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Small Business Services.
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Retail business guide
Table of contents
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.
Starting a Business
Choosing a location
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.
Choosing and setting up a location
Contact your local municipality to determine what 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.
Association of Municipalities of Ontario
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.
Selecting your inventory
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.
Selecting your supplier
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.
Finding and managing suppliers
You can also get information about potential suppliers through our secondary market research service.
Contact us or read more online:
Secondary market research service request
Your business may need licences and permits from the federal, provincial and municipal levels of government.
In addition to the information you will find in this guide, you can use the Canada Business Permits and Licences Search, powered by BizPaL, to find licences and regulations that may affect your business. You can also contact us to speak to someone about starting your business.
Permits and licences search
Your retail business may need to follow several different regulations depending on your products and activities, including:
General product labelling
Your product label is an important way of communicating the value of that product to potential customers. You can use labels to sell the benefits of a product, as long as they follow labelling rules and standards.
The rules can be more restrictive for some types of products than for others. You should research the regulations and standards for your product before selling them.
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:
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:
Labelling - packaging consumer products (non-food)
Learn about your responsibilities when packaging and labelling consumer products (including pet food).
Made in Canada
Learn about the rules and regulations for using claims like "Designed in Canada" or "Made in Canada" to promote your products.
"Product of Canada" and "Made in Canada" claims
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 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.
Labelling of upholstered and stuffed articles
Upholstered or stuffed products sold in Ontario must list the material used for filling and meet specific labelling requirements. Your product labels must be securely attached and made of a white durable fabric or synthetic material. You would also need to meet specific labelling requirements when selling these products as second-hand items. Visit the Technical Standards and Safety Authority (TSSA) website and the Health Canada website for more details.
Food safety and labelling
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.
Local public health contacts
You also need to follow safety standards and labelling rules if you produce, service, process or manufacture food.
Canadian Food Inspection Agency (CFIA)
Most businesses that buy, sell, ship, process or manufacture food will have CFIA regulations to follow.
These regulations may require you to:
- Obtain a licence
- Keep records
- Properly label packaged foods
Activities that are regulated include:
- Importing foods for re-sale
- Selling food to the public, retail food sales
- Shipping food products to another province or territory
- Producing, manufacturing or advertising food products
Check with the CFIA to find out which requirements apply to your business.
Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA)
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.
Regulations for the food industry
When your business uses recorded music, you are responsible for obtaining the right licence(s) for that use. The Copyright Board of Canada works with individual copyright collective societies who provide music licensing. Contact the following two organizations for more information.
Society of Composers, Authors and Music Publishers of Canada (SOCAN) Music Licence
SOCAN is a not-for-profit organization that represents the performance rights of music creators and music publishers. They can help you learn about your obligations and obtaining the required licence(s).
Music licence finder for business
Re:Sound Music Licensing Company
Re:Sound is the Canadian not-for-profit organization that represents the performance rights of artists and record companies, and provides the legally required licence(s) for businesses. You can get help determining what licence(s) will be required, what the licensing process will be and how much it will cost.
Tobacco Retail Dealer's Permit
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.
Contact the Ministry of Finance:
Rules for Tobacco Retail Dealers
Tobacco Retail Dealer's Permit (PDF)
Learn about the Ontario Tobacco Tax and who needs to register
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.
Tobacco: Federal Regulations
You should also contact the municipality where the business will be operating for any local licences or permits that you may need.
Association of Municipalities of Ontario
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).
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 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:
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.
Law Society Referral Service
Depending on your location and the type of products or services being offered, federal, provincial and/or municipal business taxes may apply.
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.
Canada Revenue Agency
Government departments and agencies provide financing such as grants, contributions, subsidies and loan guarantees. Find out what type of government financing may be available for your business. Use the program search tool or browse by type of financing.
Government grants and financing
From day-to-day operations to long-term planning, learn how to manage your business efficiently.
If you are interested in finding an association, use our secondary market research service request and have us search for one based on your needs.
Industry specific links
- Retail Council of Canada
- Canadian Federation of Independent Business
- Canadian Federation of Independent Grocers
- Ontario Convenience Stores Association
- Retail Merchants Association of Canada Inc.
You can also find books, magazines and other relevant print material at business service organizations in your community. To locate a Small Business Services (SBS) community partner, contact us at 1-888-576-4444.