The Canada Report

A best practices guide to doing business up North

Without a doubt, companies face challenges when doing business in other countries. Whether they are just beginning to expand internationally or upholding their long-term global presence, businesses must continually navigate foreign customs, politics and rules in order to maintain successful operations outside their native countries.

But some companies—particularly U.S. companies—may find that conducting business in Canada presents far fewer challenges than operating in other nations overseas. One clear advantage is that Canada is geographically close to the U.S. Additionally, Canada and the U.S. share many cultural similarities.

Regulatory Review

Always of significant importance to investigate before American companies look to do business with Canada is its ever-evolving regulatory landscape. While not at all the same highly charged battlefield that currently exists in the U.S. as Democrats and Republicans duke it out over the Dodd-Frank Act, the Patient Protection and Affordable Care Act, and other recent, divisive rules, Canada still has its share of political and regulatory issues of which Americans should be aware.

Political Structure

In terms of the political climate, Canada’s current government is possibly the most “pro-American” regime to come to power in the past 15 years. Last year, Canadians elected a majority for the Conservative Party, which had been a minority government the previous two terms—meaning that, like in the U.S., it was the ruling party but it didn’t have sufficient voting power to push its agenda. There likely won’t be another election for another four years, so the political climate should remain relatively static for the foreseeable future.

Additional changes have been made in regard to merger review under the Competition Act in an effort to modernize the process and make it more consistent with the U.S. regime for foreign investment. Under the new Competition Act, the government has jurisdiction to review any investment in Canada where there’s an acquisition that could have a material or adverse effect on competition. “That’s usually only for larger investments and in investments where there’s a lot of concentration within one industry,” Singer says.

Another regulatory area where Canada differs from the U.S., and which may receive a more-significant overhaul soon, is the telecommunications industry. The Canadian government already has begun deregulating ownership and control of satellite carriers above the country, but the extent of that deregulation is still in question.

Litigation Lowdown

American in-house counsel can appreciate one definite perk of conducting business in Canada: Corporate litigation is much less rough-and-tumble than it is in the U.S.

Procedural Details

American in-house counsel must be aware of some key differences in civil litigation in Canada as compared to the U.S.

Key Cases

It behooves American in-house counsel to stay abreast of the major business-related cases and decisions emerging from Canadian courts.

Sidebar: Questions About Quebec

When it comes to doing business in Canada, there’s really only one semi-significant difference of which companies should be aware: Quebec. That’s not to say that doing business in Quebec is overly difficult because it’s not—it’s just a bit dissimilar from the other nine provinces.

Sidebar: Copyright Reform

Canada’s federal government is attempting again to pass a new copyright bill.

Ashley Post

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