::this post ID is 18034::::in categories of ..Legal Corner....Retail..::

Q&A With Frank Zaid: Legal and regulatory challenges of operating retail businesses

Winemaking retailers are among specially regulated businesses.
Photo courtesy Wine Kitz

Acquiring licences, permits and registrations
Almost every business will need licences, permits and registrations from federal, provincial and/or municipal levels of government. Franchisors in provinces that have enacted franchise legislation (i.e. British Columbia, Alberta, Manitoba, New Brunswick and Prince Edward Island) are required to describe all of these required materials in their disclosure documents.

Whether businesses are franchised or not, owners must first obtain the necessary licences, permits and registrations and then should maintain a ‘reminder system’ to ensure all renewals are processed on a timely basis. The failure to do so can sometimes result in significant fines or even the forced closure of the business that is not in compliance.

It is impossible to list all of the requirements that may affect all types of retail businesses, but the following are some of the most common across Canada:

  • Federal government business number—Obtainable from the Canada Revenue Agency (CRA), this number permits a business to deal with the federal government. It is used for several accounts, including goods and services tax (GST), harmonized sales tax (HST), payroll deductions, import/export duties and corporate income tax.
  • Import permit—A business must obtain an import permit to bring certain types of products into Canada, including textiles and clothing, steel, wheat, barley, certain farm products and firearms. Additionally, specific licences are required from the Canada Food Inspection Agency (CFIA) for cheese and fish imports.
  • Performing rights licence—If any copyright-protected music is either (a) performed in a public setting or
    (b) communicated publicly via telecommunications, then the host business will need the permission of the owners of that copyright. This usually involves purchasing a Society of Composers, Authors and Music Publishers of Canada (SOCAN) licence, which entitles the business to use the musical works contained in SOCAN’s repertoire, whether live or recorded. Similarly, a Re:Sound licence may be required if the business plays recorded music in the background
    and/or for customers on hold on the telephone. This also applies to the use of recorded music for dancing in clubs, bars and restaurants.
  • Natural health products and cosmetics licence—A product licence is required to market and sell natural health products in Canada. If a business manufactures cosmetic products, additional guidelines are enforced to ensure federal safety and quality requirements are met.
  • Electrical product registration—Most electrical products that are sold at retail in Canada must carry the Canadian Standards Association’s (CSA’s) approval and registration.
  • Medical device and drug licences—If a retail business manufactures, imports or sells medical devices or drug products, then it must comply with a variety of regulatory requirements, in addition to obtaining the appropriate licences.
  • New substance notification—Environment and Climate Change Canada must be notified of any intention to introduce new substances—including chemicals, polymers and products of biotechnology—into the Canadian market.

Another area in which there are diverse regulatory requirements is the labelling of retail products. There is federal legislation, for example, that deals with the labelling of products as ‘Made in Canada.’ If a business manufactures, processes or finishes textiles or other fibre-based products and sells them in Canada, then it must register through the Competition Bureau for a CA Identification Number, which can be used instead of the business name and address on all articles for consumers.

Federal legislation also governs labelling requirements for cosmetics and energy-efficient electrical and electronic products.

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