4. Business Legislation in Canada


Business legislation and regulation in Canada serves several purposes including promoting economic development and competitive advantage while also protecting the public interest. Finding the balance between appropriate regulation to encourage business growth and over-regulation which may constrain businesses is a difficult and constantly evolving challenge.

Business legislation provides a rules-based framework within which business operate. Without rules and the predictability and consistency they provide, investors would not feel comfortable investing in new or existing businesses. Without investment, the economy would not grow to create the jobs needed to sustain a thriving society. As a result, most governments, at every level, create regulations to support businesses with the goal to encourage investment and grow the economy.

As an example, imagine you wanted to start a new restaurant. You would begin by finding a desirable location in an area with many potential customers, and few competitors. You would invest your capital into the business, maybe taking loans, in order to develop and launch the restaurant. In addition to the capital invested, a great deal of your time, energy and creativity would be committed to establishing the business.

Soon after opening, customers arrive, and you begin to realize a return on your investment. However, someone else notices your success and decides to copy everything about your restaurant: recipes, logos, design etc., and opens a restaurant on the same street to attract your customers before they reach your restaurant. All of you hard work and investment could be lost if rules and regulations were not in place to prevent others from using and appropriating your innovations, intellectual property, and related business assets.

An important factor for business success is understanding the rules and regulations governing the business context. Across Canada, in every jurisdiction, there are regulations that businesses abide by in order to operate. Depending on the type and form of business, the level and extent of regulation can vary. A sole proprietor offering job placement services in rural Ontario will have different regulations than an offshore oil drilling corporation located in Newfoundland.

As noted, there are a lot of regulations governing how business are allowed to operate in Canada; in fact, there are too many to mention here, but some fundamental Acts include:

  • The Constitution Act
  • Sale of Goods Act
  • Consumer Protection Act
  • The Federal Competition Act
  • Environmental Protection Act
  • Personal Property Securities Act (Ontario)


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Business Law and Ethics Canadian Edition Copyright © 2023 by Craig Ervine is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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