Canada is a lucrative country to consider for your startups. Benefits such as government support through grants, attractive tax rates, a pool of competent workers, business-friendly immigration policies, thriving tech scenes, and a prosperous economy across provinces make Canada a better option.
The business-scape and economy of Canada varies from one province to another. While some Provinces are known for their innovative technology in the healthcare sector, others are driving towards revolutionizing the green economy. So, the nature of your business would determine the thriving Province to situate the start-up for better running.
If you have been looking for the best provinces for startups in Canada where you can settle your business, your search is over. This article will provide the information you need to have a head start.
Things to consider before starting a Business in Canada
You must thoroughly research these criteria in some provinces before launching the plan. This would enable you to know what to prepare for as you for success.
Immigration Policy: Though Canada welcomes immigrants with open hands, some Provinces have strict immigration policies. For example, Quebec. Quebec has significant autonomy over its immigration policies, according to the Canada-Quebec Accord.
This agreement allows Quebec to select immigrants who meet its specific economic and social needs. This means that if the start-up’s nature is not in alignment with the province’s needs, it may not be considered.
Access to Services: For example, in the Yukon Territory region, The territory is located in a remote region far away from the major cities and urban centers. As a result, there is limited access to services such as education and healthcare. Also, due to the low population of this territory, there are limited job opportunities, especially for skilled workers.
Language proficiency: Canada is a bilingual country; they speak French and English. Some parts of the country pride themselves on speaking both languages, while others speak English. Some provinces for startups in Canada may require that you are proficient in speaking both, with the Language Proficiency test as evidence that you excelled when tested.
Tax Rate: These provinces have a more favorable tax environment. However, this, too, varies from Province to Province. For example, Quebec is recorded as the province with the highest income tax rates, while Alberta records the least.
Best Provinces for Startups in Canada
It is important to note that your startup’s nature determines the best province to be situated in. Although each province in Canada offers a unique advantage that can help businesses thrive, the nature of the business plays an important role in its setting point of establishment. Read on to find out why.
1. British Columbia
British Columbia is one of Canada’s best provinces for startups, especially in industries such as health and biotech, entertainment and creative sectors, and clean technology startups.
Vancouver, the capital city of British Columbia, is a colorful city, especially at night. It is known for its creative environment and the various incentives it provides for the creative sector. Vancouver shares time zones with major cities such as San Francisco, Seattle, and Los Angeles. This similarity can guarantee strong relations with businesses in the U.S.
Vancouver also has a growing biotech and health tech industry, supported by a vibrant ecosystem of startup communities and top-tier research institutions like the University of British Columbia (UBC), one of the top 40 universities in the world.
It houses over 1,000 tech startups and is home to multiple unicorn companies, including Thinkific, Dapper Labs, and ABCellera.
This ecosystem empowers competition and daily thrive to make businesses, especially startups, grow bigger and better.
More so, British Columbia takes the lead in technological innovation related to environmental sustainability. This offers a supportive policy and a strong market for green innovation.
This supportive policy for green innovation, the competitive ecosystem in the tech space, the presence of top-tier institutes and skilled workforce, and the creative environment for the entertainment sector, not to mention the government support programs for innovation, make British Columbia a province you may want to consider for your start-up, provided its nature aligns with the province’s strengths.
However, sustaining a start-up in British Columbia is expensive compared to other provinces. A small business corporate income tax rate of 2% is required for an active business with an income rate of less than CAD500,000, which moves to 12% as the business grows. Also, businesses in British Columbia are expected to pay a Provincial Sales Tax (PST) and Goods and Services Tax (GST) of 7% and 5% respectively. Coupled with the startup cost, you must be financially buoyant to sustain the business.
However, eligible startups can apply for the Scientific Research and Experimental Development (SR&ED) tax credit. This will help reduce the tax burden and support the start-up to conduct scientific research or experimental development in Canada.
2. Alberta
Alberta is among the best provinces for startups in Canada. It is known to have one of the best economies in Canada, which could be a result of its abundant natural resources in oil, gas, and sand.
Alberta is particularly conducive to cost-conscious ventures because of its Small Business Corporate Income Tax Rate of only 2%, which over 154,495 registered small businesses benefit from. Also, Alberta does not have a Provincial Sales Tax (PST), which presents itself as an added advantage for startups in this province.
Opportunities abound for startups in Agriculture technology, the Energy sector, and Life sciences.
Alberta could be one of the best provinces for your business, as it has a low tax rate, a strong economy, and an active government interest. They provide support for startups through incentives, grants, and other programs.
3. Quebec
Quebec is also one province with a lot to offer startups in Canada. It operates under a strong service-oriented economy, accommodating a highly skilled workforce. Quebec is growing fast to become a startup place for all kinds of businesses, with major expertise in the biotechnology, communication, information, aerospace, and Pharmaceutical industries.
It also has a thriving tech scene and an ecosystem of entrepreneurs supporting competition and innovation. As a result, the province’s unemployment rate has significantly dropped.
Through government support programs in grants and incentives, the Province focuses on Research and Development that drives innovative startups into inclusivity and business growth.
Quebec has a high tax rate. However, this tax rate is being reduced by support from the government. Also, French is the official language of business. So, to base this on, you have to undergo a French proficiency test if you are not a French-speaking individual.
4. Manitoba
Manitoba is considered one of the great places to live and one of the best provinces for startups. This is not far from the truth, as residents enjoy a lower living cost than other Provinces. Manitoba has a GDP per Capita of about CAD51,484. It also has a very low tax rate—almost 0%. This accounts for why it is an attractive place for startups.
It operates a diversified economy that accommodates different skilled workers. It also has an entrepreneurial support system that offers networking opportunities, training, and a community of like-minded individuals.
Related Articles:
5. Ontario
Due to its diversified economy and abundant opportunities, Ontario is also considered one of Canada’s best provinces for startups.
Canada’s largest technology hub boasts a robust tech ecosystem, especially in Toronto. It is also Canada’s largest financial center, providing regulatory support and access to financial expertise.
Its diversified economy allows other sectors, such as manufacturing, industrial retail, and e-commerce startups, to thrive.
Due to its large talent pool and numerous support systems provided by the government and corporate industries, the province has a competitive labor force and an ecosystem of entrepreneurs, bringing about cost-effective operations and developing its work landscape.
However, the provincial Small Business Corporate Income Tax Rate is 3.2% for startups. The government provides support through grants, tax breaks, incubators, and other programs to reduce the tax burden.
Canadian Startup Visa
As an immigrant deciding to begin a business in one of the provinces mentioned, you may want to achieve this by obtaining a startup visa. It is a form of work permit that gives you the advantage of being a permanent resident of the country while you can still go ahead running your business venture.
To be eligible for this Visa, your Canadian business must have been accepted and supported by a designated organization or authorized business incubator in the country.
Conclusion
The wide array of the best provinces for startups in Canada makes it a thriving place for business owners, young entrepreneurs, and organizations to establish the presence of their businesses. So, while you enjoy the benefits of your chosen Province, do not forget to meet its specific needs and demands.
Frequently Asked Questions
The capital depends on several factors, such as the nature of the startup, business model, scalability, etc. However, having tens of thousands to hundreds of Canadian dollars is common.
Both Quebec and Ontario are technology hubs, each with its unique advantage. Quebec is known for its world-leading research institutions like Mila (Montreal Institute for Learning Algorithms), attracting significant investments in AI. Ontario is regarded as the “Silicon Valley North,” the most significant tech hub in North America.
Register your business at the federal and provincial levels of the province in which you are situated.
A minimum of CAD 75,000 is required from a designated Angel Investor Group or a Venture Capital Fund of CAD 200,000 from a designated Canadian venture capital fund.
Due to the quality of living, large talent pool, and numerous support systems in Ontario, most startups are found in this part of Canada, especially in Toronto.
