A highly developed mixed economy, Canada continues to be attractive in a number of respects as a part of the world in which to work. Building on a strong recovery from the COVID-19 pandemic, the North American country recorded a gross domestic product (GDP) worth more than $2140 billion USD as of 2023, accounting for over 2% of the global economy.
A given individual may choose to reside and work in Canada for a variety of reasons, including its high standard of living, low cost of living, low crime rate, cultural diversity, and natural beauty – as well as, of course, an abundance of job opportunities.
Many of the most exciting vacancies in Canada are to be found in the food and drink, manufacturing, construction, clean technology, and professional services sectors.
However, as a professional operating in this country, you might have noticed that many of the jobs you are offered in Canada are on a contract basis. In other words, the position for which you would be taken on comes with a clear, upfront statement that you will be in post for a fixed amount of time, such as three months, six months, or a year.
What are the differences between employees and contractors in Canada?
If you do decide to operate as an independent contractor in Canada, you will be an entirely different class of worker to an employee. This will mean you can take advantage of greater flexibility in terms of when and how you work, with greater control over your working hours.
As a Canadian contractor, you will normally be considered self-employed. So, you will be entitled to work for multiple employers or clients simultaneously if you wish, provided that you adhere to the employment terms.
Life as an independent contractor in Canada does, though, entail shouldering a higher level of financial risk throughout the agreement. This is largely because employees receive a regular paycheck, whereas contractors need to submit invoices to their client.
Independent contractors in Canada do not have the right to statutory benefits. To express this another way: as a contractor in the country, you will generally not be protected against termination, and nor can you expect to get paid time off. There is also the burden of the country’s independent contractors needing to handle their own payroll deductions.
Independent contractors vs dependent contractors
Something else that an independent professional considering contracting work in Canada will need to be aware of – as will any organizations that may utilize the talents of such workers – is the distinction between a dependent and independent contractor in Canada.
In Canada, a dependent contractor is a classification effectively constituting a middle ground between employees and independent contractors.
Like independent contractors, dependent contractors are not considered permanent employees and are not entitled to benefits.
However, dependent contractors do tend to have greater job security than independent contractors – for example, a reasonable notice period must be given to them by the employer before the contractor relationship is terminated. If the employer fails to do this, it may be possible for the dependent contractor to pursue legal action.
So, contracting or employment – which would be the most suitable path for you?
The emphasis in answering this question must, of course, be on “you”. Even people who are accustomed to working on a self-employed basis across national borders can vary greatly in their personalities and the extent to which they may favor stability over short-term opportunity.
That short-term opportunity, however, could turn out to be very meaningful; contracting in Canada for a fixed term could be invaluable as an opening to get to know a particular employer.
Yes, you will probably miss out on the benefits that permanent employees of the given organization receive, and you may be regarded as a temporary outsider by colleagues. However, there could also turn out to be a strong mutual fit between you and the employer, providing a potential foundation for a longer-term relationship.
With our expertise in multi-region payroll at Aspirock, we can assist when you secure your next contract, in any of a broad range of locations around the globe. To learn more about how we can assist you in the realization of your ambitions as a worker in Canada or elsewhere, please contact our team today.