Table of Contents

Canada

Table of Contents

Currency

Canadian Dollar (CAD)

Payroll Frequency

Monthly

Employer Taxes

5.70%

About Canada

Canada is the second largest nation in the world, by land mass, and also one of the most sparsely populated. It has a multicultural society that is accommodating to immigrants and exports a great wealth of natural and intellectual resources. As a result of its colonial history, Canada has two official languages, English and French. It is also a Commonwealth state that obtained self-governance in 1931 and full legislative power in 1982. Canada has the longest shoreline in the world and only borders one country, the United States of America.

Canadian culture is different from that of the United States in that Canadians are known more for their community-oriented and peacemaking preferences in governance and society. They also show little regard for social classes while continuing to strive for personal and familial success, ideally without extracting social cost. They are also known for exhibiting optimism and a tendency to tolerate ambiguity. The country is divided into French-speaking and English-speaking sections, portraying cultures that resemble those of France and Britain respectively. First Nation cultures of native Indians, Inuit of the Eskimo, Southeast Asian and Latin American cultures are also represented in the country’s multicultural spectrum as well as those from other European countries.

Employment Relationship

• Permanent Employment

The Labour Code of Canada specifies four main categories under the permanent employment designation. Those categories are: full-time, part-time, casual, and managerial/professional. Although all of these are covered in the Labour Code, there is no statutory distinction made between them. Full-time employees are generally considered to be permanent employees who work 30 or more hours a week. **COVID-19 vaccinations are mandatory for employers in the federal air, rail, and marine transportation sectors. 

• Fixed-Term or Specific-Purpose Contracts

Apart from the fixed nature of the contract and the exemption from unfair dismissal laws, there is little difference in entitlements between a "fixed-term" employee and a "permanent" employee in Canada. Per the Labour Force Survey of Canada, "contract jobs" are jobs defined by the employer prior to hiring that are to be terminated at a specific date or upon the completion of a specific task or project. A contract employee is not considered a permanent employee and is not eligible for the benefits and accommodations available to permanent employees. There are no restrictions in the Labour Code on the type of work that can use fixed-term employment contracts.

• Temporary Employment Contratcs

Canada's Labour Code does not differentiate between permanent and temporary employees. All employees are protected under the law. A temporary job has a set termination date or ends upon the completion of a project or the attainment of a goal. Temporary employment is categorized into 3: seasonal (lasting for limited periods at the same time every year), contractual (fixed end-date) and casual (with varying work hours every week and no fixed schedules). Temporary help agencies and recruiters are prohibited from operating without a license for that purpose. A prohibition against knowingly engaging or using the services of an unlicensed temporary help agency or recruiter is included.

Probationary Period

Canada's Labour Code allows termination without notice or severance within three months of the beginning of an employee's contract. A probationary period is set at the provincial level. Statutory probationary periods are set by each province, ranging from 1 to 12 months.

Working Hours

The statutory hours for employees are eight per day or 40 per week. The maximum number of hours of work permitted per week is 48. Where the nature of work in an industrial establishment necessitates irregular distribution of employees' working hours, daily and weekly hours may be calculated as an average for a period of two or more weeks. Regulations allow for different standard working hours for certain industries and types of work. During a week when one or more holidays occur, the standard hours of work are reduced by eight for each holiday. Employers with 25 or more employees must have a written policy in place for all employees to disconnect from work. 

Holidays / PTO

• Statutory Holidays

New Year’s Day (January 1, National), Bank Holiday (January 3, Quebec only), Family Day (February 13, British Columbia only), Islander Day (February 20, Prince Edward Island only), Heritage Day (February 20, Nova Scotia only), Family Day (February 20, Alberta, Ontario and Saskatchewan), Louis Riel Day (February 20, Manitoba only), Heritage Day (February 24, Yukon only), Good Friday (April 14, National), Easter Monday (April 17, National), Victoria Day (May 22, National but excludes Quebec), National Patriots’ Day (May 22, Quebec only), National Aboriginal Day (June 21, Northwest Territories and Yukon only), Quebec’s National Day (June 24, Quebec only), Canada Day (July 1, National), Nunavut Day (July 9, Nunavut only), Civic Holiday (August 7, National but excludes Quebec and Yukon), Discovery Day (August 21, Yukon only), Labor Day (September 4, National), Thanksgiving Day (October 9, National), Remembrance Day (November 11, National), Christmas Day (December 25, National), Boxing Day (December 26, National).

• Paid Annual Leave

Duration and pay for annual leave differ provincially. In most provinces, employees are entitled to a minimum of 2 weeks of annual leave after completing 1 year of employment with the same employer. After 5 consecutive years of employment with the same employer, the entitlement increases to three weeks of annual vacation, and after 10 years – to 4 weeks. The annual leave and pay vary from province to province. Annual leave is to be taken only in one period or, if the employee makes a request in writing and the employer approves it in writing, in more than one period. Employers are required to pay employees who take vacation accumulated annual vacation pay. Any outstanding annual leave compensation must be paid to employees upon termination of employment.

• Sick Leave

Canada's national government does not mandate that all private employers provide paid sick leave to their employees. However, employers in federally regulated industries (such as the transportation, banking, port services, telecommunications, radio, and television broadcasting sectors) are required to provide their employees with paid sick leave. Effective December 1, 2022, federally-regulated employers with 100 or more employees must provide employees with at least 10 days of paid sick leave.  The range of sick leave entitlement on the provincial level is broad: from three days in Manitoba to up to 26 weeks in Quebec. Most provinces provide unpaid sick leave. *Lawmakers in British Columbia have amended the province's Employment Standards Act to grant employees up to 3 hours of paid leave to receive a vaccination against COVID-19. Canada's Labour Code also provides unpaid leave of up to 6 weeks to federally regulated industries employees for COVID-19. 

• Maternity Leave

The Labour Code of Canada provides a paid maternity leave of up to 17 weeks, which may begin no earlier than 13 weeks prior to the estimated date of delivery. The leave and benefits vary within provinces ranging from 16 to 19 weeks. An employer cannot dismiss, suspend, lay off, demote or discipline an employee because she is pregnant, or has applied for or intends to apply for maternity or parental leave, maternity-related reassignment or leave, or modification of her job functions.  Employees on maternity leave who have completed at least 600 insured hours of work in the 52 weeks before the start of their claim are eligible to receive a benefit for up to 15 weeks at the rate of 55% of their regular wages, up to a maximum of CAD 638 per week.

• Paternity Leave

There are no provisions in Canada's Labour Code for paternity leave. Employees are entitled to a parental leave that can be shared by both parents up to 35 weeks to care for a newborn child. Québec is the only province in Canada that offers paternity benefits as part of the Quebec Parental Insurance Plan (QPIP). Paternity leave may be taken by those insured by QPIP for three weeks at 75% of average weekly earnings or for five weeks at 70% up to an earnings ceiling of CAD 70,000 (Canadian dollars) per year. For uninsured employees, paternity leave is unpaid. 

Termination of Employment

• Notice Period

Federally regulated employees are not required to give their employer notice if they choose to quit. However, when employers decide to terminate a position, they must either give the employee 2 weeks’ written notice or pay 2 weeks’ regular wages in lieu of the notice. When employees resign or are dismissed for just causes, they are not entitled to a notice. In the case of collective dismissals of over 50 employees, an additional notice of 16 weeks is required. 

• Severance Benefits

Employees in Canada are entitled to severance pay if they have completed at least 12 consecutive months of continuous employment before the layoff or dismissal resulting in termination. The severance pay is calculated as two days' regular wages for each full year worked before termination of employment. The minimum benefit is five days of wages.  Severance pay eligibility and benefits may differ by province. And in Ontario, there is a distinction between severance pay and termination pay. In that province, employees are eligible for severance pay if they have at least 5 years of service and the employer has a global payroll of at least $2.5 million or severed the employment of 50 or more employees in a 6-month period because all or part of the business permanently closed.  Employees dismissed for just cause are not entitled to severance pay. Termination Pay Termination pay in Ontario is given in lieu of the required notice of termination, and it has eligibility requirements and a payment calculation that differ from severance pay.  The notice required to terminate an employee in Ontario (and therefore the amount of termination pay) depends on the duration of employment.