How Much it Costs to Start a Small Business in Canada

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So you’re thinking of starting your own business in Canada? You’re not alone. There are a lot of Canadian entrepreneurs out there just like you. And we’ve got some excellent news for you: it doesn’t have to break the bank!

The costs of starting a business in Canada can vary based on the type and size of your business. Many factors contribute to the price, such as where you live or operate, what kind of product or service you offer, locally or on your website, and how many people will work for you.

Let’s take a deeper look at what goes into the costs of launching your business in Canada.

Canadian Startup Cost Estimates

There are six main costs that you’ll need to consider to estimate your startup costs: office space, equipment, and furniture, inventory, legal and registration fees, marketing & promotion (including website development), overhead expenses (utility and building maintenance), and insurance.

Office Space

When it comes to office space, you can expect to pay fees anywhere from $3 /sq. Feet to upwards of $20 /sq. Foot.

If you’re looking to lease a commercial space in Downtown Toronto, you should expense your rent per square foot was around 39.02 Canadian dollars in the third quarter of 2020.

Equipment and furniture in your area may cost $1,500-$2,500.

Inventory and supplies can cost you around $5,000 to $10,000 (this depends on the type of business you plan to start).

Legal prices are relatively easy to estimate – shop around for a good lawyer. The prices can vary from $500 to upwards of $10,000.

Business registration fees

The fees of getting registered differ in each province. For example, in Ontario, the cost of getting registered starts at 134$+ tax. In Alberta, a small business startup fee starts at 113$ + tax.

But it would help if you kept in mind that the cost of getting registered differs from the cost of incorporating your business. The main difference is that incorporation has a higher business startup cost while registration has a lower one.

As for business insurance, there aren’t too many special rules and regulations that you’ll need to be aware of to cover your business assets. So instead, you’ll need to get the basic business insurance provided by most companies for a small monthly premium expense.

It’s also a good idea to have additional insurance to cover the risks of your business, such as business interruption insurance, commercial property insurance, and professional liability insurance.

Need help calculating your startup costs?
Learn how to correctly estimate your startup budget and capital needs – including costs list by industry in my guide here

Provincial Incorporation vs. Federal Incorporation

As discussed earlier, provincial or federal incorporation has higher costs than simply registering a business name.

The reason is that because an incorporated company involves more increased investment, it caters to a large number of people compared to a business operating under a small business license, also known as a Master Business License (MBL).

Read more about Canadian Master Business Licenses here

If you’re a business looking to incorporate in Canada, there are two options:

  • Provincial incorporation
  • Federal incorporation.

Which one should you choose?

It depends on your needs and the size of your company. Canadian provinces offer different types of corporations with varying costs, liability protection, and taxation requirements. Federal incorporation has more stringent reporting requirements but offers greater business name protection than provincial incorporation does. It’s up to you what type is best for your business! 

Federal incorporations, the majority of the time, cost more than provincial incorporations. They also involve a lot of paperwork compared to provincial incorporations. With federal incorporations comes the obligation to comply with each province’s corporate filings in which you are conducting business.

It costs $443.91 for named federal incorporation plus tax and $389.92 plus tax if you want to go with the numbered federal incorporation.

Meanwhile, the business incorporation in Saskatchewan starts near 389$ + tax, and the same incorporation in Alberta can cost you near 472$ (named).

Numbered Provincial incorporation’s cost is slightly higher in all provinces than named incorporation except in Ontario, where you will need to pay around 468$ compared to 518$ of numbered incorporation. If you want a numbered federal incorporation for your business.

But of course, with higher costs associated with incorporation comes better liability protection and more opportunities to expand nationally than if you were applying for small business registration.

Register your Canadian business online here

Sources of Small Business Loans for Canadians

When starting up a business, be sure to have enough working capital to last through the first couple of months. Then, of course, you already know that you’ll need a lot of money for your business startup costs. But where will this funding come from?

Well, if you don’t have financial backing from family or friends, don’t worry. You can still get a small business loan to help you out with your startup costs. Yes, it’s as easy as that!

And these small business loans are for every small/medium-size business, regardless of industry or the owner’s credit score.

There is a lot of capital available these days from online private banking networks. For example, you can receive a business loan from private lending companies. You will also have a better chance of obtaining approval for a one-time business loan than you would with traditional banks.

Let’s take the example of Smartbizloans. Its partner banks have funded $9 billion in SBA, PPP, and term loans. And thankfully, the Canada Small Business Financing Program is there, which lowers lenders’ economic risks by sharing them with the other financial institutions, making it more straightforward for small businesses to get loans.

Not all Canadian businesses need to be registered.

When setting up a sole proprietorship, it’s essential to use your legal name as the name of your business so that no registration of your business is required with your province. And then, you can avoid the costs associated with government applications.

Newfoundland and Labrador don’t even require sole proprietorships or partnerships to register their business names. That’s the reason why Canada was ranked as the 3rd best place to start a business in 2016.

If you are performing work under a contract, it will be essential to register your business name if you want to invoice for your services.

Costs of registering a business in Canada: by Province and Territory

Startup costs are among the most common questions that every entrepreneur asks themselves when planning to launch a business in Canada. The answer is very straightforward as the cost of filling a company in different provinces is readily available on the websites that offer registration services for your businesses.


Let’s take the example of; the subtotal of registering a sole proprietorship in Alberta through is $123.41. This fee includes a 10.27$ tax + agent fees. The same amount applies to 2+ owners partnerships in Alberta.


Similarly, registration in Ontario starts at 134$+tax. Therefore, the subtotal for this MBL can range anywhere from 160$ to 250$.

The add-ons include tax account setups along with .ca or .com domain registrations, all of which raise the cost of getting a license but are very important in the long run when you want to be successful.

British Columbia

Registration in British Columbia starts at 168.98$ for a small business. But, of course, the bigger the company, the more you have to pay.

Every province and territory offers similar services, and registration is required for your new business to operate legally across the country. The cost of getting this license will depend on how much information you choose to include with your application.

Manitoba and Saskatchewan

Manitoba and Saskatchewan have higher registration costs, starting from $203.99 and 225.93$, respectively. However, in these provinces, business ownership doesn’t take much time.

How much does it cost to start up a small business?

Canada is home to many diverse cultures with different needs and wants. You’re an entrepreneur, and you have an excellent idea for a new business. You’ve done your research, and now it’s time to start building the company – but where should you go?

According to, it’s typical for a small business owner to spend $5-10K in startup costs. At the onset, many small businesses often rent commercial space to house their firm. They’ll also need the appropriate equipment and supplies to begin.

Remember that how many startup costs when opening up depends on how big of an operation you want to create out of your business ownership.

If you’re just getting started, your costs will be lower than those with more experience who might have higher overhead rates from things like advertising or additional employees.

How can I start a business with no money in Canada?

So far, we’ve discussed how to start your own business and how much it will cost, but where can you find funding for your new startup?

The best way to find funding for a business is to have a clear plan and be open to all opportunities. You should start by asking friends, family members, or other investors that they know if they would be interested in investing in the company.

If there are no takers on the first round of investment talks, entrepreneurs should consider expanding their search.

Be sure to steal one of my business ideas you can launch for low cost – or even free!

Canadian business and trade industry organizations

There’s more incentive than ever before for Canadian small businesses to expand their customer bases and grow into competitive global market players.

Prime Minister Justin Trudeau recently made his government’s top priority to support Canadian businesses, especially those affected most by the pandemic.

Programs such as CEBA (Canada Emergency Business Account) and BCAP (Business Credit Availability Program) were launched to help businesses with their daily expenses and give them access to funds that will keep them from going under.

List of Canada-based small business associations

Trade Industry Associations of Canada

  • Aluminium Association of Canada
  • Association of Canadian Port Authorities
  • Canada Cleantech Alliance
  • Canadian Association of Forest Owners
  • Canadian Association of Petroleum Producers
  • Canadian Association of Recycling Industries (CARI)
  • Canadian Cattlemen’s Association
  • Canadian Consumer Specialty Products Association
  • Canadian Council of Professional Fish Harvesters
  • Canadian Council for Importers Compliance
  • Canadian Electricity Association
  • Canadian Energy Pipeline Association
  • Canadian Federation of Agriculture
  • Canadian Fuels Association
  • Canadian Independent Petroleum Marketers Association
  • Canadian Manufacturers and Exporters
  • Canadian Maritime Law Association
  • Canadian Nuclear Association
  • Canadian Paints and Coatings Association
  • Canadian Plastics Industry Association
  • Canadian Steel Producers Association
  • Canadian Stewardship Services Alliance 
  • Canadian Trucking Alliance
  • Canadian Vehicle Manufacturers Association
  • Cement Association of Canada
  • Chamber of Shipping
  • Chemistry Industry Association of Canada
  • Cosmetic Alliance Canada
  • Electronics Product Stewardship Canada
  • Explorers and Producers Association of Canada
  • Fertilizer Canada
  • Food Processors of Canada
  • Forest Products Association of Canada
  • Global Automakers of Canada
  • Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI)
  • Industrial Truck Association
  • International Ship-Owners Alliance of Canada
  • Manufacturers of Emission Controls Association
  • Mining Association of Canada
  • National Marine Manufacturers Association Canada
  • The Outdoor Power Equipment Institute
  • PAC Packaging Consortium (formerly Packaging Association of Canada)
  • Pelmorex Corporation
  • Renewable Industries Canada
  • Responsible Distribution Canada
  • Retail Council of Canada
  • Standards Council of Canada
  • Truck and Engine Manufacturers Association
  • WaterPower Canada (formerly Canadian Hydropower Association)

What are the best small business ideas to start in Canada?

There is no one-size-fits-all answer to this question. It depends on your skills, interests, and how much you want to risk. However, there are a few things that you should consider before leaping into entrepreneurship: 

What type of business will allow you to use your current skills? What kind of business do you have experience in or enjoy doing? Will you open a brick-and-mortar location or sell online via your website?

If you’re one of the 5.21 million people who will be shopping online in 2021, how could you turn that into an online business website? Check out my list of the best online businesses to launch

The pandemic and the implementation of isolation has had a massive impact on consumers, with many stores being forced to shut down as people are too scared or sick from infection if they go out in public.

Consumer trends such as e-commerce will become a more significant thing over the next few years, and how can you take advantage of this? Instead of waiting until it’s too late, how about getting started with an e-commerce website now?

Many people give the cold shoulder to set up an online business because they don’t think making money in their sleep is possible. The options for beginning an online business are endless. If you have an offline store, consider expanding it to include eCommerce or create your web-based store!

Or if the former isn’t feasible and you don’t want to give up on your dream of launching a company, sell some stuff online. You can do so from anywhere with internet access these days, thanks to services like Shopify that make creating and maintaining an online storefront easy!

Get inspired with my big list of reseller business ideas here

Business credit cards are ideal for purchases including office supplies, utilities, and inventory. These cards are accepted at millions of locations worldwide and can be used as a general-purpose card, or you can choose to apply it toward your business line of credit, depending on how you want to use the card.

Get more profitable business ideas on my big list of small business ideas here

Tips for Canadian Entrepreneurs

It’s always a good idea to first incorporate or register your business and then expand it later. In this way, your family assets won’t be at risk when your business grows.

First-time business owners need to remain vigilant and protect themselves from fraud. To protect your company’s assets, I recommend setting up bank accounts in your business’ name, registering trademarks for logo use on products, and promoting yourself with an internet presence.

The government recognizes an incorporated company as a legal entity separate from its owners, directors, and officers.

Business management is only done right once business registration is all set. But, unfortunately, Canadian small businesses are plagued by typical troubles like having no financial guidance, no marketing plan, or the wrong promotion plan that hinders business success. All of these are the top reasons why a lot of small businesses fail every year.

Many Canadian small businesses miss out on how their products are accepted in other countries because they aren’t familiar with how things work internationally. Sometimes they aren’t even aware of their business plan.

This ignorance can cause startup businesses to fail as a lack of knowledge. So make sure to read about other cultures, and as a Canadian citizen, you should understand how to enter different markets.

A business plan is usually just a roadmap for how you will grow your company. It is not something that you enforce as a rule, but it is instead used as a set of guidelines to help you meet your specific goals for beginning your business.

Businesses with specialized knowledge or skills can also find more success abroad. For example, hiring young professionals from countries like India and Pakistan saves IT companies many ongoing costs and allows them to focus more on opening a store locally.

Businesses popular with immigrants or tourists can benefit from expanding their services outside of the country. For example: By becoming an online retailer for Chinese products, businesses would have access to more customers, and they may even hold some events in China.

Market research, being aware of the Canadian tax system, and the successful implementation of your business plan is how you start a business in Canada.

Successful entrepreneurs know how to build their brand and how to reach new customers.

Patience is vital, as any good entrepreneur knows how important it is to take your time and think things through before moving forward with your enterprise in Canada or anywhere else in the world.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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