Starting a business in Canada is less complicated than most guides make it sound. The federal vs provincial question confuses people, but the answer is usually obvious once you see the tradeoffs. Here is how to start a business in Canada in 2026, in the order things actually need to happen.
Pick Your Business Structure
You have four choices in Canada: sole proprietorship, partnership, corporation, or co-operative. 95% of new small businesses should start as a sole proprietorship. It's the cheapest, simplest, and fastest to set up. Incorporate later when you have real revenue or real liability exposure.
Federal vs Provincial Registration
If you operate in one province, register provincially. It's cheaper and there's less paperwork. Federal incorporation ($200 through Corporations Canada) is only worth it if you plan to operate in multiple provinces or want broader name protection across Canada.
Either way, you'll end up in the Canada Business Registry — the central search tool where anyone can look up a registered business.
Set Up a Business Number and CRA Accounts
Every Canadian business needs a Business Number (BN) from the CRA. From there, you add program accounts depending on what you do:
- GST/HST — required once revenue passes $30,000 in 4 rolling quarters
- Payroll — only if you hire W2-equivalent employees (not contractors)
- Corporate income tax — automatic if you incorporate
- Import/export — only if you move goods across borders
Open a Business Bank Account
Do this before your first invoice. Canadian big banks all offer business chequing; so do newer options like EQ Business and Wise. Bring your registration documents, BN, and ID. Running everything through a dedicated account saves you weeks of sorting at tax time and makes you look like an actual business.
Know What Funding Actually Exists
Canada has real grant programs — BDC, FedDev, CanExport, and the provincial programs layered on top. Most require you to be incorporated, generating revenue, and hiring. Day-one founders almost never qualify. Don't let that be an excuse to delay: the best funding is customer revenue.
Systems for Your First Year
You need accounting (Wave, QuickBooks, or Xero), invoicing, and a way to track leads and follow-ups. A CRM like Threecus covers the client side so your first ten customers don't get lost in an inbox.
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