Canada Market

Canadian Legal & Political Frameworks

Legal Framework
Almost all Canadian jurisdictions use the British common law system. The exception is Québec, which follows a French-style civil code.

Tax System
Canada has the lowest effective corporate income tax rates for research and development (R&D) operations in the G7 and one of the lowest corporate income tax rates for manufacturing operations. The low rate is a result of Canada's five-year tax reduction plan, introduced in 2000, which created parity between the manufacturing and service sectors, and reduced the average corporate tax rate to 4.5% below the average US rate. Fiscal measures introduced in the 2006 federal budget will raise this rate advantage for manufacturing to 5.1% by 2010. Aside from income and capital taxes, the federal government and nine of 10 provinces collect a consumption tax on goods and services (GST). The federal GST of 6% is a type of value-added tax.

Standardization and Certification of Products
Canada has no significant restrictions on transfers of technology. Regulatory agencies become involved if an industry or product is subject to broad regulation, such as food, drugs and textiles, in order to ensure they comply with national standards of quality and safety. Some goods are restricted or prohibited such as firearms and other weapons.

Protection of Patents and Trademarks
Patents, trademarks, copyrights, industrial designs (including integrated-circuit topographies) and plant breeders' rights are recognized in Canada. Trade secrets are also protected through provincial law. Licensing of proven technology specifies whether patent rights are exclusive or non-exclusive, regional or national in scope, and whether there are restrictions on what can be produced with the technology. They also specify the types of defaults on payments that will result in cancellation of a licence.

Intellectual Property
Canada's level of protection for patents and trademarks conforms to general standards in Europe and the US. Canada is a signatory to the Paris Convention on Intellectual Property, the International Patent Co-operation Treaty and the World Intellectual Property Organisation's treaties on copyright. The Canadian Intellectual Property Office (CIPO) is the main agency responsible for processing and registering intellectual property claims, however it is not an enforcement agency. As of July 2004, CIPO has operated as an International Searching Authority and International Preliminary Examining Authority under the Patent Co-operation Treaty.

Political Framework
National Government
Canada is a constitutional monarchy. The prime minister is the head of government. The legislative branch comprises an elected House of Commons and an appointed Senate. For the fifth time in a row, Canada was ranked #1 in the world in e-government (Accenture 2005).

Provincial and Territorial Governments
There are 10 provinces and three territories, with the provinces having wide jurisdiction in many areas, including resources, education, healthcare, direct taxation, civil law and provincially incorporated companies. The two levels of government (federal and provincial) share power in some areas, as agriculture, immigration and old-age pensions. Municipal governments operate under provincial jurisdiction.