Question 1

Are exclusive distribution agreements legal in Canada?

Accepted Answer

Yes, but they are subject to review under Section 77 of the Competition Act. Exclusive dealing is only prohibited if it is engaged in by a major supplier and is likely to substantially lessen competition in the relevant market.

Question 2

Do I need bilingual product labels for distribution in Canada?

Accepted Answer

Yes. The Consumer Packaging and Labelling Act requires bilingual (English and French) labels on all consumer products sold in Canada, including net quantity in metric units and dealer information.

Question 3

Is GST/HST charged on distributed products in Canada?

Accepted Answer

Yes. Most goods sold in Canada are subject to GST (5%) or HST (13-15% depending on the province). Some provinces also charge PST separately. The agreement should specify which party is responsible for collecting and remitting applicable taxes.

Question 4

How much notice is required to terminate a distribution agreement in Canada?

Accepted Answer

Canadian common law requires reasonable notice for termination. What is considered reasonable depends on the length of the relationship, the distributor's investment, and industry custom. Courts have awarded notice periods ranging from several months to over two years.

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