Canada Market Entry

Canada Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Distribution and sales

Distribution channels must take into account the demanding geographical and logistical conditions of the country and the concentration of customers in large urban agglomerations. Most products pass through the chain on their way to the end customer: Canadian importer/distributor (wholesale) – retailer, where the importer and distributor may be the same entity.

Customs system and license

According to cheeroutdoor.com, the customs tariff is compiled on the basis of a harmonized system of classification with the division of items into ten-digit codes (HS codes). Duty and taxes (equivalent to VAT at the federal level) are paid on the price of the goods, not on insurance and shipping. CETA conditions apply to exports from the European Union, i.e. the Czech Republic. CanadaTariff Finder is practically very useful for search purposes, as well as the European Access2Markets database.

Anti-dumping and countervailing measures are based on WTO regulation, but in practice they are relatively rare. Canada has a liberal trade policy, although the import of some goods is restricted and some products may not be imported. In selected sectors, imports are limited by stricter conditions or licensed, such as food of animal and vegetable origin, weapons, ammunition and military equipment, medical products, and many others.

As for goods that have special export or import regimes, they are regulated by a special law and the so-called Import Control List. Import licenses under the “Export and Import Permits Act” are issued by Global Affairs Canada (Ministry of Foreign Affairs), e.g. explosives import licenses are issued by Natural Resources Canada (Ministry of Natural Resources). It is always possible to contact the Czech authorities in the territory or the PaulTrade agency with a request to verify the conditions of export to Canada.

Standards

Standards and other technical requirements regulate requirements for products to be sold on the Canadian market, labeling and packaging of goods, etc. In some sectors, standards can represent a significant and expensive barrier to market entry, and it is very important to inform yourself about the conditions in advance. In Canada, standards are essentially quasi-private – the Canadian government organization StandardsCouncil of Canada is the main body for the promotion of standardization, while standards are then developed by the so-called Standards Development Organizations, of which the most widely used are the Canadian Standards Association (CSA) and UnderwritersLaboratories of Canada(ULC). In addition, there may be different provincial standards (for example, in the construction industry) to the federal standards. Some standards are recognized cross-border, especially with the United States, in the case of the European Union there are still relatively few of them, although thanks to CETA they should gradually increase, or in particular, mutual recognition of conformity assessment should be expanded. The standards apply to machinery and equipment, means of transport, medicines, foodstuffs, medical products, electrical equipment, engines and other goods.

In practice, it is often possible to encounter restrictions on food and agricultural products, regulated by the Canada Food Inspection Agency, which offers the possibility of automatic search for rules (the so-called AIRS ). However, there is no central system for restrictions across sectors.

The standards are also linked to the rules on consumer packaging and labeling of goods, which in Canada, as a bilingual country, are also linked to language rules. All information that is mandatory on packaged products, must be in English and French except for the manufacturer’s names and their address. However, in the interest of the exporter, it is recommended to provide additional information in two languages. In the province of Québec, goods and accompanying documents must be marked in French. Regarding import documents, the European exporter should be registered in the REX system. Canadian authorities will then require standard documents. Settlement through a Canadian broker is standard. It is recommended to split the price of goods and shipping/insurance on the invoice. As for other important legal standards (in the field of IPR, labeling of goods, phytosanitary treatment, economic competition, etc.), they do not differ fundamentally from European standards. In addition to the already mentioned, there are two other specific sector restrictions, the state monopoly on the import of alcohol, which is ensured by provincially owned companies, and the so-called supply-management system,

Forms and conditions of operation on the market

Direct export

Direct service to the Canadian market is more feasible for one-off or occasional orders or turnkey projects, or some specific products, however, considering the distance from Canada, its size and the time difference, this method entails some logistical obstacles.

Representative or importer

A sales representative/importer is essentially the simplest form of local representation. The representative can prove himself especially in the case of the import of goods requiring service and distribution. For products requiring sales and service (e.g. engineering goods), it is necessary to have a qualified importer with a good background (logistics, warehouses). Canadians expect local service and contact by default. The importer is responsible for correct product design and delivery or installation in accordance with Canadian standards. For most end-users, the price plays a big role in choosing a product, which affects sales in Canada and the USA more than in Europe. Canadian specifics, significantly different from the European, but also the American market, is the standard of paying representatives not only by commission, but also by a lump sum. For some commodities, the form of import through a representative is directly prescribed (e.g. alcohol).Canadian Association of Importers and Exporters. Assistance in finding a business partner can normally be provided by the foreign office of PaulTrade Calgary, as well as, depending on the specifics of the goods, by embassies (Ottawa, Toronto). It is also possible to find suitable partners at international fairs, not only in Canada, but also in Europe or the USA.

Company Formation

Establishing a company in Canada entails higher costs (establishment, possibly costs of relocating an employee or a local employee), on the other hand, it allows better and more direct control of functioning on the market than a representative. Setting up a company (the most common equivalent of an s.r.o.) is a relatively simple and quick process, however, it offers a number of different options, which is why local law offices are often used. Before registering a company in Canada, it is necessary to decide whether the company will operate in the entire territory of Canada from the beginning (so-called federal registration) or only within one province (Ontario, Quebec company – even here it is possible to expand). What is specific is that some provinces, including Ontario, require that one of the company’s statutory directors be a resident of the province.

Marketing and communication

The Canadian market has many features in common with the markets of other developed countries, however, marketing and communication are given more emphasis than in the Czech Republic, and it is necessary to pay adequate attention to this.

How to choose marketing

When preparing to enter the market, there are three fairly standard topics to focus on from a marketing point of view – consumer research, proper branding and resource allocation. Consumer research is necessary, taking into account the different behavior of consumers, and it is better to prepare a new strategy than to simply copy the procedures operating in the Czech Republic. When it comes to branding, similar to the US, brand image and story are key to long-term success. Last but not least, there are additional costs associated with creating a modified marketing strategy (and costs such as translations) to be considered.

Factors affecting marketing strategy

Canadian consumer behavior is undergoing a transformation, the role of emotions and product faces is increasing, loyalty to traditional brands is decreasing, brands are often beginning to identify with some set of values ​​(ethical, environmental, etc.). Personal recommendations, for example, have a significantly greater role than in Europe. The multicultural nature of society represents a range of consumer preferences (e.g. in fashion), in addition to which approximately 8 million Canadians speak and communicate in French, which is related to different language materials and often a different approach to marketing. When creating a marketing strategy, it is necessary to consider how much of the Canadian market (given the geography of the country) the exporter wants to reach, what sales volumes to achieve and how the business should grow. As a result of technological progress and social changes, the market for new products and services is constantly changing.

Advertisement

Although this trend is slowly changing, Canadians used to be heavily influenced by advertising and purchase history, including brand loyalty. Classic advertising channels (TV, print) are relatively expensive and are mainly replaced by social media. Compared to the Czech Republic, they play a much larger role (this applies cross-sectionally to Facebook and Instagram, as well as LinkedIn and Twitter), while mobile phones are the key channel.

What to avoid

Mistakes made by companies coming to North America include overestimating the uniqueness of their own product and underestimating the competition, not using available marketing channels or perceiving the entire region as one single market. The product must also have a perfect language localization. Canadians are very sensitive about their society, tolerance and political correctness. Humor has its place in communication and marketing, but certain jokes that can be perceived tolerantly in the Czech environment (black and sarcastic humor, jokes about religion, gender or race) must be avoided.

PR agencies

There are a number of PR agencies operating in the country, from smaller agencies specialized in online marketing to large, often multinational players, which are brought together by the Canadian Council of Public Relations Firms. Their presentations, including portfolio, references and specialization are easily accessible online.

Issues of intellectual property protection

Canada is a member of virtually every international organization, agreement or convention protecting intellectual property:

  • World Intellectual Property Organization (WIPO)
  • Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
  • Paris Convention for the Protection of Industrial Property
  • Bern Convention for the Protection of Literary and Artistic Works
  • The Patent Cooperation Treaty (PCT)

Domestic protection of intellectual property is primarily ensured by the Patent Act, Trade-Marks Act, Copyright Act and Industrial Design Act. The main organization responsible for the protection of intellectual property rights in Canada is the government agency Canadian Intellectual Property Office, which also maintains databases of protected intellectual property rights in Canada. Through it, it is also possible to apply for a trademark, patent or industrial design. Due to Canada’s membership in the aforementioned organizations, it is also possible to use them as tools to ensure the protection of intellectual property rights in Canada.

Nevertheless, Canada has long been on the so-called Watch List, which is created by the United States as a list of countries that most violate intellectual property rights (although Canada is no longer on the so-called Priority Watch List, it still remains in the second category of the Watch List). The United States sees patent protection (especially pharmaceuticals) and various exemptions for educational purposes as problematic, as well as mild penalties against those who violate intellectual property rights. Similarly, the EU has a negative view of some shortcomings regarding the misuse of food and alcoholic beverage names from Europe.

Common alternative dispute resolution methods are offered to resolve potential disputes in the event of infringement of intellectual property rights, primarily mediation and arbitration, or standard court proceedings. The Canadian Intellectual Property Office suggests seeking sector experts through the private association Intellectual Property Institute of Canada. The vast majority of large Canadian law firms also have their own specialists in intellectual property law.

Public procurement market

Public procurement in Canada offers a very interesting opportunity for European companies. At the federal level (the government and agencies with federal jurisdiction), they represent approximately 20-25 billion CAD per year and approximately 350-400 thousand various transactions. At the provincial, territorial and municipal levels, government procurement is estimated to be upwards of an additional CAD 120-130 billion per year. Government contracts include, for example, the purchase of goods, services and construction. Tenders are considered transparent, information is available to all potential participants (in some cases for a small fee), mostly online.

Access by foreign companies

Public procurement in Canada is relatively open, thanks to the number of international trade agreements, including agreements in the WTO system, bilateral agreements or the agreement with the US and Mexico on free trade and, for European companies, the key CETA. Thanks to the free trade agreement within Canada, Canadian companies are favored to a certain extent, especially for public contracts at the provincial and municipal level, the practice is to favor domestic suppliers at the expense of foreign companies. This is, for example, a lower threshold for public procurement for Canadian and foreign firms. These rules also apply to municipalities, academic institutions, schools and health service providers, which must issue a public order for Canadian companies if their value in the case of the purchase of goods and services is higher than 100,000. CAD and in the case of construction contracts higher than 250 thousand. CAD.

PLATOON

Companies from European Union countries, including the Czech Republic, have very favorable conditions and the market is extremely open to them compared to other countries. After CETA began to be implemented, companies from the EU can participate in contracts not only at the federal level, but also in the case of provincial governments and municipalities in Canada. Contracts are available from funding limits that are partially changed every two years and vary for federal contracts and for provinces and municipalities, as well as for industry. Detailed information can be found hereon the Canadian government website. Indicative of federal government orders, the purchase of goods exceeds 238,000. CAD and construction contracts in excess of CAD 9.1 million. Contracts of provincial governments and municipalities have higher limits (approx. CAD 360,000 for the purchase of goods, the threshold is equally high for construction contracts). Since the entry into force of CETA, however, there have been restrictions on EU companies for some public procurement at the provincial level (e.g. the requirement for “local content”). Examples include the procurement of public transport vehicles (Ontario), where at least 25% of the contract value must come from provincial firms, or the procurement of public transport vehicles (Québec), where at least 25% of the contract value is required to come from provincial firms and the final vehicle assembly must take place in the province.

Sources of information on public contracts

CETA assumes that a single portal will be created for access to all data on tendered public contracts. The Canadian government has committed to launching the portal by September 2022, a portal called CanadaBuys is currently under development. Until it is fully launched, you need to search individual Canadian resources, a basic overview of which is provided below.

Federal level: The federal government publishes all contracts on the Buyandsell government website. This site allows you to search in several categories, such as services, goods, construction work. It also allows you to set the search according to a specific industry, as well as according to the provinces in which the job is to be carried out.

Provincial level: At the provincial level, information is often put on provincial websites. In addition, most provinces publish information on other well-known sites such as MERX (details below). In some cases, parts of the portal may be subject to a fee, or the electronic submission of the offer itself may be subject to a fee. Municipality – the already mentioned MERX system is the best for information about public contracts.

Additional sources of information and instructions

The vast majority of public contracts are available in the private system of MERX. Some companies (such as the Toronto Transit Commission) put everything exclusively on select websites, such as MERX, and publish only basic information on their site. It is worth noting that private entities, such as the Bank of Montreal, also enter their public contracts into the system. Further information on government contracts can be found on the website of Canadian Commercial Procurement (www.ccc.ca), the guide of the European Union Chamber of Commerce in Canada and the website of the Consulate General in Toronto, to verify the conditions for specific parameters of the tender, the European Commission ‘s Access2Procurement database can be used. More information, including public procurement information, on the Canada-EU Comprehensive Economic and Trade Agreement (CETA) can be found on the website.

Payment terms, payment ethics and resolution of commercial disputes

Usual payment terms and morals

Czech companies should standardly insure themselves against the insolvency of Canadian customers. Their credibility can be checked by credit agencies (e.g. Equifax Canada ) or by checking the paid insolvency register. It is also possible to request bank references.

A practical tool for paying a larger amount is a confirmed letter of credit, which is a commonly known banking instrument in Canada and all major Canadian banks should be able to issue it without difficulty for an appropriate fee. When it comes to invoice due dates, the standard in Canada is 30 days, however shorter or longer due dates are not the exception. Payment morale is usually good and local authorities act impartially when resolving disputes. In the case of smaller disputes, it is possible to go to the so-called small claims courts.

Business contracts and disputes

When negotiating a contract (purchase or other), it is recommended to pay attention to all the necessary details (delivery and payment terms, liability, guarantees, dispute resolution) and to use either the services of a local lawyer, or to modify the contract so that it is governed by Czech or international, but in any case known legal order. In the event of a dispute, the most common place for resolution is the court, however, court proceedings are expensive and therefore it is necessary to consider contacting an experienced local commercial lawyer (e.g. using the services of specialized agencies, as an example Lawyerlocate ) and try to resolve the problems by agreement, except nor is it commercial arbitration or mediation.

Visas, fees, specific conditions for traveling to the territory

For Czech citizens, traveling to Canada is relatively simple by default, we recommend checking the current anti-pandemic restrictions on the Canadian government website before traveling (in spring 2022, the main restriction is the requirement for completed vaccinations).

Citizens of the Czech Republic do not need a visa for a short-term stay in Canada (up to 6 months) and transit through Canadian territory. The visa-free regime applies to short-term stays for the purpose of tourism, visiting family/friends, and business and study purposes (one-semester study, language courses). During this stay, it is not possible to work in Canada (for this possibility, it is necessary to obtain a “work permit” from the Canadian embassy, ​​possibly to apply for a “temporary residence of youth”). Since 2015, it has introduced an “electronic travel authorization – eTA” for visa-free travelers, similar to the ESTA system used in the USA. An application for travel authorization is made through the Citizen and ImmigrationCanada website(avoid middlemen). An eTA permit is mandatory for visa-free air travelers, it is not required when crossing the land border, nor for travelers who have a Canadian visa or Canadian permanent resident status.

Canada is a relatively safe country, standard caution is still appropriate in larger cities. There is relatively high-quality public transport available in the cities, it is usually easy to get around on foot, by bike, or use car sharing. Car transport outside the city is usually required, rental is only possible with compulsory insurance or you can pay extra for accident insurance. A credit card is often required to rent a car, similarly it may be required as a deposit when staying in a hotel.

Especially when traveling to remote parts of Canada, we recommend contacting the local Czech embassy and reporting the details of the trip, we also recommend registering on the website of the Ministry of Foreign Affairs – DROZD.

Full details on Standard Entry to Canada can be found here.

Useful contacts:

  • Embassy of Canada in Prague, Ve Struhách 95/2, 160 00 Prague 6, Tel: 272 101 800, Fax: 272 101 890, E-mail: [email protected]
  • Embassy of Canada in Vienna, Laurenzerberg 2, A-1010 Vienna, Austria, Tel: +43 (1) 531-38-3000, Fax: +43 (1) 531-38-3321, Email: [email protected]
  • Citizenship and Immigration Canada (Department of Citizenship and Immigration Canada)
  • Canada Border Services Agency

Employment of citizens from the Czech Republic

Canada has a transparent immigration policy, with the vast majority of applications and permits being processed online. Both entry to Canada and employment in the country were significantly restricted during the pandemic, however, it can be assumed that once the pandemic ends, the regulation of entry and work in Canada will also return to normal conditions.

CETA offers several mechanisms to simplify entry into Canada for selected groups of workers. The first category is short-term working stays within the framework of cross-border service provision (business visitors, after-sales services, etc.). The second category includes the mechanism of temporary entry or relocation for selected categories of employees – these are primarily managers and technical specialists, or investors. One of the main advantages, when providing all the necessary documents, is the abolition of the obligation to provide evidence of the so-called Labor Market Impact Assessment (LMIA). For these cases, we recommend that you consult with the Embassy of the Czech Republic in Ottawa or the Consulate General of the Czech Republic in Toronto before submitting the application, which will recommend the appropriate procedure.

Additional entry options

Citizens of the Czech Republic can work temporarily in Canada on the basis of the Temporary Foreign Worker Program(TFWP). A condition is to obtain a work permit. The application for a work permit takes place in two distinct stages. First, the Canadian employer must list the relevant position or submit an application for a temporary work permit for a foreign worker to the government office of Employment and Social Development Canada (ESDC), which processes and assesses the applications. In this case, the ESDC performs the mentioned labor market test. The Canadian employer must pay an application fee and provide detailed information, such as the number of Canadians who applied for the job opening, the number of Canadians who interviewed with the applicant and an explanation as to why those Canadians were not hired. In principle, it is thus necessary to demonstrate that it was not possible to hire a Canadian employee for the relevant position for objective reasons. ESDC refuses to process applications where there are concerns, that temporary foreign workers may or will have a negative impact on the Canadian labor market. The working and wage conditions of foreign workers must be the same as domestic workers. In the second round, the future employee himself submits an application for a work permit, typically online, already with a link to the job created for him. A temporary work permit lasts a maximum of 4 years (however, the possibility of switching to another residence or work permit is not excluded).

Since 2015, the Canadian government has implemented a system of express entry (so-called “Express Entry”), which ensures a faster selection of economic immigrants based on the demand of the labor market. Applicants are evaluated and selected according to a points system. Decisive criteria include age, education and work ability. Applicants with a Canadian job offer or applicants nominated by the provincial government (the so-called provincial nominees program, when the provinces themselves identify insufficient job positions) have an advantage.

Another group that can get a job in Canada is the youth, as part of the International Experience Canada program, which is managed by the Canadian government. There are two variants, either the Working Holiday program or the Young Professional program.

Other terms of employment

There is no minimum wage at the federal level in Canada, and its regulation is the responsibility of the provinces. For example, in Ontario, Canada’s most populous province, the minimum wage is CAD 14.25. Social and health insurance is at a relatively high level. The system is based on the principle of solidarity, while contributions are financed by deductions from the salary (social insurance and health insurance). Health care is provided by a network of so-called family doctors, in smaller private clinics and hospitals, mostly financed from public budgets. A significant number of employers offer various health benefits (e.g. dental care) or supplementary pension insurance.

Fairs and events

Trade shows in Canada As the COVID-19 pandemic recedes, trade shows in Canada have already begun to return to physical form in 2021, a trend that continues in 2022. Some trade shows and conferences continue to be held in a hybrid format. Below is an overview of selected trade fairs. For more detailed information, it is always possible to contact the embassies according to the venue (Ottawa, Toronto) or PaulTrade Calgary.

Mining and quarrying industry

  • PDAC Convention, June 2022, Toronto – the largest mining trade show in the world
  • Global Energy Show, June 2022, Calgary – Mining and Energy

Aviation industry

  • Canadian Aerospace Summit, November 2022, Ottawa – Aviation and Space
  • AeroMontreal/International Aerospace Innovation Forum (various thematic focus), September 2022, Montreal

Agriculture and food industry

  • SIAL Canada, May 2023, Toronto, (rotating between Toronto and Montreal) – North America’s largest food trade fair
  • Ontario Craft Brewers Conference and Marketplace, October 2022, Niagara Falls – Brewing
  • Canada’s Farm Show, June 2022, Regina – the largest agricultural trade show

Transport industry

  • National Railway Day Conference and Exhibition, November 2022, Calgary(Rotating) – Rail Transport
  • Canadian Urban Transit Association Conference and Show, October 2022, Montreal – urban transport

Technology, startups, ICT & AI

  • Megamigs, October 2022, Montréal – Game Fair
  • Big Data & AI, October 2022, Toronto
  • Collision Conference, June 2022, Toronto – Technology and startup conference

Tourism

  • Salon Internationale Tourisme Voyages, October 2022, Montréal – tourism
  • Canadian Meetings + Events Expo, August 2022, Toronto – Incentive Tourism (Note formerly IncentiveWorks)

Next

  • Canadian Manufacturing Technology Show, Fall 2023, Toronto – Engineering Fair (alternating with IMTS in Chicago)
  • Canada’s Global Defense and Security Trade Show, June 2022, Ottawa – defense fair
  • The Building Show, December 2022, Toronto – construction trade show
  • Waste & Recycling Expo Canada, September 2022, Toronto – waste management and recycling
  • Canadian Pool and Spa Show, February 2022, Niagara Falls – Pool Technology and Pools

Note Some fairs are held every two years (CMTS), as well as some fairs (eg SIAL), rotate between cities. Trade fairs in Canada can also be found via the search engine: https://10times.com/

Canada Market Entry