A retail business sells products directly to consumers from a location such as a storefront, a mobile kiosk or an online shop.
This guide will give you general information and regulations for operating an independent retail business. For information on buying a franchise, visit the Canadian Franchise Association website or call them at 1-800-665-4232.
When you start a business there are several things to consider before you can sell your product or service. Most businesses in Ontario need to complete a minimum of three basic steps:
Find out what licences and regulations apply to your type of business
Choose a business structure and register or incorporate your business
Determine if you will need to collect and remit HST
Our Starting a business guide will give you more information on these steps and other basic requirements for starting a business in Ontario.
For most businesses, choosing an appropriate location is critical. Your ideal location will depend on your business needs, zoning restrictions and where your customers and competitors are. Taxes, noise and the local business environment are also important factors to consider when reviewing your options.
Contact your local municipality to determine which zoning requirements will apply to your location before you start selling. Visit the Association of Municipalities of Ontario (AMO) website for a listing of municipalities.
If you plan to have an online presence for your business there are specific legal requirements to follow, such as providing secure credit and debit card transactions, charging taxes to customers outside of Ontario and creating contracts at a distance.
Your inventory is made up of the products you have in stock. Managing your inventory accurately will show you which products are in demand and which ones are not selling. Keeping track of what you sell can make it easier to determine which products to stock.
A supplier provides the products you need to run your business. Finding the right suppliers and managing your relationship with them is an important part of running a retail business.
Your retail business may need to follow several different regulations depending on your products and activities, including:
Consumer product labelling (non-food)
There are labelling standards for everyday consumer products (like t-shirts, office supplies and pet food) that you need to know about before you begin selling products.
The Competition Bureau regulates labelling for most “non-food” consumer products. To learn more about the rules for packaging, labelling and advertising your products, contact the Competition Bureau directly or refer to the following link:
Contact the Competition Bureau: 1-800-348-5358 Labelling
The Competition Bureau also publishes individual guides on labelling requirements for certain business activities and consumer products. Refer to the following guides if you need more information on a specific aspect of labelling:
If you are selling textile products such as clothes, carpets or upholstery within Canada, the product must be labelled appropriately.
The label on your products must show the fibre content information in both English and French. The Canadian manufacturer, processor or finisher must be identified either through a CA Identification Number (for Canadian dealers only) or by listing their complete business name and postal address.
For specific textile labelling requirements, visit the Competition Bureau website.
If you manufacture, import, distribute or sell products in Canada, you are responsible for ensuring that they are safe. Health Canada provides information on the regulations for clothing, accessories, hazardous materials, household products and children’s products.
Your local health unit is the main contact for information on food safety and inspections.
Contact your local health authority to arrange an inspection of your business location, equipment and processes and make sure your business is complying with provincial and federal legislation.
The following link provides contact information for local health authorities that inspect food businesses in Ontario.
Ontario Ministry of Agriculture, Food and Agribusiness (OMAFA)
You may have regulations or inspection standards to follow if you produce, transport or manufacture specific food products in Ontario. Regulated products include dairy, eggs, fish, meat, honey and other plant-based products. Contact the Ministry directly to find out what will apply to your business.
Home-based food businesses are allowed to sell low-risk, home-prepared foods and are exempt from certain regulatory requirements, such as specified handwashing stations in food premises, compliance with commercial dishwashing requirements and food handling training certification.
Low-risk food items are generally considered non-hazardous and do not require time and temperature control. Some examples of low-risk foods include:
Most breads and buns (without meat, cream filling, etc.)
Most baked goods (with no custard)
Chocolate, hard candies and brittles
Fudge and toffees
Pickles, jams and preserves
Granola, trail mix, nuts and seeds
Cakes (icing that doesn’t require refrigeration), brownies, muffins and cookies
When your business uses recorded music, you are responsible for getting the right licence(s) for that use. Contact the following organization for more information:
Entandem
Organizations that use music are legally required to get the applicable RE:SOUND and SOCAN licences. Businesses can get both licences through Entandem to ensure that they are using music ethically and legally.
In order to sell tobacco products, you are required to have an Ontario tobacco retail dealer's permit. If you plan on importing tobacco products, you will also need an importer's registration certificate.
Stocking or selling illegal (or contraband) cigarettes that do not have an Ontario tax mark (yellow tear strip) is prohibited. Unauthorized possession of unmarked cigarettes may result in penalties, fines, imprisonment and forfeiture of the product.
There are also other commercial activities in the tobacco sector that require registration with the Ontario Ministry of Finance.
Find out what your responsibilities are for marketing, packaging or displaying tobacco products. You must also follow the regulations that apply to smoking in public places like offices, shops, or bars and restaurants.
The manufacture, sale, labelling and promotion of tobacco products are regulated in Canada. Find out what federal regulations will affect your business if you sell tobacco products.
If you plan on selling lottery products on behalf of the Ontario Lottery and Gaming Corporation (OLG), or selling break-open tickets, you must be registered with the Alcohol and Gaming Commission of Ontario (AGCO).
There are rules and restrictions for using, selling, importing and exporting single-use plastics that may apply to your business. The regulations include common items such as plastic bags, cutlery, straws and various containers.
Refer to Environment and Climate Change Canada’s website for the regulations and guidance on alternative products for your business: Single-use Plastics Prohibition Regulations
You can contact Pro Bono Ontario’s free legal advice hotline to enquire about getting help with your everyday civil legal needs (no family law, immigration or criminal law). The service is generally aimed at those who cannot afford a lawyer.
Note that service is not guaranteed and you will be asked questions as part of the qualifying process, such as the amount of personal income earned by your household, your name, postal code and age range.
Contact Pro Bono Ontario’s Free Legal Advice Hotline: 1-855-255-7256
You can also contact the Law Society of Ontario's Law Society Referral Service if you have legal questions of a business nature. The service may be able to assist you in finding a lawyer or paralegal, based on your needs.
If you sell goods and services in Ontario, you may need a business number to collect and remit the Harmonized Sales Tax (HST). Most businesses that make less than $30,000 in any 12-month period are not required to charge HST; however, you can register voluntarily and claim input tax credits. Speak with the Canada Revenue Agency (CRA) for more information.
