Country overview

#13

Canada

Country stats

Rating Points

400

This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.

Crypto Penetration

4.1%

Estimated percentage of crypto users out of the country's total population based on public data.

Legal Entities

1254

Number of crypto companies registered in the country based on regulator data if available or other types of public data.

Regulation Points

220

An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.

Amount of crypto users

1 566 200

Total amount of crypto users out of the country's total population based on public data.

Taxation points

This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.

Market volume points

165.6

A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.

Status of crypto

Legally allowed

General status of cryptocurrency regulation in this jurisdiction.

Crypto payments

Legally allowed

The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.

Security Level

Minor danger

The overall level of security in a given country based on open data.

Crypto Salaries

Legally allowed

The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.

Business Climate

Very Good

Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.

Stablecoin Regulation

Basic

This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.

Bad Factors

This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.

Types of licenses

Crypto-to-crypto

This license type allows VASP to provide legal exchange from one cryptocurrency to another.

Crypto-to-fiat

This type of license regulates the exchange from cryptocurrency to fiat.

Wallet/Custody

This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.

ICO/STO

This indicator describes legal procedures for token sales and security token issuance. This country has a clear regulation framework and licensing procedures for entities that provide this activity.

Cryptofund

This indicator means that investment funds, trusts, and crypto funds can get regulator approval to provide their activity in the country.

Good

Medium

Bad

intro

Сurrently, Canada is known as a relatively welcoming and accessible jurisdiction for crypto entities outside the European Union. Like most other British Commonwealth countries, it has an enhanced crypto regulatory framework.

Security level

According to our rating, Canada has a minor level of danger. The country has 55.2 points (from 100) for safety in Numbeo crime rating (1). The homicide level (2) is 2,1 per 100,000 a year, and the firearm-related death level (3) is 1,94 per 100,000 a year.

Crypto Payments

Crypto payments have been legal since 2014 according to Canada Revenue Agency (CRA) official tax guide (4), when the Senate reviewed the issue of taxation on cryptocurrency. According to Coinfirm (5), cryptocurrencies are legal for barter transactions, although payment of state services in crypto is illegal.

Crypto Salaries

Salaries in crypto are legally allowed in Canada according to FAQ about crypto income (6) from the local tax authority.

“If an employee receives digital currency as payment for salary or wages, the amount (in Canadian dollars) will be included in the employee’s income according to subsection 5(1) of the Income Tax Act”.

Legal

Сanada has a clear crypto regulation framework, which defines most operations and activities with digital assets. The basis for this regulation are local AML/CFT rules. Cryptocurrency businesses have the same record-keeping and verification obligations as the Fiat Money Service Businesses (MSB) - they need to register in Canada’s Financial Intelligence Unit (FINTRAC) and get Money Service Business License. According to law firm SIA PARTNERS (8) crypto exchanges (CTPs) and wallets need to get a Money Services Business (MSB) license in Canada. These basic regulations are in power since 2020.

Full details of MSB and other crypto regulations in Canada may be found in the document “The Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements” (9). This is a joint paper of CSA (Canadian Securities Administrators) and IIROC (Canadian Investment Regulatory Organisation) published in March 2021. According to this document, all crypto entities must register with the Financial Transaction Analysis Centre of Canada (FinTRAC). Leverage and margin trading need IIROC license and approval.

While new licensing requirements weren't implemented Canada was a simple jurisdiction to get crypto license. It’s hard to define the total amount of crypto entities in Canada. However, according to Coincub, there were 1254 entities there.

However, over time, the requirements and practices for regulating crypto transactions in Canada became more complex in 2023-2024. Security regulators of Canadian states and the Federal Security Regulators Organization - CSA joined the crypto regulation agenda. From 2023, some stablecoins may be qualified by CSA as securities, which means that transactions with them require a license from CSA or local securities commissions of Canadian states. Because of this update, many exchanges have stopped operation in the country (Binance, Blockchain.com). In general, part of crypto platforms' activities now fall under CSA regulation and need authorization from this body to operate in the country.

In addition, Canada is improving fintech legislation, because of thay crypto payment providers must obtain a new type of license from the Bank of Canada. It's called RPAA license and its regulated by RPAA act. In Novemver 2024 this license will become necessary.

Indeed, the procedure for obtaining licenses in Canada is quite complex. In the sense that it may require interaction and inspection of the company by several regulators at once:
-AML/CFT (FINTRAC)
-MSB registration
-CSA
-Bank of Canada
-Canadian States' regulators

However, the Canadian market is still attractive and companies, that want to do business within the country, must comply with all legal requirements.

Taxation

Tax name	Index
PIT tax Min	15
PIT tax Max	54.8
Min Individual CGT (for crypto)	22.5
Max Individual CGT tax (for crypto)	27.4
Corporate tax (CIT)	23
Wealth tax Min	0
Wealth tax Max	0
Mining tax

According to our research, the most common crypto taxes in Canada are:

CIT is for business activity (including mining and trading), and CGT is for individuals.

Total PIT (federal+state) - 44.5-54.8%

CGT: 22,25-27,4%

Federal CIT - 15%, provincial CIT - 8-16%

This information is based on the PWC Canada Tax Summary (10), Law review (11), and position of local tax authority (12). You may see the most important quotes from the Canada Revenue Agency below.

Quote

“The CRA generally treats cryptocurrency like a commodity for purposes of the Income Tax Act. Any income from transactions involving cryptocurrency is generally treated as business income or as a capital gain, depending on the circumstances. Similarly, if earnings qualify as business income or as a capital gain, then any losses are treated as business losses or capital losses.

“The income you get from disposing of cryptocurrency may be considered business income or a capital gain. In order to report it correctly, you must first establish what kind of income it is.

Lastly, cryptocurrency mining in the country is taxed as any business according to the CRA position (13).

Links

1)Numbeo crime rating. Statistics

2)Homicide level. The list of countries by UNODC homicide rate.

3) Firearm-related death. Historical list of countries by firearm-related death rate

4 and 12)Guide for cryptocurrency users and tax professionals

5 and 7)Canada Crypto Regulations. PDF-file

6)Virtual Currency

8)Canadian Securities Regulations For Crypto Businesses.

9)“The Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements”

10)PWC Canada Tax Summary

11)The Virtual Currency Regulation Review: Canada

13)Mining cryptocurrency

Last update: November 2024

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intro

Security level

Crypto Payments

Crypto Salaries

Salaries in crypto are legally allowed in Canada according to FAQ about crypto income (6) from the local tax authority.

Legal

Taxation

Tax name	Index
PIT tax Min	15
PIT tax Max	54.8
Min Individual CGT (for crypto)	22.5
Max Individual CGT tax (for crypto)	27.4
Corporate tax (CIT)	23
Wealth tax Min	0
Wealth tax Max	0
Mining tax

According to our research, the most common crypto taxes in Canada are:

CIT is for business activity (including mining and trading), and CGT is for individuals.

Total PIT (federal+state) - 44.5-54.8%

CGT: 22,25-27,4%

Federal CIT - 15%, provincial CIT - 8-16%

This information is based on the PWC Canada Tax Summary (10), Law review (11), and position of local tax authority (12). You may see the most important quotes from the Canada Revenue Agency below.

Quote

“The income you get from disposing of cryptocurrency may be considered business income or a capital gain. In order to report it correctly, you must first establish what kind of income it is.

Lastly, cryptocurrency mining in the country is taxed as any business according to the CRA position (13).

Links

1)Numbeo crime rating. Statistics

2)Homicide level. The list of countries by UNODC homicide rate.

3) Firearm-related death. Historical list of countries by firearm-related death rate

4 and 12)Guide for cryptocurrency users and tax professionals

5 and 7)Canada Crypto Regulations. PDF-file

6)Virtual Currency

8)Canadian Securities Regulations For Crypto Businesses.

9)“The Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements”

10)PWC Canada Tax Summary

11)The Virtual Currency Regulation Review: Canada

13)Mining cryptocurrency

Last update: November 2024