58398 Canada © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone 978-750-8400; fax 978-750-4470; Internet www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher,The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax 202-522-2422; e-mail pubrights@worldbank.org. Additional copies of Doing Business 2011: Making a Difference for Entrepreneurs, Doing Business 2010: Reforming through Difficult Times, Doing Business 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004:Understanding Regulations may be purchased at www.doingbusiness.org. ISBN: 978-0-8213-7960-8 E-ISBN: 978-0-8213-8630-9 DOI: 10.1596/978-0-8213-7960-8 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank-from 1 to 183 http://www.doingbusiness.org/rankings/ Contents Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 Introduction and a ranking simulation tool and Aggregate Rankings http://www.doingbusiness.org/reforms/ 5 - Year Measure of Historical data Cumulative Change Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Starting a Business Methodology and research Dealing with The methodologies and research papers underlying Doing Business Construction Permits http://www.doingbusiness.org/Methodology/ Registering Property Download reports Access to Doing Business reports as well as subnational and regional Getting Credit reports, reform case studies and customized country and regional profiles Protecting Investors http://www.doingbusiness.org/reports/ Paying Taxes Subnational and regional projects Differences in business regulations at the subnational and regional Trading Across Borders level http://www.doingbusiness.org/subnational-reports/ Enforcing Contracts Law Library Closing a Business Online collection of business laws and regulations relating to business and gender issues Doing Business 2011 http://www.doingbusiness.org/law-library/ Business Reforms http://wbl.worldbank.org/ Local partners More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business's life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy 's proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Canada. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the "good practice" economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good -practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011 : Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website (www.doingbusiness.org). * Except for the Paying Taxes indicator that refers to the period January to December of 2009. Note: 2008-2010 Doing Business data and rankings have been recalculated to reflect changes to the methodology and the addition of new economies (in the case of the rankings). 1 Economy Rankings - Ease of Doing Business Canada is ranked 7 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Canada - Compared to global good practice economy as well as selected economies: Canada's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 7 Starting a Business 3 Dealing with Construction Permits 29 Registering Property 37 Getting Credit 32 Protecting Investors 5 Paying Taxes 10 Trading Across Borders 41 Enforcing Contracts 58 Closing a Business 3 2 Summary of Indicators - Canada Starting a Business Procedures (number) 1 Time (days) 5 Cost (% of income per capita) 0.4 Min. capital (% of income per capita) 0.0 Dealing with Construction Permits Procedures (number) 14 Time (days) 75 Cost (% of income per capita) 101.0 Registering Property Procedures (number) 6 Time (days) 17 Cost (% of property value) 1.8 Getting Credit Strength of legal rights index (0-10) 6 Depth of credit information index (0-6) 6 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 100.0 Protecting Investors Extent of disclosure index (0-10) 8 Extent of director liability index (0-10) 9 Ease of shareholder suits index (0-10) 8 Strength of investor protection index (0-10) 8.3 Paying Taxes Payments (number per year) 8 Time (hours per year) 131 Profit tax (%) 9.8 Labor tax and contributions (%) 12.6 Other taxes (%) 6.9 Total tax rate (% profit) 29.2 Trading Across Borders Documents to export (number) 3 Time to export (days) 7 Cost to export (US$ per container) 1610 Documents to import (number) 4 Time to import (days) 11 Cost to import (US$ per container) 1660 3 Enforcing Contracts Procedures (number) 36 Time (days) 570 Cost (% of claim) 22.3 Closing a Business Recovery rate (cents on the dollar) 91.2 Time (years) 0.8 Cost (% of estate) 4 The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies from Doing Business 2006 to Doing Business 2011. Instead of highlighting which countries currently have the most business friendly environment, this new approach shows the extent to which an economy's regulatory environment for business has changed compared with 5 years ago. This snapshot reflects all cumulative changes in an economy's business regulation as measured by the Doing Business indicators-such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related -party transactions. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business 2011 0.14 0.12 Doing 0.10 business has become easier (DB 0.08 change score) 0.06 0.04 0.02 0.00 France United Ireland Canada New Germany Kingdom Zealand 6 1. Benchmarking Starting a Business Regulations: Canada is ranked 3 overall for Starting a Business. Ranking of Canada in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Canada compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Min. capital (number) income per (% of income Economies capita) per capita) Denmark* 0.0 New Zealand* 1 1 0.0 Selected Economy Canada 1 5 0.4 0.0 Comparator Economies France 5 7 0.9 0.0 Germany 9 15 4.8 0.0 Ireland 4 13 0.4 0.0 New Zealand 1 1 0.4 0.0 United Kingdom 6 13 0.7 0.0 * The following economies are also good practice economies for : Procedures (number): Canada Cost (% of income per capita): Slovenia 8 2. Historical data: Starting a Business in Canada Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 2 3 Procedures (number) 2 1 1 1 Time (days) 3 5 5 5 Cost (% of income per capita) 0.9 0.5 0.4 0.4 Min. capital (% of income per capita) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Starting a Business sub indicators in Canada over the past 4 years: 9 Starting a Business Summary - Canada This table summarizes the procedures and costs associated with setting up a business in Canada. STANDARDIZED COMPANY Legal Form: Private Corporation City: Toronto Registration Requirements: No: Procedure Time to complete Cost to complete 1 File for federal incorporation and provincial registration via Industry 5 CAD 200 Canada's online Electronic Filing Centre 10 Starting a Business Details - Canada Procedure 1 File for federal incorporation and provincial registration via Industry Canada's online Electronic Filing Centre Time to complete: 5 Cost to complete: CAD 200 Comment: The following documents are required to file for federal incorporation and provincial registration: 1. Form 1: Articles of Incorporation 2. Form 2: Initial Registered Office Address and First Board of Directors 3. Provincial registration form. Four incorporation options available: 1. incorporation of a numbered name corporation, eg., 1234567 Canada Inc.; If the company is incorporating under a name, rather than a number, a name search report must be obtained at a cost of CAD 20 (it was CAD 50). The search report and articles must be filed within 90 days of the production of the name search report. 2. incorporation of a corporation with a name pre-approved by Corporations Canada (a NUANS® search in electronic format is required to accompany the submission) ; or 3. incorporation of a corporation where name approval is to be sought (a NUANS® search in electronic format is required to accompany the submission); 4. incorporation of a numbered name corporation that has been pre-reserved. It is a same day service, if you submit the forms online prior to 1PM, the incorporation certificate should be provided on the same day by 5PM. The online incorporation process also allows selection of which Canada Revenue Agency (CRA) accounts are required (such as for corporate income tax or goods and services tax/harmonized sales tax), and if accounts are selected, it also results in automatic generation of the Business Number by the CRA within 5 days of incorporation, and the BN is mailed to the company. 11 12 1. Benchmarking Dealing with Construction Permits Regulations: Canada is ranked 29 overall for Dealing with Construction Permits. Ranking of Canada in Dealing with Construction Permits - Compared to good practice and selected economies: 13 The following table shows Dealing with Construction Permits data for Canada compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) income per Economies capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Canada 14 75 101.0 Comparator Economies France 13 137 23.6 Germany 12 100 61.8 Ireland 11 192 57.8 New Zealand 7 65 35.1 United Kingdom 11 95 70.9 14 2. Historical data: Dealing with Construction Permits in Canada Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 27 29 Procedures (number) 14 14 14 14 Time (days) 75 75 75 75 Cost (% of income per capita) 107.0 103.7 100.7 101.0 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Canada over the past 4 years: 15 Dealing with Construction Permits in Canada The table below summarizes the procedures, time, and costs to build a warehouse in Canada. BUILDING A WAREHOUSE City: Toronto Registration Requirements: No: Procedure Time to complete Cost to complete 1 Obtain site plan approval from the municipal authority 30 days CAD 4,218 2 Obtain building permit 20 days CAD 12,785 3 * Obtain road cut permit 5 days CAD 661 4 Request and receive frame inspection 1 day no charge 5 Request and receive drainage inspection 1 day no charge 6 Request and receive electricity inspection 1 day no charge 7 Request and receive sanitary inspection 1 day no charge 8 Request and receive plumbing inspection 1 day no charge 16 9 * Obtain electric power connection 14 days CAD 20,000 10 * Obtain water and sewer service connections 14 days CAD 7,500 11 * Obtain phone connection 1 day CAD 100 12 Request and receive fire department inspection 3 days no charge 13 Receive final inspection and occupancy permit 1 day no charge 14 Receive foundation work inspection 1 day no charge * Takes place simultaneously with another procedure. 17 Dealing with Construction Permits Details - Canada Procedure 1 Obtain site plan approval from the municipal authority Time to complete: 30 days Cost to complete: CAD 4,218 Agency: Toronto Municipal Authority Comment: A pre-consultation with City Staff (Planning Department) is advised. This step will help save time later on in the process. Several documents are needed in this application, including Site Plans, Floor Plans, Elevations, and SWM Plan . The municipality forwards the site plan to the fire department for approval. On some occasions, a City councillor will get involved in the review of the site plan and community consultation may be requested by the Planner. The process can take anywhere from 1 month to 9 months depending on the complexity of the site plan, political interests, and on how often the applicant needs to revise the plan to meet the City's desired revisions. Once approved, the City often has conditions that need to be met before building permit can be obtained. The cost is: CAD 2,329.58 + CAD 2.36/sq. m over 500 sq.m Procedure 2 Obtain building permit Time to complete: 20 days Cost to complete: CAD 12,785 Agency: Toronto Municipal Authority Comment: The building permit is issued by the City of Toronto. BuildCo must post the building permit on the construction site. In certain cases, the process of reviewing the building permit application can be started by the City before the site plan is approved. However, the building permit will not be issued before the site approval is granted. The building permit and the site plan approval are granted by different municipal departments. The site plan approval entails verifying planning compliance with the city bylaws (for instance, if enough parking spaces are included in the plans). In contrast, the building permit application review analyzes technical issues. For simple cases, obtaining site plan approval and a building permit takes 1 to 3 months. The Ontario Building Code was revised in July 2005. The new building code prescribes the time frame for the authority's building permit review. Permits must be issued within 20 days for large buildings and 30 days for complex buildings (previously, this could take 6­12 months). Standard forms must be used for all authorities. The fee is calculated at CAD 9,83 per sq. m.. Procedure 3 Obtain road cut permit Time to complete: 5 days Cost to complete: CAD 661 Agency: Toronto Municipal Authority Comment: A curb cut permit cannot be requested until Site Plan is approved. Actual cutting of the curb is performed by the City. 18 Procedure 4 Request and receive frame inspection Time to complete: 1 day Cost to complete: no charge Agency: Toronto Municipal Authority Comment: To conduct a frame inspection, building inspectors review projects during key stages of construction. This is required to ensure that the work complies with the building code and approved plans. Inspectors may visit several times, depending on the project; they must be able to see the part of the work under inspection. Inspectors require a minimum of 48 hours notice to book an inspection. Procedure 5 Request and receive drainage inspection Time to complete: 1 day Cost to complete: no charge Agency: Toronto Municipal Authority Comment: Building inspectors review projects during key stages of construction. This is required to ensure that work complies with the building code and approved plans. Inspectors may visit several times, depending on the project; they must be able to see the part of the work under inspection. Inspectors require a minimum of 48 hours notice to book an inspection. Procedure 6 Request and receive electricity inspection Time to complete: 1 day Cost to complete: no charge Agency: Electrical Authority Comment: Building inspectors review projects during key stages of construction. This is required to ensure that work complies with the building code and approved plans. Inspectors may visit several times. Depending on the project; they must be able to see the part of the work under inspection. Inspectors require a minimum of 48 hours notice to book an inspection. Procedure 7 Request and receive sanitary inspection Time to complete: 1 day Cost to complete: no charge Agency: Toronto Municipal Authority Comment: Building inspectors review projects during key stages of construction. This is required to ensure that work complies with the building code and approved plans. Inspectors may visit several times. Depending on the project; they must be able to see the part of the work under inspection. Inspectors require a minimum of 48 hours notice to book an inspection. Procedure 8 Request and receive plumbing inspection Time to complete: 1 day 19 Cost to complete: no charge Agency: Toronto Municipal Authority Comment: Building inspectors review projects during key stages of construction. This is required to ensure that work complies with the building code and approved plans. Inspectors may visit several times. Depending on the project; they must be able to see the part of the work under inspection. Inspectors require a minimum of 48 hours notice to book an inspection. Procedure 9 Obtain electric power connection Time to complete: 14 days Cost to complete: CAD 20,000 Agency: Electricity Company Comment: This procedure will not delay construction because it can be started before obtaining the occupancy permit. Procedure 10 Obtain water and sewer service connections Time to complete: 14 days Cost to complete: CAD 7,500 Agency: Toronto Water: Water Renewal Division Comment: This procedure can only be completed after the site plan approval has been granted. The City has implemented a new process (2008) by which the connection work is carried out by any one of 8 listed contractors. Once the application has been submitted, the City sends out a Request For Quotations (RFQ) from the contractors. The desired contractor is chosen based on the list of quotes and a deposit is collected. Procedure 11 Obtain phone connection Time to complete: 1 day Cost to complete: CAD 100 Agency: Telephone Authority Comment: This procedure will not delay construction because it can be started before obtaining the occupancy permit. Procedure 12 Request and receive fire department inspection Time to complete: 3 days Cost to complete: no charge Agency: Fire department, Toronto Municipal Authority Comment: The fire department inspector conducts this inspection. 20 Procedure 13 Receive final inspection and occupancy permit Time to complete: 1 day Cost to complete: no charge Agency: Toronto Municipal Authority Comment: The building inspector conducts the final inspection. Procedure 14 Receive foundation work inspection Time to complete: 1 day Cost to complete: no charge Agency: Toronto Municipal Authority Comment: Building inspectors review projects during key stages of construction to ensure that work complies with the building code and approved plans. Inspectors may visit several times, depending on the project; they must be able to see the part of the work under inspection. Inspectors require a minimum of 48 hours notice to book an inspection. 21 22 1. Benchmarking Registering Property Regulations: Canada is ranked 37 overall for Registering Property. Ranking of Canada in Registering Property - Compared to good practice and selected economies: 23 The following table shows Registering Property data for Canada compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) property Economies value) New Zealand* 2 Norway* 1 Saudi Arabia 0.0 Selected Economy Canada 6 17 1.8 Comparator Economies France 8 59 6.1 Germany 5 40 5.1 Ireland 5 38 6.3 New Zealand 2 2 0.1 United Kingdom 2 8 4.1 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 24 2. Historical data: Registering Property in Canada Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 33 37 Procedures (number) 6 6 6 6 Time (days) 17 17 17 17 Cost (% of property value) 1.8 1.8 1.8 1.8 3. The following graphs illustrate the Registering Property sub indicators in Canada over the past 4 years: 25 Registering Property in Canada This topic examines the steps, time, and cost involved in registering property in Canada. STANDARDIZED PROPERTY Property Value: 2,241,691.60 City: Toronto Registration Requirements: No: Procedure Time to complete Cost to complete 1 * The purchaser should obtain the opinion of a 14-21 days CAD 5500 qualified appraiser to estimate the value of the (simultaneous with property procedures 2, 3, 4, and 5) 2 * Obtain tax clearance certificate from the Municipality 2 days (simultaneous CAD 50 with procedures 1, 3, 4, and 5) 3 * Obtain a copy of Title Register and relevant 1 day (simultaneous CAD 50 (Title Register) + registered documents and a Certificate regarding with procedures 1, 2, CAD 22 (Writs of Writs of Execution 4, and 5) Execution) 4 * Obtain Status Certificate with respect to selling 1 day (simultaneous CAD 32 corporation with procedures 1, 2, 3, and 5) 5 * Conduct title search (in the absence of title insurance) 5-7 days (simultaneous CAD 2,000 with procedures 1, 2, 3, and 4) 26 6 Registration of the transfer of title 1 day CAD 70.70 (electronic registration) + Land transfer tax according to the following cumulative schedule: Property value (in CAD) Land Transfer Tax Under 55,000 0.5% + From 55,001 to 250,000 1.0% + Over 250,000 1.5% * Takes place simultaneously with another procedure. 27 Registering Property Details - Canada Procedure 1 The purchaser should obtain the opinion of a qualified appraiser to estimate the value of the property Time to complete: 14-21 days (simultaneous with procedures 2, 3, 4, and 5) Cost to complete: CAD 5500 Comment: Procedure 2 Obtain tax clearance certificate from the Municipality Time to complete: 2 days (simultaneous with procedures 1, 3, 4, and 5) Cost to complete: CAD 50 Agency: Municipality Comment: The parties have to show reasonable evidence to the title insurance company that the property is clear of tax obligations. A written tax clearance certificate should be obtained from the Municipality in 1 day for CAD 50. This will need to show the latest tax receipts including the amount of current year taxes and whether all taxes are paid to date. Procedure 3 Obtain a copy of Title Register and relevant registered documents and a Certificate regarding Writs of Execution Time to complete: 1 day (simultaneous with procedures 1, 2, 4, and 5) Cost to complete: CAD 50 (Title Register) + CAD 22 (Writs of Execution) Comment: A copy of Title Register and relevant registered documents are obtained on-line, as are the Certificate regarding Writs of Execution filed against the vendor. Procedure 4 Obtain Status Certificate with respect to selling corporation Time to complete: 1 day (simultaneous with procedures 1, 2, 3, and 5) Cost to complete: CAD 32 Comment: Seller obtains a Status Certificate from the government of province (or the federal government, if applicable). Procedure 5 Conduct title search (in the absence of title insurance) Time to complete: 5-7 days (simultaneous with procedures 1, 2, 3, and 4) Cost to complete: CAD 2,000 Comment: Depending on whether the property is located in a jurisdiction governed by the Land Titles Act or the Registry Act or by electronic registration, in the absence of title insurance a simple title search will cost CAD 2,000 and more difficult searches can cost CAD 10,000 or more. 28 In terms of additional investigations: (a) an environmental report would costs between CAD 1,500 to CAD 3,000; (b) a building inspection would take 10 to 21 days and would cost CAD 2,500 to CAD 10,000; and (c) a zoning review by a planning consultant would take between 1 day and 14 days and would cost between CAD 2,000 and CAD 10,000. Title insurance can be obtained for CAD 0.75 / CAD 1000 of purchase price if the purchase price is CAD 2,000,000 or more and for CAD 0.80 / CAD 1000 of purchase price if the purchase price is less than CAD 2,000,000. Procedure 6 Registration of the transfer of title Time to complete: 1 day Cost to complete: CAD 70.70 (electronic registration) + Land transfer tax according to the following cumulative schedule: Property value (in CAD) Land Transfer Tax Under 55,000 0.5% + From 55,001 to 250,000 1.0% + Over 250,000 1.5% Agency: Purchaser's solicitor or Land registry Comment: After the agreement has been prepared and the transaction closed, the parties' solicitors will complete the registration for transfer of title. There are two systems of registration, depending on location of property. In the electronic registration regime, the transfer is registered electronically by an authorized licensee at the offices of the purchaser's solicitor. The registration takes approximately 30 minutes and the cost of electronic registration is CAD 70.70, for each document, including tax and service fees. Only authorized licensees have access to the electronic registration system for security reasons. Where electronic registration is not available, representatives of the vendor's and purchaser's solicitors meet at the local land registry office to exchange documentation. The purchaser's solicitor will register the transfer document manually. This process may take several hours. The cost of paper or manual registration is CAD 60 for each document. Regardless of the system of registration, the purchaser is responsible for the cost of registering the transfer. The payment of registration fee and the Land Transfer Tax is done electronically too if it is in the electronic regime. Solicitor's fees for their intervention in the whole process are estimated in about CAD 6,000 (CAD 3,500 for the buyer's solicitor and CAD 2,500 for the seller's solicitor). Notification of change of ownership to assessment department and utility companies can be done the same day immediately after closing, in about 30 minutes. 29 30 1. Benchmarking Getting Credit Regulations: Canada is ranked 32 overall for Getting Credit. Ranking of Canada in Getting Credit - Compared to good practice and selected economies: 31 The following table shows Getting Credit data for Canada compared to good practice and comparator economies: Good Practice Strength of Depth of Public Private legal rights credit registry bureau Economies index (0-10) information coverage (% coverage (% index (0-6) of adults) of adults) New Zealand* 100.0 Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Canada 6 6 0.0 100.0 Comparator Economies France 7 4 33.3 0.0 Germany 7 6 1.0 98.4 Ireland 8 5 0.0 100.0 New Zealand 10 5 0.0 100.0 United Kingdom 9 6 0.0 100.0 * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 32 2. Historical data: Getting Credit in Canada Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 30 32 Strength of legal rights index (0-10) 6 6 6 6 Depth of credit information index (0-6) 6 6 6 6 Private bureau coverage (% of adults) 100.0 100.0 100.0 100.0 Public registry coverage (% of adults) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Getting Credit sub indicators in Canada over the past 4 years: 33 Getting Credit in Canada The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Canada. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 6 bureau registry Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative data distributed? Yes No 1 Does the registry distribute credit information from retailers, trade Yes No 1 creditors or utility companies as well as financial institutions? Are more than 2 years of historical credit information distributed? Yes No 1 Is data on all loans below 1% of income per capita distributed? Yes No 1 Is it guaranteed by law that borrowers can inspect their data in the Yes No 1 largest credit registry? Coverage 100.0 0.0 Number of individuals .. 0 Number of firms .. 0 34 Strength of legal rights index (0-10) 6 Can any business use movable assets as collateral while keeping possession of the assets; and any financial Yes institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, Yes without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without Yes requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, Yes proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations Yes and debts can be secured by stating a maximum amount rather than a specific amount between the parties ? Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the No grantor's name of a security right ? Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? No Do secured creditors have absolute priority to their collateral in bankruptcy procedures? No During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? No Does the law authorize parties to agree on out of court enforcement? Yes 35 36 1. Benchmarking Protecting Investors Regulations: Canada is ranked 5 overall for Protecting Investors. Ranking of Canada in Protecting Investors - Compared to good practice and selected economies: 37 The following table shows Protecting Investors data for Canada compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Canada 8.3 Comparator Economies France 5.3 Germany 5.0 Ireland 8.3 New Zealand 9.7 United Kingdom 8.0 38 2. Historical data: Protecting Investors in Canada Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 5 5 Strength of investor protection index (0-10) 8.3 8.3 8.3 8.3 3. The following graph illustrates the Protecting Investors index in Canada compared to best practice and selected Economies: 9.7 8.3 8.3 8.0 5.3 5.0 a d ad y nd ce gd ed an an an om an t a el ni m al C Fr Ir U Ze er in G ew K N Note: The higher the score, the greater the investor protection. 39 Protecting Investors in Canada The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in Canada. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 8 2 What corporate body provides legally sufficient approval for the transaction? 2 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 2 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 2 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 0 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 9 1 Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? 2 Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? 2 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? 1 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? 40 1 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 1 Whether fines and imprisonment can be applied against Mr. James? 1 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 8 4 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 2 Whether the plaintiff can directly question the defendant and witnesses during trial? 1 Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? 0 Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the transaction? 1 Whether the level of proof required for civil suits is lower than that of criminal cases? 0 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit? Strength of investor protection index (0-10) 8.3 41 42 1. Benchmarking Paying Taxes Regulations: Canada is ranked 10 overall for Paying Taxes. Ranking of Canada in Paying Taxes - Compared to good practice and selected economies: 43 The following table shows Paying Taxes data for Canada compared to good practice and comparator economies: Good Practice Payments Time (hours Total tax rate (number per per year) (% profit) Economies year) Maldives* 3 0 Timor-Leste 0.2 Selected Economy Canada 8 131 29.2 Comparator Economies France 7 132 65.8 Germany 16 215 48.2 Ireland 9 76 26.5 New Zealand 8 192 34.3 United Kingdom 8 110 37.3 * The following economies are also good practice economies for : Payments (number per year): Qatar 44 2. Historical data: Paying Taxes in Canada Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 27 10 Total tax rate (% profit) 45.9 45.4 43.6 29.2 Payments (number per year) 9 9 9 8 Time (hours per year) 119 119 119 131 3. The following graphs illustrate the Paying Taxes sub indicators in Canada over the past 4 years: 45 Paying Taxes in Canada The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Canada, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Value added tax (GST) 1 online 50 5.0% value added filing and land sale Provincial capital tax 0 paid jointly 0.2% taxable 0.00 capital in excess of CAD 15 million Provincial sales tax 1 online 8.0% insurance 0.10 filing premium and leasing expenses Fuel tax 1 fuel 0.70 consumption Health tax 1 online 2.0% Payroll in 1.90 filing excess of CAD 400,000 Employment insurance 0 paid jointly 2.4% gross salaries 2.50 contributions (maximum earnings of CAD 42,300) 46 Workplace safety & 1 online 4.3% gross salaries 3.50 insurance contributions filing Provincial income tax 0 online 12.0% taxable 3.80 filing profits Pension plan 1 online 36 5.0% gross salaries 4.70 contributions filing (maximum earnings of CAD 46,300) Federal income tax 1 online 45 11% on 1st taxable 5.90 filing $400k, 19% profits on remaining income Property tax 1 online 4.0% assessed 6.10 filing property value Totals 8 131 29.2 47 48 1. Benchmarking Trading Across Borders Regulations: Canada is ranked 41 overall for Trading Across Borders. Ranking of Canada in Trading Across Borders - Compared to good practice and selected economies: 49 The following table shows Trading Across Borders data for Canada compared to good practice and comparator economies: Good Practice Documents to Time to Cost to Documents to Time to Cost to export export (days) export (US$ import import (days) import (US$ Economies (number) per (number) per container) container) Denmark* 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Canada 3 7 1610 4 11 1660 Comparator Economies France 2 9 1078 2 11 1248 Germany 4 7 872 5 7 937 Ireland 4 7 1109 4 12 1121 New Zealand 7 10 855 5 9 825 United Kingdom 4 7 950 4 6 1045 * The following economies are also good practice economies for : Time to export (days): Estonia 50 2. Historical data: Trading Across Borders in Canada Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 42 41 Cost to export (US$ per container) 1385 1660 1610 1610 Cost to import (US$ per container) 1425 1785 1660 1660 Documents to export (number) 3 3 3 3 Documents to import (number) 4 4 4 4 Time to export (days) 7 7 7 7 Time to import (days) 11 11 11 11 3. The following graphs illustrate the Trading Across Borders sub indicators in Canada over the past 4 years: 51 52 Trading Across Borders in Canada These tables list the procedures necessary to import and export a standardized cargo of goods in Canada. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 3 225 Customs clearance and technical control 1 35 Ports and terminal handling 1 600 Inland transportation and handling 2 750 Totals 7 1610 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 4 185 Customs clearance and technical control 1 75 Ports and terminal handling 2 650 Inland transportation and handling 4 750 Totals 11 1660 53 Documents for Export and Import Export Bill of lading Commercial invoice Customs export declaration Import Bill of lading Certificate of origin Commercial invoice Customs import declaration 54 55 1. Benchmarking Enforcing Contracts Regulations: Canada is ranked 58 overall for Enforcing Contracts. Ranking of Canada in Enforcing Contracts - Compared to good practice and selected economies: 56 The following table shows Enforcing Contracts data for Canada compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) claim) Economies Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Canada 36 570 22.3 Comparator Economies France 29 331 17.4 Germany 30 394 14.4 Ireland 20 515 26.9 New Zealand 30 216 22.4 United Kingdom 28 399 23.4 57 2. Historical data: Enforcing Contracts in Canada Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 58 58 Procedures (number) 36 36 36 36 Time (days) 570 570 570 570 Cost (% of claim) 22.3 22.3 22.3 22.3 3. The following graphs illustrate the Enforcing Contracts sub indicators in Canada over the past 4 years: 58 Enforcing Contracts in Canada This topic looks at the efficiency of contract enforcement in Canada. Nature of Procedure (2010) Indicator Procedures (number) 36 Time (days) 570 Filing and service 30.0 Trial and judgment 390.0 Enforcement of judgment 150.0 Cost (% of claim)* 22.30 Attorney cost (% of claim) 15.0 Court cost (% of claim) 5.3 Enforcement Cost (% of claim) 2.0 59 Court information: Ontario Superior Court of Justice * Claim assumed to be equivalent to 200% of income per capita. 60 61 1. Benchmarking Closing Business Regulations: Canada is ranked 3 overall for Closing a Business. Ranking of Canada in Closing Business - Compared to good practice and selected economies: 62 The following table shows Closing Business data for Canada compared to good practice and comparator economies: Good Practice Recovery rate Time (years) Cost (% of (cents on the estate) Economies dollar) Ireland 0.4 Japan 92.7 Singapore* 1 Selected Economy Canada 91.2 0.8 4 Comparator Economies France 45.2 1.9 9 Germany 53.1 1.2 8 Ireland 87.4 0.4 9 New Zealand 79.1 1.3 4 United Kingdom 88.6 1.0 6 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 63 2. Historical data: Closing Business in Canada Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 4 3 Time (years) 0.8 0.8 0.8 0.8 Cost (% of estate) 4 4 4 4 Recovery rate (cents on the dollar) 88.8 88.7 88.7 91.2 3. The following graphs illustrate the Closing Business sub indicators in Canada over the past 4 years: 64 Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000 reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117 economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and export regulations and improving credit information systems. The top 10 most-improved in Doing Business 2011 Dealing with Construction Trading Across Borders Positive Change Registering Property Enforcing Contracts Protecting Investors Starting a Business Closing a Business Negative Change Getting Credit Paying Taxes Permits Economy Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 65 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Canada Canada harmonized the Ontario and federal tax returns and reduced the corporate and employee tax rates. Canada increased the efficiency of the courts by expanding electronic document submission and streamlining procedures. Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Germany Germany eased business start-up by increasing the efficiency of communications between the notary and the commercial registry and eliminating the need to publish an announcement in a newspaper. Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada's customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary's bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. New Zealand New Zealand enacted new district court rules that make the process for enforcing contracts user friendly. Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank's public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. United Kingdom The United Kingdom improved the process for enforcing contracts by modernizing civil procedures in the commercial court. Amendments to the United Kingdom's insolvency rules streamline bankruptcy procedures, favor the sale of the firm as a whole and improve the calculation of administrators' fees. 66 Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 67 68