LICENCES AND PERMITS

Beyond tax registrations, many sole proprietors need one or more licences or permits before they can legally operate. Requirements come from all three levels of government and depend on the activity, the location and how the business is set up, for example whether it runs from home, sells food, employs workers or belongs to a regulated profession. This page explains how to find out what applies, the main types of licences and permits at each level, the rules that affect home-based businesses, and how to keep licences current. Tax and name registrations are covered on their own pages.

FINDING WHAT APPLIES

• BizPaL: a free online service run jointly by federal, provincial, territorial and participating municipal governments. Entering the type of business and its location produces a list of the permits and licences that may be needed, with links to each issuing body.

• Municipal office: the city or town's licensing and zoning departments confirm local requirements, which BizPaL does not always cover in full.

• Industry and professional bodies: associations and regulators publish the licensing rules for their sectors.

• Check before signing a lease: zoning determines whether the business can operate at a location at all, so it should be confirmed before committing to premises.

MUNICIPAL REQUIREMENTS

• Business licences: many municipalities require a licence for specific categories, such as food service, personal services, contractors, transportation and retail, rather than for every business. Some require a licence for all businesses operating within their limits.

• Zoning: the zoning bylaw sets which uses are allowed on each property. A business use in a residential zone is usually allowed only as a home occupation, subject to conditions.

• Building and renovation permits: needed for structural changes, change of use, or new plumbing and electrical work in business premises.

• Sign permits: exterior signs often need a separate permit and must meet size and placement rules.

• Health and fire inspections: food premises and places open to the public are typically inspected before opening and periodically after.

PROVINCIAL REQUIREMENTS

• Regulated trades and activities: provinces license activities such as selling alcohol, motor vehicle sales, real estate, travel services, payday lending, security services and many construction trades. In Ontario, for example, these are handled by bodies such as the AGCO, OMVIC, RECO and TICO.

• Professions: accountants, engineers, lawyers, nurses and other professionals must hold a licence from their provincial regulator before practising, whether or not they are self-employed.

• Health and food: food handler certification and food premises approvals are typically provincial standards enforced locally.

• Environmental approvals: activities involving emissions, waste or hazardous materials may need provincial environmental permits.

• Sales tax and workplace safety: provincial sales tax and workers' compensation registrations are covered on the Compliance page.

FEDERAL REQUIREMENTS

• Most small businesses need none: federal licences apply mainly to specific activities rather than to businesses generally.

• Examples: importing or exporting certain goods, food production and labelling regulated by the Canadian Food Inspection Agency, health products regulated by Health Canada, broadcasting and telecommunications, and transportation across provincial borders.

• Import-export: commercial importing also requires an import-export account with the CRA, set out on the Business Number page.

HOME-BASED BUSINESSES

• Home occupation rules: municipal bylaws commonly limit the share of the home used for business, the number of non-resident employees, customer visits, parking, signage and outdoor storage.

• Prohibited uses: some activities, such as vehicle repair or food production for sale, may not be allowed at home without special approval.

• Leases and condominium rules: a residential lease or condominium declaration may prohibit or restrict business use, separately from municipal zoning.

• Insurance: home insurance policies generally exclude business activities unless a business endorsement or separate policy is added. This is covered on the Insurance and Personal Liability page.

KEEPING LICENCES CURRENT

• Renewals: most licences must be renewed annually or on a fixed cycle, often with a fee and sometimes a new inspection.

• Changes: moving, changing the business activity, or adding employees can require a new or amended licence.

• Display: some licences must be displayed at the place of business or carried by the licensee.

• Deductible costs: licence and permit fees are deductible on line 8760 of Form T2125.

• Consequences of operating without one: fines, orders to close, and the risk that insurance will not respond to a claim.

KEY POINTS

• Start with BizPaL: then confirm with the municipality and any industry regulator.

• Check zoning first: before signing a lease or running a business from home.

• Regulated activities need provincial licences: as do professionals, even when self-employed.

• Track renewals: and update licences when the business changes.

SOURCES

• Government of Canada: BizPaL online business permits and licences.

• Municipal governments: zoning bylaws and business licensing bylaws.

• Canada Revenue Agency: Guide T4002, Line 8760, Business taxes, licences and memberships.