Business Law and Compliance in the USA and Canada

Canada is a continuously attractive place to do business, whether as a Canadian corporation or a foreign investment. It frequently features on Forbes' list of the top countries for business and is a desirable location for IPOs, with the Toronto Stock Exchange becoming an increasingly favored exchange for overseas corporations.

However, like with any other nation, doing business in Canada involves its own set of laws, rules, and procedures, particularly in terms of governance, risk, and compliance.

With Canadian board directors who fail to comply with national and local regulations possibly facing legal consequences for their conduct, it is critical that anybody in charge of compliance and corporate governance understands their roles and responsibilities. Here, we look at all of the challenges surrounding governance and compliance in Canada. Being Compliant When Conducting Business in Canada Operating in Canada, like any other nation, requires compliance with country-specific regulations and legislation. Some are similar to those in other nations, and address issues such as employment and labor, the environment, and data privacy. Others, such as the French-language requirements for operating in Quebec, are specifically Canadian rules. Employment and Labour Laws Canadian Workplace Standards include regulations for labor laws, workplace standards, health and safety standards, and labour relations initiatives. These criteria are administered by both federal and provincial governments; while labor relations and employment are mostly under provincial jurisdiction, some industries are subject to federal restrictions. This might complicate things for firms that operate in multiple provinces; compliance teams must ensure that they are aware of and meet the numerous laws that apply to them. Wages, working hours, and time off, as well as pregnancy and parental leave, are all subject to federal and provincial regulations.

As if that wasn't enough, Canadian labor laws, both federal and provincial, underwent a number of changes in 2019, increasing the regulatory load on compliance teams.

The Chief Compliance Officer must be certain that their local offices are capable of meeting the necessary criteria. The difficulty of keeping track of regulatory duties, let alone meeting them, across multiple offices or subsidiaries should not be underestimated. Manual processes result in a disorderly manner, exposing your company to the danger of regulatory violations. As a result, businesses are increasingly relying on compliance software to streamline and centralize their governance and compliance operations across all offices and entities. Environmental laws Environmental legislation in Canada, like employment laws, is passed and regulated by both the federal and provincial governments. The Canadian Environmental Protection Act, the Canada Shipping Act, the Arctic Waters Pollution Prevention Act, and the Fisheries Act are all examples of federal legislation. Meanwhile, agriculture, forestry, mining, and hydropower development are generally governed by provinces, which means that they are also responsible for enacting a considerable number of environmental legislation The government's growing emphasis on environmental issues in recent years has brought these legislation into sharp light. While the goal of raising environmental awareness cannot be questioned, it does increase the regulatory load on compliance teams. Again, the ability to coordinate both central and local efforts is critical. This can be a particular issue because, as noted by law firm Blake, Cassels & Graydon LLP, "Environmental legislation and regulation is complex and frequently provides environmental regulators with considerable discretion in the enforcement of the law."

This complexity and subjectivity complicates firms' efforts to manage, record, and demonstrate environmental credentials throughout their Canadian activities.

The spotlight that environmental transgressors find themselves under, as well as the potential financial and reputational penalties, make it imperative that businesses remain, as Blake, Cassels & Graydon LLP notes, 'fully informed on what the relevant environmental laws allow and prohibit, and how to respond to the demands of both governments and the public'. Again, a strong and comprehensive approach is required to ensure that your diverse operations meet their duties under both provincial and federal legislation. It's critical to establish an effective governance framework for your subsidiaries and offices. This will help to ensure that your approach is comprehensive without redundancy or inefficiency, as well as provide assurance to the Board that you are properly addressing your environmental responsibilities. French Language Laws If you do business in Quebec, the Charter of the French Language declares French the official language of the province and establishes precise guidelines governing the language used by persons and businesses there. The Charter requires that business paperwork, products, and services - including websites and packaging - be available in French. Data and Privacy Laws Every organization is now familiar with GDPR, the General Data Protection Regulation that governs how EU citizens' data is handled. Those operating in Canada are also subject to additional requirements, such as the "Personal Information Protection and Electronic Documents Act" (PIPEDA) and CASL, Canada's Anti-Spam Legislation, which according to Deloitte is "one of the toughest laws of its kind in the world, making its application and interpretation particularly thorny." Data protection, like environmental legislation, is a highly publicized problem. Just last week, retail giant H&M received a record penalties for GDPR violations. The importance of following data regulations cannot be overstated, and as with the other legislation discussed above, Canadian CCOs will want to ensure that their firms adopt a strict approach to compliance.