Start a wholesale or distribution business in Canada: register the business and tax accounts, agree supplier terms in writing, set up warehousing and delivery, and sort the import side before the first cross-border order.
Applies in: CA
A wholesale or distribution business buys goods in bulk and resells them to retailers or other businesses. The work is unglamorous and sequential: register the business, set up the tax accounts, agree supplier terms in writing, arrange somewhere to receive and store the goods, and build a delivery routine that gets the right goods to the right customer on time. The margin is made in the buying terms and in stock control, and lost in damaged goods, slow stock, and unpaid invoices. Do the paperwork before the first order, not after the first problem.
Decide first whether the business will be a sole proprietorship, a partnership, or a corporation. A sole proprietor operating under a legal name generally does not need to register a business name; in all other cases the name is registered, usually with the province or territory where the business operates, as a legal corporate name or a trade name. Trade name registration is a provincial and territorial responsibility, and the registry of each jurisdiction where the business plans to operate is the place to register.
Incorporation is a separate step. Incorporating provincially allows the business to operate under a corporate name in that province; incorporating federally allows locations across Canada, with extra-provincial registration required in each province where the business operates. When a business incorporates in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Saskatchewan, Prince Edward Island, or federally, it is automatically assigned a business number and a corporation income tax program account. In the other provinces and territories, the business registers for a business number with the Canada Revenue Agency after incorporating.
Get the business number through Business Registration Online, reached through a Canada Revenue Agency account. The Canada Revenue Agency states that new business number and program account registrations must be done online, that the business number and account details are received instantly after registration, and that the service is available 21 hours a day, seven days a week. A business number is needed to collect GST/HST, to have employees and a payroll account, to import or export goods, to incorporate, and to file corporate income tax, among other dealings with the Agency.
Register for a GST/HST account when the business must, and consider registering voluntarily before then. The Canada Revenue Agency states that a business has to register if both conditions apply: it is not a small supplier, and it makes taxable sales, leases, or other supplies in Canada. A small supplier is a person whose revenue from worldwide taxable supplies was $30,000 or less in a single calendar quarter and over the last four consecutive calendar quarters, with certain exclusions for goodwill, financial services, and capital property.
The timing matters. If the $30,000 threshold is exceeded in a single calendar quarter, the business is no longer a small supplier and must charge GST/HST on the supply that made it exceed the threshold, with an effective date of registration no later than the day of that supply, and must register within 29 days of that effective date. If the threshold is exceeded over four consecutive quarters but not in a single quarter, the business stops being a small supplier at the end of the month following the quarter in which it exceeded the threshold. Voluntary registration before the threshold lets the business claim input tax credits on rent, equipment, and other taxable inputs. Keep every invoice and record from the first sale: GST/HST returns are filed from those records, and the records are also what a supplier or customer dispute turns on.
Check the provincial layer too. In Quebec, Revenu Quebec generally administers the GST/HST alongside the QST. In the Atlantic provinces, Ontario, and the other HST provinces, the harmonized rate applies to taxable supplies; in the remaining provinces the GST applies and a separate provincial sales tax may apply to the goods sold. Confirm the rate for each province the business sells into before quoting prices.
No order goes out on a handshake. The written terms with each supplier should cover:
Ask for samples and references before the first bulk order, and run a small test order first where the supplier allows it. A test order reveals the real lead time, the real damage rate, and the real invoice accuracy, all of which the sales conversation will understate. Record the supplier's business details, the order, the invoice, and the delivery note for every shipment, and reconcile them before paying.
Warehousing is a flow, not a room. Goods arrive, are checked against the order, are put away where they can be found, are picked against customer orders, are packed, and leave. Set that flow up before the first shipment arrives, even if the "warehouse" is a garage: a receiving area, labelled storage, a picking routine, and a packing bench. As volumes grow, the questions become floor loading, racking, forklift access, loading dock height, and vehicle turning space, and a lease signed without checking those costs money twice.
Delivery follows the same logic. Decide whether the business delivers with its own vehicle, uses a courier or freight carrier, or lets customers collect. Price delivery into the customer terms explicitly: free delivery, a flat delivery charge, or freight at cost are all workable, but an unpriced delivery promise eats the margin on small orders. Keep a stock record from the first shipment: what came in, what went out, what was damaged, and what is left. A wholesale business that cannot state its stock position cannot price, cannot promise delivery dates, and cannot spot shrinkage.
Insurance belongs in this step, not later. Liability coverage for the premises and for goods in transit, property coverage for stock and equipment, and coverage for goods held for customers are the baseline, and a leased warehouse will usually require the landlord to be named on the policy. If the business hires staff, workers compensation registration in the province comes with the first hire.
If any supplier is outside Canada, the import mechanics are part of the business setup, not an afterthought. Commercial importers need a nine-digit business number before registering for an import-export program account with the Canada Border Services Agency, and the business registers in the CARM Client Portal. The business number plus the import-export account number together make up the 15-digit number that identifies the importer of record on customs documents.
The importer registers its own business in the CARM portal; a customs broker cannot do that registration on the importer's behalf, although the broker can transact on the importer's behalf once the importer delegates authority in the portal. Consider enrolment in the Release Prior to Payment program and the financial security that goes with it, and keep the books and records for imports in Canada as the Canada Border Services Agency requires. Before ordering, work out the landed cost: the supplier price, freight, insurance, duty, GST/HST, and any brokerage or handling charges, in Canadian dollars. A supplier price that looks cheap before duty and freight is often not cheap landed. The sourcing and import guides linked below walk through supplier vetting and the import steps in detail.
Wholesale selling is account selling. Agree customer terms before the first delivery: price list or quoted price, payment terms, delivery charges, returns, and credit limits. Invoice every order with the information the GST/HST rules require for the invoice value, charge GST/HST where the business is registered, and follow up unpaid invoices on a fixed routine, not when cash gets tight. A credit limit per customer, set before the first order and reviewed as orders grow, is what keeps one customer's failure from becoming the wholesaler's failure.
Reconcile weekly at first: stock in against stock out, invoices issued against cash received, supplier invoices against goods received. The three reconciliations together show whether the business is making money, or merely moving goods. Review supplier terms and customer terms together each quarter: a supplier price rise that is not passed on, or a customer discount that was never agreed, shows up in the reconciliation before it shows up in the bank account, and that is the point of doing it.
No market-size, margin, or earnings figures are stated in this guide, because no official page states one. Warehouse lease rates, freight rates, insurance premiums, and supplier minimum-order figures vary by city, goods, and carrier, and are priced from quotes for the actual business. The Ontario business name registration fee of $60 for five years, which appears on a federal small-business page, was not carried into this guide because this guide covers all of Canada and that figure is Ontario-specific; confirm the fee on the registry page for the province where the business registers.
In practice, yes, as soon as the business deals with the Canada Revenue Agency for taxes or with the Canada Border Services Agency for imports. A business number is a unique nine-digit number the Canada Revenue Agency gives a business to identify it when dealing with the Agency and other government programs. New business number and Canada Revenue Agency program account registrations are made online through Business Registration Online, reached through a Canada Revenue Agency account, and the business number and account details are received instantly after registration. If the business incorporates, it may be assigned a business number automatically by the incorporating authority in several provinces and federally; in other provinces the business registers for one with the Agency.
When it is no longer a small supplier and it makes taxable sales, leases, or other supplies in Canada. A small supplier is a person whose revenue from worldwide taxable supplies was $30,000 or less in a single calendar quarter and over the last four consecutive calendar quarters. Once the $30,000 threshold is exceeded in a single calendar quarter, the business must register and must start charging GST/HST on the supply that made it exceed the threshold, and it has 29 days from the effective date of registration to register. A business may also choose to register voluntarily before the threshold if it makes taxable supplies in Canada, which lets it claim input tax credits on business inputs. In Quebec, Revenu Quebec generally administers the GST/HST as well as the QST.
The price and how it changes, the minimum order quantity, payment terms and late payment, delivery and who pays freight, what happens to damaged, short, or defective shipments, returns and unsold stock, exclusivity or territory if any is promised, and how either side ends the arrangement. A wholesale business lives on the gap between the supplier price and the customer price, so the agreement should also state whether the supplier will sell direct to the same customers, and at what price. Put every term in writing and keep the signed copy with the order records. This guide is process information, not legal advice: have a lawyer review the agreement before signing if the order values are large.
That depends on the goods, the volumes, and the municipal rules for the address. Small, light, non-perishable lines can start from a garage or spare room where zoning and any municipal business rules allow it. Heavy, bulky, perishable, or regulated goods need proper storage, racking, and handling equipment from the start, and food, chemicals, and other regulated products carry their own storage and labelling rules. Before signing a warehouse lease, check the zoning for the exact address, the loading and vehicle access, the ceiling height and floor loading for the racking, and whether the landlord allows the storage class the goods fall into. Price the lease, insurance, and handling labour from quotes for the actual space, not from a national average.
Commercial goods imported into Canada need a nine-digit business number before the business registers for an import-export program account with the Canada Border Services Agency, and the business registers in the CARM Client Portal, which is the system of record for duties and taxes on commercial imports. Importers register their own business in the portal; a customs broker cannot register the importer's business on its behalf, though a broker can transact on the importer's behalf once the importer has delegated authority. The business number plus the import-export account number together identify the importer of record. Duties, taxes, and any other government department requirements depend on the goods, their classification, and their origin, so work out the landed cost before ordering. See the import guide linked below for the step-by-step process.
That is a structure decision with tax and liability consequences, not a step to rush. A sole proprietorship is simpler to set up and the business name is registered provincially where the name differs from the owner's legal name. A corporation is a separate legal entity, and incorporating federally gives name protection across Canada while provincial incorporation protects the name in that province; a federally incorporated business that operates in other provinces must also register extra-provincially there. Many wholesalers incorporate once order values, supplier contracts, or liability exposure grow, because the corporation, not the owner personally, is the party to the contracts. This guide gives no tax or legal advice on which structure suits a particular business; get professional advice before choosing.