doing business in canada - Davies Ward Phillips & Vineberg LLP

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ight to restrict the acquisition of land by people who are not citizens or permanent residents, or bycorporations and associations controlled by them.In Ontario, the Aliens' Real Property Act grants non-citizens the same rights as Canadians to hold or dispose ofreal property. Under the Extra-Provincial Corporations Act, a corporation incorporated outside of Canada mustobtain an extra-provincial licence to acquire, hold or convey real property in Ontario, but such licences are easilyobtained.In Québec, pursuant to An Act respecting the acquisition of farm land by non-residents, non-residents of Québeccannot acquire farm land unless they receive the authorization of the Commission de protection du territoireagricole du Québec, the authority in charge of preserving agricultural land in Québec. Some other provinceshave similar restrictions to preserve agricultural land.LAND USE PLANNINGIn Ontario, the Planning Act provides the principal means for the government to control the development anduse of land. Land use planning is the responsibility of the provincial government and is supervised at theprovincial level, but significant planning functions have been delegated to the various regional governments andmunicipalities. Land use is controlled through such instruments as the official plan (a long-range general planfor a region or municipality) and zoning by-laws (which regulate, for each parcel of land in the municipality, theuses permitted and other matters such as required parking and the type, size, height and location of buildingsand structures). For a purchaser of land, both the official plan and particular zoning by-laws are crucial. Mostmunicipalities require that site plans be approved before the construction of any new development. Site plansset out the details of a development (including the location of buildings and related facilities, such aslandscaping, services, driveways and parking spaces). Most municipalities also require the developer to enterinto an agreement ensuring construction and ongoing maintenance in accordance with the site plans.In Ontario, any subdivision of land requires the consent of the local committee of adjustment or subdivisioncontrol committee pursuant to the Planning Act. This requirement also applies to a mortgage or the grant of anyother interest in land (such as a lease) for 21 years or more (inclusive of all renewals), where the mortgage orinterest is granted over only part of a landholding. The failure to obtain such a consent when otherwise requiredwill result in the failure of the deed, mortgage or lease to create any interest in the real property. Although thereare a number of exemptions to the requirement for consent, most contracts for the purchase of real property inOntario are made subject to any required consent, and the cost and responsibility for obtaining such consents isusually allocated to the vendor. Anyone wishing to subdivide land in Ontario or to subdivide and sell lots mustobtain governmental consent and may be required to submit a draft plan of subdivision for approval. Normally,the municipality will require the developer to enter into development agreements with it, whereby the developeragrees to provide sewers, roads and other services for the subdivision, the dedication of certain lands for publicuse and certain other public benefits.In Québec, An Act respecting land use planning and development gives to each municipality the responsibility forthe administration of its territory for municipal purposes. The regional county municipality adopts adevelopment plan setting out general land development policies for the territory as well as the general policieson land use for different parts of the territory. The plan applies to all municipalities within the regional countymunicipality. In turn, the council of each municipality has the power to adopt zoning, subdivision and building bylawsfor the whole or any part of its territory, but these by-laws must be consistent with the objectives of thedevelopment plan. Municipal councils may impose certain conditions for the approval of subdivisions, such asminimum lot areas and dimensions and provisions for rights-of-way.In the case of metropolitan communities in Québec, the metropolitan community adopts a metropolitan land useand development plan that sets out general policies. This general plan is carried out by the city, which haspowers similar to those of a local municipality under An Act respecting land use planning and development.8 Real Estate
TITLE INSURANCE, TITLE OPINIONS AND DUE DILIGENCEUpon an agreement of purchase and sale being entered, it is generally the responsibility of the purchaser(through its solicitor) to conduct due diligence on the property. This will generally include title and zoningsearches, off-title searches and inquiries and a review of all leases, surveys and other agreements associatedwith the property.The traditional approach in most commercial transactions in Canada was for purchasers and lenders to receive atitle opinion from their solicitors in respect of any property that was being acquired or secured. The title opinionwould be based on the title search, off-title inquiries and other due diligence investigations conducted by thesolicitor. If a defect in title was not addressed in such an opinion and a loss was suffered, the purchaser or thelender could sue its solicitor for negligence or breach of contract in addition to the remedies it had against thevendor or the debtor, as applicable.In recent years, Canadian lenders and purchasers are increasingly accepting title insurance policies in lieu oftitle opinions. With title insurance, a purchaser or lender relies on the title insurance policy which guaranteesgood and marketable title rather than its solicitor's title opinion. In a typical title insurance policy there is a dutyon the title insurer to indemnify or reimburse the insured for any actual losses suffered as a result of a defectivetitle, as well as a duty to defend and pay the legal defence costs and expenses in the event of a claim thatthreatens the insured's title to the property.REGULATION OF REAL ESTATE BROKERSReal estate brokers are subject to special regulation in Canada, and each province has legislation that regulatesthe trade in real estate. In Ontario, real estate brokers are governed by the Real Estate and Business Brokers Act.The Act is administered by the Real Estate Council of Ontario ("RECO").The Act requires a person who wishes to trade in real estate, as a broker or a salesperson, to be registered inthat capacity. A salesperson is a person employed, appointed or authorized by a broker to trade in real estate.The Act precludes a person from acting on behalf of a corporation or partnership in connection with a tradeunless the person and the corporation or partnerships are registered as brokers. A registered broker orsalesperson must be a Canadian resident and may not trade in Ontario real estate from an office outsideOntario.In addition to the Act, brokers and salespersons must comply with the terms and conditions of membership inRECO, including compliance with its code of ethics. RECO can lay charges under the statute, has authority to putconditions on a broker's registration and handles consumer complaints against its members.In Québec, real estate brokers are subject to similar rules. In addition, pursuant to the Regulation respecting theapplication of the Real Estate Brokerage Act and the By-law of the Association des courtiers et agentsimmobiliers du Québec, a person applying for a broker's or agent's certificate must have at least oneestablishment in Québec or, in some cases, undertake to work at an establishment in Québec.REGULATION OF MORTGAGE BROKERS AND LENDERSMortgage brokers and lenders in Ontario are regulated by the Mortgage Brokerages, Lenders and AdministratorsAct, 2006. Under the Act, no person can carry on the business of dealing or trading in mortgages in Ontario, orcarry on business as a mortgage lender in Ontario (which the Act defines as lending money in Ontario on thesecurity of real property) unless the person holds a brokerage licence issued under the Act by theSuperintendent of Financial Services, or is exempted under the Act. Canadian financial institutions subject toReal Estate 9
Page 1 and 2: DOING BUSINESSIN CANADAYOUR COMPLET
Page 3 and 4: ONTENTSTABLE OF CONTENTSINTRODUCTIO
Page 5 and 6: IntroductionPOLITICAL AND CONSTITUT
Page 7 and 8: 5RealEstateIndustrial and Intellect
Page 9: accordance with directions from the
Page 13 and 14: 11EnvironmentalLawIndustrial and In
Page 15 and 16: commercial activities, or carrying
Page 17 and 18: The federal government currently re
Page 19 and 20: 17Types ofBusiness OrganizationIndu
Page 21 and 22: provincial law cannot do so as of r
Page 23 and 24: partnership, limited partners’ li
Page 25 and 26: parties. In Québec, joint venturer
Page 27 and 28: 25Financing aBusiness OperationIndu
Page 29 and 30: The Civil Code of Québec provides
Page 31 and 32: 29CorporateGovernanceIndustrial and
Page 33 and 34: Instrument 58-101. The practices re
Page 35 and 36: 33CompetitionLawIndustrial and Inte
Page 37 and 38: BID-RIGGINGBid rigging is any agree
Page 39 and 40: anticompetitive agreements among co
Page 41 and 42: 39ForeignInvestmentIndustrial and I
Page 43 and 44: apply for Canadian citizenship. (Pe
Page 45 and 46: (D)GENERAL REVIEW THRESHOLDSThe fol
Page 47 and 48: there be an "acquisition of control
Page 49 and 50: Industrial and Intellectual Propert
Page 51 and 52: to perform or cause them to be perf
Page 53 and 54: Registration grants an exclusive ri
Page 55 and 56: PIPEDA applies in all provinces of
Page 57 and 58: Employment LawCanadian employment l
Page 59 and 60: displacement, laying-off, suspensio
Page 61 and 62:
easonable cause to believe that the
Page 63 and 64:
63Retirement Plans, EmployeeBenefit
Page 65 and 66:
• funding;• eligibility;• pen
Page 67 and 68:
67Temporary Entry andPermanent Resi
Page 69 and 70:
INTERNATIONAL AGREEMENTSIn recent y
Page 71 and 72:
immigrant in another class, he or s
Page 73 and 74:
73Bankruptcy andInsolvency Proceedi
Page 75 and 76:
BANKRUPTCYBankruptcy results in the
Page 77 and 78:
INTERNATIONAL BANKRUPTCYASSETS LOCA
Page 79 and 80:
Tax ConsiderationsThis chapter prov
Page 81 and 82:
TAX REPORTINGAnnual Tax ReturnsCana
Page 83 and 84:
Québec has legislation that limits
Page 85 and 86:
Amendments, SIFTs and their unithol
Page 87 and 88:
Conversely, where a Canadian reside
Page 89 and 90:
A person, whether resident in Canad
Page 91 and 92:
APPENDIX I: CANADA’S IN FORCE TAX
Page 93:
TORONTODAVIES WARD PHILLIPS & VINEB
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doing business in canada - Davies Ward Phillips & Vineberg LLP

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