To succeed in business in Canada, it is vital for both employers and employees to have a strong understanding of the business culture. Canada offers among the highest qualities of life. It is culturally diverse with cities showing North American, French, and British influences, while the Organization for Economic and Cultural Development ranks the highly skilled workforce as the ‘best educated’ among member nations. As a global PEO (Professional Employment Organization), it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Canadian work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Canada to start your expansion well-informed.
Work Culture in Canada
Comprising the second largest land mass on the globe, Canada is a natural resources ‘superpower’ with the world’s third largest oil reserves. Its leading role as exporter of timber, iron ore, coal and precious metals is supported by booming ports on the Pacific and Atlantic coasts, while the Great Lakes/St Lawrence Seaway links Canada with the US heartland. These global connections provide smooth access to key international markets. But other considerations come into play – understanding workplace culture and the business environment are equally vital in making a successful move. Teamwork is highly valued in the Canadian business environment. Working well with others, listening to their ideas, and sharing responsibility are important skills. Co-workers are treated with respect, from those working in entry-level positions to supervisors and managers.
It is time to ‘get down to business’ so here are a few tips on taking the right steps, and avoiding the pitfalls:
- Language: Knowledge of the French language is important throughout Canada as English and French have equal standing. But fluency in written and spoken French is vital if the business is based in or serving Québec
- Punctuality: Being on time is appreciated as a sign of respect, professionalism and being ready for business
- Business Meetings: Canadians value everybody’s opinions being heard. Business communication is direct and courteous. Avoid aggressive sales pitches. Decisions tend to be based on verifiable facts. French culture in Québec may see more deference for senior figures
- Beware Comparisons: Avoid references to business in the US; culture and practices are quite different and Canadians do not appreciate comparisons
- Greetings: Initially be fairly formal, using titles and surnames but expect hosts to quickly move to first-name terms. Shake hands firmly and maintain eye contact
- Business Cards: Swapping business cards at either end of the meeting is usual – it is a good idea to print English on one side and French on the reverse
- Dress Code: Safe to dress formally for men and women, though start-ups and tech companies are often more relaxed
- Gift-giving: Be wary of offering a gift before the deal is sealed, in case it is seen as an attempt to curry favor. The public sector has a code of practice prohibiting this
- Sealing the Deal: Agreements are often sealed by a handshake and written order, later confirmed in documentation. That might be the time to offer a small gift, or suggest lunch or dinner
- Business Meals: An ideal way to relax after a successful conclusion to negotiations
Canada Minimum Wage
On December 29, 2021, Canada introduced a new Federal Minimum Wage affecting all federally regulated employees of CAD 15 (US$11.92), regardless which province or territory they work in. This is the lowest hourly rate which workers can be paid, although if the province mandates for more than CAD 15, the higher rate applies. For those workers not covered as federally regulated sector employees, the minimum wage will still be set according to which of the 10 provinces or three territories where they work. For example, as of October 2021, rates included Alberta CAD 15 (US$11.92), Newfoundland and Labrador CAD 12.50 (US$9.93), Northwest Territories CAD 13.46 (US$10.69) and Nunavut CAD 16.00 (US$12.71).
Canada Probation Periods
Canada’s 10 provinces and three territories have different statutory administrations and probation periods may vary. However, depending on the nature of the business, federal law may override provincial law. A probationary period consists of the first three months (although it can be six months in Prince Edward Island, New Brunswick, and Yukon) and when written into the contract can stipulate without notice, pay or severance. However, if a contract does not detail the probation period and termination entitlements, employees may be entitled to a severance package even if termination occurs during the statutory probation period.
Working Hours in Canada
Standard working hours are eight per day in a period of 24 consecutive hours, for a total of 40 in a week, stretching from midnight Saturday till midnight the following Saturday. Employees are entitled to one full day of rest, usually the Sunday. Except in certain circumstances the maximum working hours should not exceed 48 in a week. Also, during the working day, employees are entitled to one break period for each five-hour period worked, no less than half an hour.
Overtime in Canada
Although labor laws may differ depending on the province, any hours worked over the standard week (40-44 hours) are considered overtime and reimbursed at 1.5 times the normal hourly rate. Managers and executives and professions such as doctors, lawyers, dentists, architects, and engineers are precluded from overtime.
Notice Periods in Canada
An employer must provide an employee with ‘reasonable notice’ of intention to terminate employment in order for the employee to find another job (unless on a fixed contract) and this can differ between provinces. Typically, notice periods range up to eight weeks maximum. Employers must give ‘termination pay in lieu of notice’ regardless of the length of service or the company’s size. Written notice or pay in lieu does not apply in certain circumstances – if the employee has not completed three months’ continuous service, is being dismissed for just cause or the contract specifies an end date for employment. An employee is not legally required to give notice, but contracts usually include a notice period clause for both employer and employee. Again, each province/territory has its own rules and regulations.
Redundancy, Termination, Severance in Canada
If an employee has been continually working for a company for a minimum of 12 consecutive months before the employment was terminated, they have the right to termination pay in lieu of notice. Entitlement is two days of regular/average pay for each completed year they have been employed by their company before termination with the minimum payment being five days’ pay. All employees are entitled to this benefit pay unless they have been dismissed for ‘just cause’ or ‘willful misconduct.’ The only province to pay ‘severance,’ which is not the same as ‘statutory termination pay in lieu of notice,’ is Ontario – as long as the worker has been employed for five years. A one-time payment is made at the rate of one week’s salary for every year worked, capped at six months.
Pension Plans in Canada
To qualify for a Canada Pension Plan (CPP) – Old Age Security (OAS) payment, individuals need to be at least 60 years of age, but are not eligible for a full pension until the retirement age of 65. The benefits are reduced by 0.6% for each month that the employee takes his pension before retirement age. If delaying payment until 70, then the monthly payment will be increased by 0.7%. Anyone who is over the age of 65 and has lived in Canada for 10 years or more, can receive an OAS.
This taxable benefit replaces part of the former employee’s salary and is paid for the rest of their life.