Starting a new business in Canada is an exciting venture. From creating a business plan to finding your first customer, there are many steps to take. One of the most important is getting the right business licenses and permits. This process ensures your business operates legally from day one.
Understanding licensing can feel complicated. Requirements often change depending on your location and industry. This guide will walk you through the essential steps for how to get a business license in Canada. We will cover the different types of licenses you may need and show you where to find the correct information. By the end, you will have a clear path to licensing your Canadian business.
Is a Business License Required in Canada?
Yes, most businesses in Canada need to be licensed or registered. However, there isn’t one single “business license” that covers every type of operation across the country. The licenses and permits you need depend on three main factors:
- Your business activities: What products or services do you offer? Businesses in regulated industries like food service, childcare, or construction have specific requirements.
- Your business structure: Are you a sole proprietor, a partnership, or an incorporated business? The structure can affect your registration needs.
- Your location: Licensing is managed at the federal, provincial, and municipal levels. You may need permits from all three.
For example, a hairstylist operating a salon from their home in Toronto will need different permits than an online-only consulting business based in Vancouver. It is your responsibility as a business owner to find and secure all the necessary permissions to operate legally.
Types of Business Licenses and Permits in Canada
Navigating the different levels of government is a key part of the licensing process. Each level has its own jurisdiction and set of rules.
Federal Licenses and Permits
The federal government regulates certain industries across the entire country. If your business operates in one of these sectors, you will need a federal license in addition to any provincial or municipal ones.
Some key federally regulated industries include:
- Broadcasting (radio and television)
- Aviation
- Firearms and ammunition
- Food production and importation
- Manufacturing pharmaceuticals
- Interprovincial or international transportation
You must also register your business with the federal government if you plan to charge Goods and Services Tax / Harmonized Sales Tax (GST/HST), have employees (payroll deductions), or import/export goods. You can do this through the Canada Revenue Agency (CRA) to get a Business Number (BN).
Provincial and Territorial Licenses and Permits
Each of Canada’s 10 provinces and 3 territories has its own rules for business registration. This is the level where most businesses will register their legal business name.
Provincial regulations often apply to specific occupations and business activities, such as:
- Selling alcohol or tobacco
- Operating a real estate agency
- Providing financial services
- Running a daycare
- Environmental permits for industrial activities
For example, a construction company in Alberta must register with the provincial government and may need specific permits for building projects. A lawyer in Quebec must be licensed by the provincial bar association. You will need to check your specific province’s or territory’s requirements to see what applies to you.
Municipal Licenses and Permits
Municipal governments (cities, towns, and regional districts) issue local business licenses. These licenses give you permission to operate a business within that municipality’s boundaries.
Common municipal requirements are related to:
- Zoning: Ensuring your business type is allowed at your chosen location (commercial, industrial, or home-based).
- Building and fire codes: Meeting safety standards for your premises.
- Signage: Getting permits to put up signs.
- Specific activities: Such as operating a restaurant, taxi service, or mobile food truck.
Even if you run an online or home-based business, you will likely need a municipal business license. These local permits are often the first and most fundamental license a new small business will get.
4 Steps to Get Your Canadian Business License
Getting licensed is a straightforward process when broken down into steps. Follow this guide to ensure you cover all your bases.
1. Research Your Requirements with BizPaL
The best place to start your search is BizPaL. This is a free online service created by the federal, provincial/territorial, and municipal governments. It provides a customized list of the permits and licenses you may need to start and run your business.
To use BizPaL, you simply enter:
- Your location (province and municipality).
- Your industry (e.g., “restaurant” or “retail store”).
- Your intended business activities.
BizPaL will generate a list of potential permits from all three levels of government. It also provides links to the forms and contact information for the agencies that issue them. This tool can save you hours of research and helps ensure you don’t miss any important requirements.
2. Register Your Business and Get a Business Number (BN)
Before you can apply for most licenses, you need to register your business.
- Sole Proprietorships and Partnerships: You must register your business name in the province or territory where you operate, unless you are using only your legal personal name for the business.
- Corporations: You must incorporate your business either provincially or federally. Incorporation legally separates the business from its owners.
Once your business is registered, you will need a Business Number (BN) from the Canada Revenue Agency (CRA) if you plan to:
- Register for GST/HST.
- Have employees and need a payroll account.
- Import or export goods.
- Operate as a corporation.
Your nine-digit BN is your single account number for interacting with the federal government.
3. Complete and Submit Your Applications
With your research from BizPaL and your BN in hand, it’s time to apply. For each license or permit on your list, you will need to fill out an application form and submit it to the correct government agency.
Be prepared to provide:
- Your registered business name and Business Number.
- Details about your business activities and location.
- Personal information for the business owners.
- Application fees.
Most applications can be completed online, but some may require you to mail forms or visit a government office in person. Pay close attention to deadlines and processing times, as it can take several weeks to receive your license.
4. Display and Renew Your Licenses
Once your licenses are approved, you are ready to operate. Many municipalities require you to display your business license in a visible place at your business location.
Licenses are not permanent. Most must be renewed annually. Mark your renewal dates on a calendar and be sure to renew on time. Operating with an expired license can lead to fines or other penalties.
Frequently Asked Questions
How much does a business license cost in Canada?
The cost of a business license varies widely. Municipal business licenses can range from $50 to a few hundred dollars per year. Provincial registration fees are typically between $60 and $400. Federal licenses for regulated industries can be more expensive. It’s important to budget for这些 fees as part of your startup costs.
How long does it take to get a business license?
Processing times differ depending on the type of license and the government agency. Online municipal license applications can sometimes be approved within a few days. Provincial registrations or more complex permits can take several weeks. Apply as early as possible to avoid delays in opening your business.
Do I need a business license for an online business in Canada?
Yes, online businesses in Canada generally need a license. At a minimum, you will likely need a municipal license for a home-based business, even if all your sales are online. You will also need to register for a BN and GST/HST if you meet the sales threshold ($30,000 in a 12-month period).
Your Next Steps
Getting the right business license is a critical step toward building a successful and sustainable business in Canada. By following this guide, you can confidently navigate the process and ensure your business is compliant from the start.
Begin by using the BizPaL tool to identify your specific needs. From there, register your business, complete your applications, and keep track of your renewal dates. Taking the time to get properly licensed provides peace of mind and sets a strong foundation for your future growth.