doing business in canada - Davies Ward Phillips & Vineberg LLP

Canada tends to look to the United States rather than Europe for its regulatory models. For example, Canadiansecurities laws evolve in response to developments in the United States.Canada's courts of general jurisdiction are provincially administered, but the Supreme Court of Canada acts as acourt of final appeal for all of Canada. Although Canada also has a federal court system, its jurisdiction is verylimited compared with federal courts in the United States. The Canadian Federal Courts System deals primarilywith matters arising under Canadian federal statutes and claims against the federal government. Although alljudges of provincial superior courts in Canada, and Federal Court and Supreme Court judges, are appointed bythe federal government, the independence of the judiciary is well-established and courts are not subjected topolitical interference or influence. Each province also has lower courts presided over by provincially-appointedjudges who hear cases of less importance.ECONOMIC SYSTEMCanada is an affluent, high-tech industrial society with a market-oriented economic system and high livingstandards. Since World War II, the impressive growth of the manufacturing, mining, and service sectors hastransformed the nation from a largely rural economy into one primarily industrial and urban. The 1989 U.S.-Canada Free Trade Agreement ("FTA") and the 1994 North American Free Trade Agreement ("NAFTA") (whichincludes Mexico) touched off a dramatic increase in trade and economic integration with the United States.Given its natural resources, skilled labour force, stable political and economic systems, and modern capitalinfrastructure, Canada enjoys solid economic prospects.Canada also has free trade agreements with countries, such as Costa Rica, Chile and Israel. In 2008, Canadasigned three free trade agreements with the European Free Trade Association, which includes Iceland, Norway,Switzerland and Liechtenstein, Peru and Colombia.The exchange rate of the Canadian dollar is allowed to float in relation to other currencies. Canada's centralbank, the Bank of Canada, sets key interest rates, in practice, independently of the federal government.According to the World Economic Forum Global Enabling Trade Report 2010, Canada ranks eighth among 125countries and leads the G-7 in effectiveness of market access, that combines factors such as borderadministration, transport, communications infrastructure and business environment, to further the efficient flowof goods over borders and to their final destination.Canada offers many advantages as a place to do business:• Canada has the lowest business costs in the G7.(KPMG's Competitive Alternatives 2010)• Canada has the lowest tax rates in the G7.(KPMG’s Competitive Alternatives 2010 Special Report: Focus on Tax)• Canada ranks first among the G-7 and second among OECD countries for the lowest number ofprocedures, costs and time required to establish a new business.(Doing Business in 2010 - The World Bank Group)• Canada's overall economic competitiveness is ranked seventh in the world and second in the G7.(The International Institute of Management Development's World Competitiveness Yearbook 2010)• Canada ranks ninth in the world in terms of its capability for future economic growth.(The World Economic Forum's Global Competitiveness Report 2009-2010)Introduction 3