should be clearly set out in a written employment contract. 

In most jurisdictions, a probationary period of up to three months is permitted. During the probationary period, an employer, in most provinces, can terminate an employee without being required to provide statutory notice of termination or payment in lieu.

The minimum notice period requirements for termination apply once a person has been employed for three months. Any agreement for a probationary period exceeding three months should clearly state the employee will be provided with statutory entitlements upon termination.

Working Hours

Most provinces have legislation that governs the maximum hours that employees may work. Such legislation sets parameters for the maximum daily and weekly figures. This is typically eight hours per day and 40 hours per week. 

In certain situations, these maximum hours of work may be exceeded, such as where overtime is paid, where the employee agrees or where there is an emergency situation. In some provinces, specific provisions also permit employers to implement “compressed” four-day work weeks or “continental shifts” with 12-hour work-days. The requirement for such must be justified. Additionally, some professions (e.g. doctors) and certain roles (e.g. managers and supervisors) may be exempt from such minimum standards and overtime rules.

Overtime

Overtime rules vary by province with some jurisdictions maintaining daily overtime thresholds (often eight hours) and others having weekly overtime thresholds (often 40 to 44 hours per week). 

Overtime is generally payable at 1.5 times the regular rate. In some jurisdictions, the rate is two times the regular rate once a particular threshold is passed. 

Both salaried and hourly employees enjoy overtime entitlements in Canada. However, most jurisdictions specifically exclude certain employees from this entitlement. Exemptions include managers, supervisors and certain categories of professionals.

Timesheets

Records are required and must show the daily hours worked, unless the employee is excluded as a manager as prescribed under Section 24 of the Canada Labor Code. If hours of work are averaged, records must include the posting of the 30-day notice. Records must also identify the periods being averaged, the start date of the averaged period, details of the reductions in hours and the number of overtime hours paid.

Health and Safety in the Workplace

Most provinces require a written health and safety policy with certain details. This requirement is based on the number of employees or the scope of the employer’s operations. Specific training for employees on health and safety standards may also be a requirement.

Each jurisdiction has implemented its own health and safety legislation. Generally, they all have broad and sweeping powers to investigate and ensure safe workplaces.

Bonus

Bonuses are not required in Canada. However, many employers will choose to offer bonuses as an incentive both to attract and retain employees.

For the employer, it is critical that the wording of any bonus policy is very clear. Clarity is key in limiting liability for the compulsory payment of bonus, particularly upon termination. Employers should focus on employing explicit language and clear examples in defining the bonus criteria, the payment dates and the entitlement. The policy should also clearly account for what happens in the event of resignation, retirement or termination of any kind. Simply calling a bonus “discretionary” in the employment contract will not necessarily protect an employer from claims by terminated employees seeking bonus amounts.

Termination

Grounds

Termination for cause without notice or pay in lieu is permissible in Canada. It is very difficult to establish just cause for dismissal, with the standard being very high. However, in general, an employee can be dismissed without notice if he or she engages in conduct incompatible with the fundamental terms of the employment contract. This includes gross and willful misconduct, willful neglect of duty, fraud, theft, or repeated insubordination. 

Termination without cause is permissible in most jurisdictions. However, the proper notice of termination or payment in lieu must be provided. 

Employees entitled to termination protection

Generally, employees in Canada cannot be terminated by employers without just cause, without proper notice or without payment in lieu and severance pay (if applicable). This is established under statute and at common and civil law. The right to reinstatement, however, is generally limited to unionized employees, employees terminated contrary to human rights legislation, employees terminated for exercising a statutory right with respect to working conditions or legislated employment standards. The latter includes the right to a pregnancy leave. 

Federally regulated employers may not terminate a non-managerial employee with at least one year of service without sufficient reason. Generally, this includes just cause or a discontinuance of the job function. Employers are federally regulated if they operate within industries that fall under the federal government’s constitutional jurisdiction and concern matters of national interest.

Additional protections exist in Quebec and Nova Scotia for certain employees who have acquired tenure by achieving a certain length of service. In those circumstances, termination may not be possible except for bonafide reasons such as position elimination or lack of work.

Notice tendered by Employer

The statutorily required minimum length of notice of termination varies by province. For individual terminations, this requirement is typically based on an employee’s length of service. For individual terminations, most jurisdictions limit the notice of termination to eight weeks. Sometimes a written employment contract that is otherwise enforceable will maintain the employee will receive only the minimum entitlements under the applicable statute. This may be sufficient to rebut the legal principle that the employee is entitled to reasonable notice by common law.

However, the statutory entitlement only sets out an employee’s minimum entitlements upon dismissal. Unless the parties have expressly agreed otherwise, there is a legal presumption that an employee will also be entitled to a reasonable notice period under common law. Such a period may be significantly longer depending on circumstances. Factors considered by an adjudicator in determining the appropriate notice period include the character of employment, the employee’s length of service, the age of the employee and the availability of other employment. The length of the notice period that may be awarded by a court generally ranges from two or three months up to 24 months.

In Quebec, similar entitlements exist. These generally cannot be limited by contract at the commencement of the employment relationship.

Notice tendered by Employee

Employees are obliged, under common law, to provide a “reasonable amount” of notice. Again, the calculation of this reasonable amount will depend on specific circumstances. Alternatively, parties can displace the common law requirement by including in the employment contract, at the time of hire, a specific amount of notice an employee must offer when he or she resigns.

Payment in Lieu

Pay in lieu of notice is permitted. “Garden leave” is becoming more common. With appropriate care and planning, an employer can often achieve this objective for a reasonable period.

Redundancy / Severance Pay

Ontario is the only Canadian jurisdiction that provides employees with severance pay. This is distinct from payment for notice of termination. Eligible employees in Ontario and employees under the federal jurisdiction are eligible for severance pay. In Ontario, eligible employees are those with five or more years of service. They will receive one week for each year of service. Partial years are pro-rated to a maximum of 26 weeks. In the federal jurisdiction, eligible employees receive the greater of two days’ wages per year of service or five days’ wages.

Post-Termination Restraints / Restrictive Covenants

Non-compete clause

Non-compete clauses will typically not be enforceable for regular employees, especially in cases where a non-solicitation provision is sufficient to protect the employer. Such clauses must be reasonable in scope, both geographically and temporally. In some jurisdictions, the clause must also specify the type of restricted employment and the restricted job functions. The language should be clear and unambiguous. A requirement for an employee to not interfere with business relationships might also be more enforceable if it is reasonable, clear and unambiguous.

Customer non-solicit clause

A customer non-solicit clause is more likely to be enforced than most non-competition agreements. Non-solicitation agreements must still be reasonable in scope, both geographically and temporally. The language must be clear and unambiguous.

Employee non-solicits

Again, these are likely to be enforced if reasonable, clear and unambiguous.

Trade Unions / Collective Agreements

In Canada, the level of union participation is low and declining in the private sector. Unions continue to have high levels of representation in the public sector, especially in certain traditionally unionized industries such as automotive, construction and transportation. There are no unions or other worker representation for many businesses. There are also no works councils. Industry-level collective bargaining agreements (CBAs) are rare, with certain industries in Quebec being a notable exception.

Tax and Social Security

Personal Income Tax

Income tax is levied at two different levels: federal and provincial. Provincial tax is computed in much the same way as federal tax, applying the applicable province’s tax brackets, rates, and credits to taxable income. 

The Canada Revenue Agency (CRA) administers both federal and provincial taxes, except in Quebec. Taxpayers calculate their federal and provincial taxes on one return. In Quebec, taxpayers are required to file a federal return as well as a separate Quebec tax return. 

Residents

All individual residents in Canada are subject to Canadian income tax on their worldwide income, regardless of where it is earned or where it is received. However, they may be eligible for a credit or deduction for foreign taxes paid on income derived from foreign sources.

Non-residents

Non-resident individuals are subject to Canadian income taxes at the same rates applicable to residents on the following types Canadian-earned income:

  • Employment income
  • Business income
  • Gains from the disposition of taxable Canadian property
From CAD To CAD Tax Rate %
0 48,535 15.0
48,535 97,069 20.5
97,069 150,473 26.0
150,473 214,368 29.0
241,368 and over 33.0

Newfoundland and Labrador

  • 8.7% on the first $37,929 of taxable income, +
  • 14.5% on the next $37,929, +
  • 15.8% on the next $59,574, +
  • 17.3% on the next $54,172, +
  • 18.3% on the amount over $189,604

Prince Edward Island

  • 9.8% on the first $31,984 of taxable income, +
  • 13.8% on the next $31,985, +
  • 16.7% on the amount over $63,969

Nova Scotia

  • 8.79% on the first $29,590 of taxable income, +
  • 14.95% on the next $29,590, +
  • 16.67% on the next $33,820, +
  • 17.5% on the next $57,000, +
  • 21% on the amount over $150,000

New Brunswick

  • 9.68% on the first $43,401 of taxable income, +
  • 14.82% on the next $43,402, +
  • 16.52% on the next $54,319, +
  • 17.84% on the next $19,654, +
  • 20.3% on the amount over $160,776

Quebec

  • 15% $44,545 or less
  • 20% More than $44,545 but not more than $89,080
  • 24% More than $89,080 but not more than $108,390
  • 25.75% More than $108,390

Ontario

  • 5.05% on the first $44,740 of taxable income, +
  • 9.15% on the next $44,742, +
  • 11.16% on the next $60,518, +
  • 12.16% on the next $70,000, +
  • 13.16 % on the amount over $220,000

Manitoba

  • 10.8% on the first $33,389 of taxable income, +
  • 12.75% on the next $38,775, +
  • 17.4% on the amount over $72,164

Saskatchewan

  • 10.5% on the first $45,225 of taxable income, +
  • 12.5% on the next $83,989, +
  • 14.5% on the amount over $129,214

Alberta

  • 10% on the first $131,220 of taxable income, +
  • 12% on the next $26,244, +
  • 13% on the next $52,488, +
  • 14% on the next $104,976, +
  • 15% on the amount over $314,928

British Columbia

  • 5.06% on the first $41,725 of taxable income, +
  • 7.7% on the next $41,726, +
  • 10.5% on the next $12,361, +
  • 12.29% on the next $20,532, +
  • 14.7% on the next $41,404, +
  • 16.8% on the amount over $157,748

Yukon

  • 6.4% on the first $48,535 of taxable income, +
  • 9% on the next $48,534, +
  • 10.9% on the next $53,404, +
  • 12.8% on the next $349,527, +
  • 15% on the amount over $500,000

Northwest Territories

  • 5.9% on the first $43,957 of taxable income, +
  • 8.6% on the next $43,959, +
  • 12.2% on the next $55,016, +
  • 14.05% on the amount over $142,932

Nunavut

  • 4% on the first $46,277 of taxable income, +
  • 7% on the next $46,278, +
  • 9% on the next $57,918, +
  • 11.5% on the amount over $150,473

SOCIAL SECURITY

Canada has a highly developed and extensive social security system, providing benefits such as disability, death, family allowances, medical care, old age, sickness and unemployment. The social security system is funded by wage and salary deductions as well as employer contributions. It is the employer’s responsibility to collect both employer and employee contributions.

 

 

Type of Social insurance Paid by employer Paid by employee Total Maximum Contributions (per annum)
Canada Pension Plan 5.25% 5.25% 10.50% Employee CAD 2,898 Employer CAD 2,898
Employment Insurance 2.21% 1.58% 3.79% Employee CAD 856 Employer CAD 1,199
Total 7.46% 6.83% 14.29%  

*The above table serves as a broad guideline. Actual rates charged by GoGlobal will differ.

Employees

Salary Payment

Canadian law requires employees to be paid at regular intervals. This can occur weekly, bi-weekly or semi-monthly. Regular monthly salary payments are most common.

Payslip

A statement of wages (often known as a pay stub) must be issued on or before the day of the related salary payment. The pay stub must include:

  • the employees’ rate of pay
  • the pay period
  • wages for that period before and after any deductions (must detail how that was calculated)
  • the amount and reason for any deductions

Annual Leave

  • Employment standards legislation provides employees with a statutory entitlement to vacation and vacation pay. Amounts and related requirements vary by jurisdiction. In all provinces, employees are entitled to at least two weeks of vacation per year and vacation pay of 4%, which begins to accrue immediately upon the commencement of employment. This entitlement will be enhanced with an employee’s length of service in many provinces. For example, the entitlement is typically enhanced to three weeks and 6% vacation pay after five years of service.
  • Many employers provide a greater vacation entitlement than is required and allow vacation to be taken in the first year of employment as the vacation time accrues.

Carry over rules

In most jurisdictions, the carry over of annual leave is allowed. Effectively, a “use or lose” policy is not permitted in Canada.

Sick Leave

Entitlements to sick leave vary by province. Generally, employers are not obliged to pay for these absences. In most jurisdictions, employees enjoy the statutorily protected right to a certain number of days unpaid sick leave. However, many employers do provide paid sick leave.

When it comes to caring for a family member, some provinces provide for a certain number of statutorily protected but unpaid days.

Employers also have a duty to make accommodations for an employee on the basis of any disability or family status. Therefore, an employer may be required to allow an employee to be absent, without pay, for more than the mandated statutory leave days.

Compassionate & Bereavement Leave

Under the Employment Standards Act, there is no statutory entitlement for employees to receive paid bereavement leave in Canada. Under most circumstances, employees are entitled to take at least two days of unpaid job-protected leave per calendar year for the death of immediate family members. The employee’s job is protected if they take this leave. Many employers will both pay for this leave and extend the number of days allowed, outlining this in the employment contract or as part of an emergency leave policy.

The definition of immediate family members includes siblings, spouse, parent, spouse’s parent, stepparent, foster parent, grandparent, spouse’s grandparent, child, spouse’s child, stepchild or foster child, grandchild, spouse’s grandchild, child’s spouse or a dependent relative.

Maternity & Parental Leave

Maternity and parental leave entitlements differ by province. In general, pregnant employees have the right to take maternity or pregnancy leave of up to 17, 18 or 19 weeks depending on the province. This leave is unpaid. In Quebec, birth fathers are also eligible for up to five weeks of unpaid paternity leave.

Additionally, in most jurisdictions, new parents (as well as adoptive parents) have the right to unpaid parental leave of between 59 and 63 weeks when a child is born or comes into their care for the first time. Parental leave does not have to begin immediately after the birth of the child or when an adopted child first comes into the care of the parents. Timeframes and rules for this leave vary in different jurisdictions. However, in most jurisdictions, birth mothers who have taken pregnancy leave must begin parental leave immediately following the expiration of the pregnancy leave.

An employer cannot, in any way, penalize an employee that is eligible or will be eligible to take pregnancy or parental leave. They also cannot penalize this employee for taking such leave. Generally, benefits must be maintained. In nearly all cases, employees have the right to return to their job following the leave with their seniority and length of service remaining intact.

Because the employment insurance benefit only covers a fraction of the employee’s regular income, many employers will offer a scheme to “top up” benefits.

Public Holidays

Public holidays in Canada are often called statutory holidays. They are legislated at federal, provincial and territorial levels. There are five nationwide (federal) statutory holidays and six additional holidays for federal employees. Each of the provinces and territories observes a number of holidays in addition to the nationwide days.

Most workers in Canada are entitled to take the day of a public holiday off with regular pay. Some employers may require employees to work. However, the employee must either receive a day off in lieu of the holiday or get paid at a premium rate. This premium is usually 1.5 times or twice the regular pay for their time worked that day, in addition to the holiday pay.

Benefits to the Employee in Canada

Statutory Benefits

The Canadian social security system is broad and encompassing, incorporating federal law on welfare issues like unemployment insurance and old age security. The system includes provincial policies and programs on welfare issues, such as education, social services and social assistance.

The benefits system also provides benefits for residents of Canada including retirement, unemployment, disability and healthcare benefits.

Additionally, the federal Employment Insurance (EI) system provides benefits in the event of a loss or the interruption of employment. Canada’s public healthcare system also greatly decreases the cost to employers in providing private medical insurance to employees when compared to countries without such systems. Participation in a government-run workers compensation program is either mandatory or optional, depending on the province and the type of work the employer is engaged in..

Other Benefits

Typically, employees in senior roles are offered supplementary benefit packages, which may include:

  • Private pension programs
  • Supplementary healthcare or dental plans (these typically cover costs of items or care not covered by Canada’s universal healthcare system, such as prescription drugs or vision ware)
  • Additional paid annual leave or emergency leave
  • Corporate bonus program
  • Vehicle allowance

Visas and Foreign Workers

General Information

Work Permits

Most people will be required to obtain a work permit in order to work in Canada. There are very few exceptions for particular work types such as academic experts evaluating or supervising academic projects, proposals or university theses.

There are two types of work permits: open work permit and employer-specific work permit. Most permits will be employer-specific.

To commence an application there will be various requirements. Typically, and most importantly, the applicant will be required to provide proof of an offer of employment and a Labor Market Impact Assessment (LMIA) confirmation letter. A LMIA is a document that an employer in Canada may need to obtain prior to hiring a foreign worker. A positive LMIA will confirm that there is a need for a foreign worker to fill the job. It will also demonstrate that no Canadian worker or permanent resident is available to fill the job.

Getting a Tax Number

The Canadian Social Insurance Number (SIN) is a nine-digit number required to work in Canada or to access government programs and benefits. A SIN is issued to one person only and it must not be used by anyone else. Applications to the Social Insurance Registration Office can be made online or by post. There is no fee.

For individual residents in Canada, their authorized tax identification number is their nine-digit Canadian Social Insurance Number (SIN). Every individual resident in Canada with income tax filing obligations is required to have a SIN.

Public Holidays in 2022

S.No Occasion Date Observance
1 New Year’s Day January 1st National (Observed on January 3rd)
2 Louis Riel Day February 21st MB
3 Islander Day February 21st PEI
4 Family Day February 21st AB, BC, NB, ON, SK
5 Heritage Day February 21st NS
6 Good Friday April 15th National
7 Easter Monday April 18th National
8 National Patriot’s Day May 23rd QC
9 Victoria Day May 23rd National
10 National Indigenous Peoples Day June 21st NT , YT
11 Saint-Jean-Baptiste Day June 24th QC
12 Canada Day July 1st National
13 Civic Holiday August 1st National, NT, NU, BC, NB, SK
14 Labour Day September 5th National
15 National Day for Truth and Reconciliation September 30th National
16 Thanksgiving October 10th National, AB, BC, MB, NT, NU, ON, QC, SK, YT
17 Remembrance Day November 11th National, AB, BC, NB, NL, NT, NU, PEI, SK, YT
18 Christmas Day December 25th National (Observed on December 26th )
19 Boxing Day December 26th National (Observed on December 27th )

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