Health Tax and report the earnings
of employees working in Ontario and
pay Workplace Safety Insurance Board
insurance premiums.
source in Canada is required to file a
Canadian tax return and pay income tax.
Thankfully, Canada has a progressive tax
system. Sole proprietors and partners in
a partnership are taxed at the individual
level. Canadian corporations pay a flat
rate of income tax. The current federal
corporate tax rate is 15 percent and
the Ontario corporate tax rate is 11.5
percent, with a combined rate of 26.5
percent.
reduce tax owed.
In addition to income tax, a business
operating in Ontario may incur taxes
such as:
`disposition' of an asset;
approximately 1.5 percent of the fair
market value of any real property
bought or sold in Ontario (certain
municipalities such as Toronto
also levy a tax in addition to the
provincial tax);
for payroll-related expenditures such
as employment Insurance and the
Canada Pension Plan;
residents; and
resident foreign corporations that
carry on business in Canada through
a branch.
to non-unionized employees and their
employers in Ontario, and does not apply
to independent contractors.
The Employment Standards Act
("ESA") and its regulations provide
standards for employee wages, hours
of work, overtime entitlement, vacation
entitlement and leave of absence
entitlements among other things.
Some employees may be exempt from
particular standards, depending on the
nature of the employment.
We normally recommend that
employers enter into a written
employment agreement with their
employees, and make the signing of the
agreement a condition of any job offer.
Employers must also comply with
legislation designed to protect employ-
ees from physical harm (the Ontario's
Occupational Health and Safety Act) and
from discrimination (the Ontario's Hu-
man Rights Code). In general, employers
cannot discriminate against employees
(or prospective employees) based on pro-
tected traits, and must also accommodate
employees with disabilities.
does not exist in Canada. Employees
are either employed for a specific period
of time or for an indefinite period.
If individuals are employed on an
indefinite basis, they must generally be
given notice (or pay in lieu of notice),
if their employment is terminated
without cause.
Whether or not an employee is
entitled to receive notice of termination
or other compensation depends on the
circumstances of the termination. There
are two categories of termination: with
cause and without cause.
"Without cause" means the termi-
nation is not a result of any specific
employee may also be considered to have
been terminated without cause if they are
constructively dismissed. Constructive
dismissal occurs when an employer
unilaterally changes a material term of
a person's employment without consent
from the employee, or permission in the
employment agreement.
Compensation for this type of termi-
nation is established by the employee's
written employment agreement or by the
common law and the ESA if there is no
such agreement. In general, the ESA
provides for a minimum amount of notice
(or pay in lieu of notice). In some cases,
the employer may also be required to pay
severance in addition to termination pay.
A court may also extend the reasonable
notice period beyond the ESA minimums
based on the employees' age, length of
employment, nature of work, and other
circumstantial factors.
An employee may only be terminated
for "cause" if they have committed
significant misconduct. Employee's
dismissed with cause are not entitled to
any notice or compensation. We caution
employers to seek legal counsel before
terminating someone's employment
when they believe there is cause for
termination.
establish a business in Ontario or
to expand your existing business
into Ontario, we congratulate you on
embarking on this exciting journey. We
hope the topics discussed here have
provided you with a basic understanding
of some of the key legal issues to be
considered when operating a business
in Ontario.
rts-eng.html>