People build businesses, but finding those people, retaining them, and nurturing them is hard work! Many start-up founders are guilty of treating HR as an afterthought until they’re hit with a reality check of bad hires, toxic workplace culture, high employee turnover, and ultimately a business straying off its trajectory!
The good news is you’re hiring in Canada! Canada has the most educated workforce in the world. 62% of Canadians aged 25–64 possess post-graduation. 11 universities from Canada made it to the 2022 Global University Employability Ranking. Canada also ranks #5 for diversity of the workforce in the world. So you’re in good hands!
Please note that our following guide is just that, meant to point you in the right direction and familiarize you with the needs and expectations of HR in Canada. It is not legal advice.
(Compared to other countries in North America)
Source: Invest Canada
If you’re an international entrepreneur looking to hire Canadian talent, this guide is for you. A no-nonsense, actionable take on everything you need to know as a start-up founder setting up your team in Canada.
1. Get cozy with Canadian employment laws and regulations.
It’s better to be safe than sorry! So let’s get you acquainted with the lay of the land. Here are a few overarching notes for any start-up entrepreneur building a team in Canada:
- Federal/Provincial: Canada has Federal and Provincial labour laws. Every province in Canada has its own unique set of labour laws. The laws we talk about in this guide pertain to Ontario.
- Wages: Each province sets its minimum wage and its overtime wages. As of January 2023, Ontario’s minimum wage is $15.50 per hour, and overtime is 1.5 times the regular pay rate beyond 44 hours per week. If you are looking to hire skilled professionals, you will be expected to pay more than minimum wage. Glassdoor and Payscale are great websites to look at to get compensation range standards for your position.
- Employment Classification: The basic classification of employment recognized in Canada are Permanent Employment, Contract/Freelance Employment, and Part-time Employment. Misclassifying an employee can have serious legal consequences. Apart from this, there also exist other types of employment like summer jobs, internships, co-operative, seasonal, and unpaid voluntary work.
Source: Retail Council
2. Don’t be late (pun intended!) to Canadian work culture
Taking the time to recognize what Canadians value in their work culture is a very important pillar in building successful start-up teams here.
- Canada has two commonly spoken languages: English and French. Although most other provinces prefer English, if you are doing business in Quebec you will need to brush up on your French.
- Canada is very employee-friendly: Apart from the cultural importance of work-life balance, our country has many laws that protect this standard.
- Work Week: The average work week in Ontario is around 44 hours.
- Vacation Time: Employees with less than 5 years of employment are entitled to a min. 2 weeks of vacation time after each 12-month vacation entitlement year. Employees with 5 or more years of employment are entitled to min. 3 weeks of vacation time.
- Vacation Pay: Vacation pay must be at least 4% of the gross wages
- Breaks: Employees are entitled to at least one 30-minute break every 5 consecutive hours of work.
- Pregnancy Leave: Pregnant employees have the right to take pregnancy leave of up to 17 weeks of unpaid time off work
- Parental Leave: Both new parents have the right to take parental leave of up to 61 or 63 weeks of unpaid time off work.
- Canadian business communication is traditional: Strong handshakes, eye contact, conservative dressing, punctuality, and honouring commitments are highly regarded. It is not common to arrive without an appointment. It is considered rude to have loud conversations or jump lines.
- Canada does not discriminate: We do not introduce people based on gender; rank is more important. A person’s authority is not dictated by gender, caste, social class or status. Women are very active in the workplace and business in Canada.
3. Get these ducks in a row before your first hire
As a registered business in Canada, you would already have a nine-digit Business Number (BN / Tax ID number). If you don’t have one and are registering for one, you can also request your Payroll Deductions Account simultaneously.
- Payroll Deductions Account: As an employer, before you start hiring, you need to set up a Payroll Deductions account. You can do this in 3 ways:
- Directly from your CRA’s My Business Account online portal
- Fill out form RC1, Part C, and mail it to the nearest TSO or TC
- Call the CRA at 1-800-959-5525 and ask for a payroll program account
If you intend on having offices in multiple cities, you will need separate payroll accounts for each office.
- Payroll Deductions: Now that you have your account, here’s what you have to use it for. Employers in Ontario have the responsibility to deduct the following 4 amounts:
- The Canada Pension Plan contribution
- The Employment Insurance Premium
- Federal Income Tax
- Provincial and Territorial Income Tax
These deductions must be remitted to the Canada Revenue Agency (CRA) in addition to your portion of the Canada Pension Plan and Employment Insurance contributions. These amounts must be banked separately and cannot be included in your operating costs.
As of January 2023, the payroll deductions have undergone updates. The latest Payroll Deductions Tables can be found here.
You can find CRA’s online calculator here to assess deductions on your own, or you could also avail the personalised and free Liaison Service Officer service from the CRA, tailored to the needs of small business owners and self employed individuals. They help you understand your tax obligations better.
- Filing Summary of Deductions: Each employee’s income and deductions must be filed on T4 or T4A slips. All of it can be done completely online for free. Many accounting software options already have compatible XML file formats that simply need to be submitted to the official site.
- Frequency of Deductions: Payments can be submitted monthly or quarterly. You can also make accelerated remittances two or four times a month.
- The Cost of Non-Deductions: For any reason, if you fail to withhold or submit the deductions, the penalties by the CRA are very heavy. The CRA can even take legal action and seize income or property.
4. Alright, let’s get hiring in Canada!
The hiring process can be a painful loop if not streamlined well from the beginning. Let’s work through this together, one step at a time.
Step 1: Create a job description
A mindfully written job description can solve half your battle by attracting the right type of talent to the job. Here are some must-have components in your job description for any role:
- Job title: A clear job title lets employees know their role and outline their basic responsibilities.
- Duties: Duties and responsibilities allow you to list the regular, day-to-day tasks expected out of the employee, along with umbrella outcomes contributing to the growth of the business.
- Education and experience requirements: Filter out the level of expertise you require with education and experience benchmarks.
- Skills: Add hard and soft skills to filter out the right fit further. Think tools, software, languages, abilities, etc.
Salary range: Adding a salary range attracts more applicants to apply. It is recommended to add one.
Company description: Include a company description for credibility, to attract employees interested in your industry, and to find the right cultural fit. If you’re circulating a document with this JD, ensure it is on your company letterhead.
Application Process: Be sure to include a clear next step for an applicant. Are they to fill a form? Write to you with a cover letter and CV? What is the deadline for applications?
Step 2: Post/Share the Job Opening
Canada has a multitude of online and offline job posting options. Here are some popular online job boards you can consider for your team hires.
- Government of Canada Job Bank
- Monster Canada
- Adecco Canada
- Indeed Canada
- CareerBuilder Canada
Another equally effective method of hiring the right team in Canada is catching the top talent straight out of university.
- University Placements: Visit universities and schools with the right talent fit to get a hold of world-class talent. 11 Canadian universities have made it to The Global University Employability Ranking 2022:
- University of Toronto, Toronto
- McGill University, Montreal
- University of British Columbia, Vancouver
- University of Montreal/HEC, Montreal
- McMaster University, Hamilton
- University of Alberta, Edmonton
- University of Ottawa, Ottawa
- University of Victoria, Victoria
- University of Waterloo, Waterloo
- Toronto Metropolitan University (Ryerson University), Toronto
- Université du Québec, Quebec City
Want to hire STEM experts in Canada?
In 2019 alone, more than 130,000 new STEM students graduated in Canada. In 2017, more than 70% of the graduates were from Toronto and Montreal regions. The University of Toronto and McGill University are well known for their STEM talent.
Want to hire Life Sciences professionals in Canada?
4.8 million Canadians hold a degree from a STEM or healthcare-related program. The world’s 10 largest pharmaceutical companies have key operations in Canada. We conduct 5% of the world’s clinical trials and are one of the largest world markets for medical devices.
You can find high-quality talent graduating out of research programs and professional courses from some of the leading research institutions in Canada:
- Networks of Centres of Excellence (NCE)
- Canadian Institutes of Health Research (CIHR)
- Centre for Probe Development and Commercialization (CPDC)
- Center for commercialization of regenerative medicine (CCRM)
- Institute for research in immunology and cancer (IRICoR)
- Canadian Centre for Aging & Brain Health Innovation
- Center for drug research and development (CDRD)
- Center for surgical invention and innovation (CSII)
- Structural Genomics Consortium (SGC)
- Montreal Clinical Research Institute
- National Research Council (NRC)
- Brain Repair Centre
- MaRS Innovation
Want to hire tech professionals in Canada?
Toronto, Ottawa, Vancouver and Montreal rank #4, #10, #11 and #16, respectively, in the tech talent markets in North America.
Want to hire Media and Entertainment experts in Canada?
Canada ranks #1 for the availability of digital media talent in the G7 countries. Vancouver’s Centre for Digital Media and Nova Scotia College of Art and Design University in Halifax are some examples of top universities dispensing top visual effects and animation, video game development, and film and television graduates.
- Job Fairs: Job Fairs give you the opportunity to interact with talent face-to-face and even hire on the spot! You can track job fairs around you on websites like Event Brite and HireCanada.
- Recruitment Agency: If you are looking to hire a large number of employees or want to headhunt for senior positions in your start-up in a short amount of time, recruitment agencies could be the best bet for you! There are many right around you:
Step 3: Evaluate Applicants
Asking applicants to send their CVs with a cover letter, followed by inviting shortlisted applicants for in-person interviews, is commonplace in Canada. Virtual interviews are a great way to get to know talent before taking the conversation further.
Because of Canada’s size, we have 6 timezones. Do keep this in mind when setting up interviews or when considering hiring remote employees from across the country.
Source: Time and Date
Certain types of questions may be considered inappropriate or discriminatory in Canada. It is best to avoid questions that sound like this:
- Are you married? Do you have children? Do you plan on having kids?
- How old are you?
- Are you available to work outside regularly established work hours (ex, weekends for office jobs or coming in on days off shift work)?
- Which religion do you practise?
- What are your political views?
- Are you eligible to work in Canada on a permanent basis? (However, employers must obtain proof of eligibility at the outset once the candidate is shortlisted)
Step 4: Share an Offer Letter and Formalize with a Contract
Offer of Employment
Make an offer of employment that outlines the details of employment. This letter should have the following sections:
- Work Schedule
- Nature of Employment
- Wages and Benefits
- Leave/Vacation terms
- Working Conditions
- Any other policies
You can download a template for an Offer of Employment here.
If the employee agrees to the terms outlined in the Offer of Employment, you can send them an official contract of employment to close the deal.
This is a much more in-depth contract that must detail the following:
- Official details of the two parties (Employee and Employer)
- Job Type
- Job Description, Role and Responsibilities
- Compensation, Deductions, Benefits
- Termination Terms
- Any other final details
Your employment standards defined in the contract must meet the requirements of the Federal Labour Standards and Ontario Employment Standards. It is best to have a lawyer look over your template before sending it to a potential employee.
Tools like LawDepot can help you customize free employment contracts.
Step 5: Onboarding a New Hire
Okay, so you bagged the talent of your choice! Yay! What’s next?
Apart from celebrating your new hire, don’t forget your onboarding process! Here’s a quick checklist for you:
- Examine the employee’s Social Insurance Number (SINs starting with the digit 9 are not Canadian citizens or Permanent Residents, which means they may be allowed to work only for a particular employer and time period under a valid employment authorization issued by Immigration, Refugees, and Citizenship Canada.)
- Get them to fill out Form TD1, Personal Tax Credits Return, to determine how much tax will be deducted from the employee’s income.
- Start a file for the new employee to collect employee records, timesheets, performance evaluations, and forms related to payroll, ex, T4 slips.
That’s it! You’re now ready to get started building your dream team in Canada! Canada is a great place to start-up and work; we’re excited about your contribution to the Canadian business landscape and workplace!
Looking to start-up and build a team in Canada?
We’ve got you covered! BHive is a start-up incubator located in Brampton, Ontario, that offers international start-ups the tools, resources, and space to establish – and quickly scale – their businesses in Canada and North America. To apply to our Global Entrepreneur Incubation Program, click here!