The canadian market is more open than ever

November 15th, 2017

As part of a European tour, our lawyers Jules Turcotte and Didier Culat gave several conferences to our partners in the Meritas network, to inform them of the historic opportunities related to this trade agreement that opens Canadian markets to companies in the member countries. the European Union.

On October 30, 2016 Canada and the European Union finalized their Comprehensive Economic Trade Agreement (“CETA”) that provisionally entered into force last september. However as some provisions relating to the jurisdictions of Member States will only apply once CETA is fully implemented after its ratification by all Member States, it is expected, on a reciprocal basis, that the implementation of those provisions will come into force at the same time as those in Europe. As with the European Union’s free trade agreement with South Korea, which entered provisionally into force in 2011, the process could take several years as the last countries to ratify that agreement did so in 2015.

An example of provisions that will apply immediately are those governing custom duties. On average European businesses paid 8.56% duties for the products they sold in Canada before CETA implementation but now it has entered provisionally into force, 98.4% of those duties have been eliminated. However, such provisions as those governing mobility rights that are under the jurisdiction of the Member States in Europe, as a consequence and on a recirocal basis, those provisions of CETA will apply in Canada after full implementation of CETA by the EU Member States. Businesses wanting to take advantage of the generational opportunities offered by CETA need to be ready to do business in Canada. In order to do so, they need to ask themselves some of the questions set out below.


Does your Member State have a tax treaty with Canada? If yes, what are the tax rules applicable to a European business operating in Canada and the province where you intend to do business? What are the tax rates in Canada and the province where you intend to do business? Are there any particular rules applicable to the free flow of capital between Canada and your Member State? Are there any strategies that can be put in place to minimize the negative impact of any particular rules? Our team can help you answer these questions.


How do you intend to do business in Canada? Will you hire a local employee to promote your business in Canada? Are you aware of the requirements of the employment laws of the province in Canada where you hire the employee? Would you prefer to enter into a distribution agreement with a business in Canada already in your line of business? What rules will govern that relationship? When and how will you be paid, and in what currency? Will you want the protection of a non-competition or non-solicitation clause? Are those type of clauses enforceable in the the province where you are entering into these commercial agreements and in what type of circumstances? What laws will govern your business relationship? Will you go before the civil courts or settle your disputes by arbitration, and in what location? Which language will be used to settle the dispute? Would you prefer to acquire a business in Canada? If yes, what are the critical questions that you need to answer in your due diligence? Are there any special rules or authorizations that will apply to your business in Canada? Would you prefer to set up your own new business in Canada? How easy is it to incorporate a subsidiary in Canada? Does a director of such a subsidiary need to be a resident of Canada? What potential liabilities does a corporate director have in Canada and can such liability be covered by director’s insurance? Would you prefer to do business in Canada from your electronic platform? Does your website comply with Canadian laws and that of the province where you have customers? Does your website comply with applicable consumer protection, confidentiality and sales tax legislation in Canada and in the province where you have customers? Your strategy will depend on your objectives. Have you defined them? Our team can assist you in that regard.


Are your trademarks and patents registered in Canada? Do the licenses that you hold on third party intellectual property grant you the rights you need to do business in Canada? Do your products violate the intellectual property rights of another party already registered in Canada? For that part of your intellectual property that is not protected by trademarks and patents, do you have confidentiality agreements in place with your Canadian business correspondent and are such agreements enforceable in Canada and in the province where you are conducting business? Our recognized intellectual property team can assist you in defining your strategy.


Rules of origin determine if your product is considered “Made-in-Europe” for purposes of CETA, and therefore eligible for duty-free access to Canada. Are your goods made in Europe? Are the components of your products made in Europe? Are the raw materials of the components incorporated in your products sourced in Europe? Do they come from Canada? Do they come from a country that has a free trade agreement with Canada?


Do you intend to send European employees to Canada to raise business? Do those employees require a visa, a work permit, or both? How do the immigration rules apply to short-term business trips versus long-term stays? Do you intend to attract skilled workers from Canada to your business in Europe? With our global employee mobility team at BCF, you can rest assured for your employee relocation needs and business immigration strategies.

These are but a few of the questions you need to address when you seek to expand your market to Canada.

At BCF we are uniquely positioned to assist you in developing your plans be they to take advantage of a new free trade agreement such as CETA or in any other part of the world where your products and services have a market that you wish to enter.