Canada is in the sights of many U.S. retail investors who are eager to take advantage of its strategic location, flourishing retail market and comparatively stable economy. Expanding into Canada can be extremely lucrative, but in order to fully take advantage of the available opportunities, market entrants must be sufficiently knowledgeable about national and provincial legislation to achieve and maintain Canadian retail compliance.

Canadian law firm Bennett Jones, which has advised leading U.S. department stores and retail chains on how to successfully integrate into the Canadian market, put together a guide to Canadian market entry that highlighted key considerations for cross-border retailers looking to streamline their efforts.

Cross-Border Retailing: A Guide to Canadian Market Entry addresses a number of different topics, including Canadian retail legislation pertaining to product regulation and consumer safety, ecommerce and mobile commerce, business organization and supply chain logistics.

For instance, with regard to location and leasing, Bennett Jones points out, "U.S. retailers should note that Canadian leases are typically completed in a two-step process: a binding offer to lease (non-binding letters of intent are not commonly used) followed by a formal lease." When it comes to supply chain logistics, the law firm encourages U.S. retailers to consider border and supply chain security laws that have an effect on duty and goods and services tax (GST) liability. Additionally, Partners in Protection is the Canadian equivalent of the U.S. Customs and Border Protection agency's Customs-Trade Partnership Against Terrorism, which expedites border clearance while improving the security of companies' supply chains. The government compliance certification is voluntary, but extremely useful.

With regard to business organization, firms should understand that Canada has a corporate tax rate of approximately 27 percent, as well as the GST. In many provinces, the GST and provincial sales tax have merged to become the Harmonized Sales Tax.

Regulation, regulation, regulation
U.S. retailers that expand into other countries are sometimes surprised by the lack of regulation. This is not the case in Canada, as the country has a robust regulatory system that oversees myriad products—including health and beauty items, electronics, toys, apparel and food—which is not harmonized with U.S. product regulation.