Canada is a top destination for foreign companies and investors attracted to our wealth of natural resources, stable and sound political and financial systems, and world-class infrastructure. While Canada is an open economy and welcoming of foreign investment, there are issues that corporations and investors should keep in mind when doing business in Canada, such as our two legal systems (civil and common law) and the division of legislative authority between the federal and provincial/territorial governments.
Canada is a federal state with ten provinces and three territories, each with its own government. The Constitution Act, 1867 divides legislative authority between the federal and provincial governments.
The federal government has exclusive jurisdiction over national matters such as the regulation of interprovincial and international trade and commerce, bankruptcy and insolvency, foreign affairs and criminal law. The federal government also has jurisdiction over the territories; however, the territorial governments do have authority over a number of local government programs.
The provincial governments have legislative power in areas such as property and civil rights in the province, education, and all matters of a local or private nature.
All provinces and territories in Canada are common law jurisdictions with the exception of Québec, which is a civil law jurisdiction. Courts in the common law jurisdictions apply a combination of statute and common law, whereas courts in Québec apply the Civil Code as well as federal and provincial statutes.