Running a company is an adventure, and staying compliant with Canadian labour laws can feel like navigating a sticky maze of maple syrup.
At Online Accountant, we’re here to make sure you don’t get stuck in the intricacies of vacation policies and statutory holidays. This is your one-stop to acquiring full command of employee entitlements with compliance. As a small startup or a developing company, here is what you should do to make your team happy and your company prosperous as you evade all the legal trappings.
Now is the time to explore the complexity of vacation policy and the statutory holidays of Canada and come up with data, regulations and tips that can help your business sparkle.
Your business runs on your employees, and happy employees are like fuel to your business that keeps it roaring. A good vacation policy is not merely a legal formality; it is a morale booster and is crucial to morale, productivity and retention.
A report by the Canadian Centre for Policy Alternatives shows that a company that offers generous leave policies will experience a 25% decrease in turnover (CCPA, 2023). Statutory holidays? Not only are they days off, but they are a legal requirement to do or not do and can win or lose you your compliance game.
Failure to follow such regulations may put you in trouble, such as fines, lawsuits and angry employees. With that said, we should break it down with a plan to keep your business in compliance and your team prepared to take over the world (or at least the next quarterly report).
Each and every province and territory in Canada has its own twist on vacation entitlements, but one thing is common: employees require their time to recharge. Here’s the breakdown of what’s required to develop an easy vacation policy.
Under the Canada Labour Code, federally regulated employees are entitled to:
Don’t let your vacation time go to waste. A 2024 survey by Indeed Canada found that 68% of employees prioritize vacation benefits when choosing an employer (Indeed, 2025). Offering more than the basics would attract top talent.
Vacation pay is the cash employees get for their time off, and it’s non-negotiable. Most provinces require at least 4% of gross wages for the first few years, increasing with seniority. For example:
In Alberta, vacation pay is calculated on total wages, including commissions and statutory holiday pay, but excluding tips (Alberta Employment Standards Code, SA 2000, c. E-9).
In Manitoba, employers can pay vacation pay with every paycheck or as a lump sum before vacation starts (Manitoba Employment Standards Code, C.C.S.M. c. E110).
Fun Fact: In British Columbia, employers must pay vacation pay at least 7 days before the vacation starts, ensuring employees can splurge on that beach getaway without pinching pennies (Employment Standards Act, SBC 1996, c. 113).
What occurs when employees fail to take their vacations? A report released in 2023 indicated that 45 percent of Canadian workers fail to make use of their vacation days because of the work pressure (Timeoff. management, 2023). A clear carryover policy helps. Many companies allow up to 5 unused days to roll over, with a cutoff date like January 31 of the next year.
However, take caution: all provinces except BC (when the employee has less than 5 days of work) require vacation pay to be paid on termination, even when the employee does not use it (Indeed, 2025).
“A vacation policy that balances flexibility with compliance is like a cup of coffee; it keeps everyone energized and happy,” says Peter Johnson, CPA, at Online Accountant.
By offering more than the minimum requirements, your business can become a highly sought-after destination for top talent, setting itself apart as a premier employer in the industry. These days are considered sacred and their observance is legally secured between the 1st of January and the day of Canada.
Nationally, federally regulated businesses recognize 10 statutory holidays, including:
Provinces add their own flair. For example:
British Columbia: 11 statutory holidays, including Family Day and BC Day (Employment Standards Act, SBC 1996, c. 113).
Ontario: 9 statutory holidays, but Remembrance Day isn’t one (Employment Standards Act, 2000, S.O. 2000, c. 41).
Newfoundland and Labrador: 6 statutory holidays, plus unique ones like St. Patrick’s Day (Labour Standards Act, RSNL 1990, c. L-2).
A 2025 report by Citation Canada notes that 82% of BC employees qualify for stat holiday pay after just 30 days of employment (Citation Canada, 2025).
Employees who qualify (typically those employed for 30 days and working their scheduled shifts before and after the holiday) get:
For example, in Ontario, public holiday pay is calculated as regular wages plus vacation pay over the four weeks before the holiday, divided by 20 (Ontario Employment Standards Act, 2000, S.O. 2000, c. 41). If a holiday falls during a vacation, employees get an extra day off or holiday pay!
Substitute days are also a thing. If a holiday lands on a non-working day, employees can get a substitute day off within 3 months (or 12 with agreement) in Ontario (Ontario Employment Standards Act, 2000).
Navigating Canadian labour laws is tricky, but doable with the right moves. Here are some of the things that you should know to stay compliant:
“Compliance isn’t just about avoiding fines; it’s about building trust with your team,” says Jane Doe, HR expert and author of Canadian Workplace Dynamics (Doe, 2021).
At Online Accountant, we’re not just number-crunchers—we’re your partners in making compliance as easy as a Sunday skate. Our bookkeeping, accounting, and advisory services ensure your payroll and HR policies are tighter than a toque in a Canadian winter. We’ll help you:
Developing a vacation policy and getting acquainted with statutory holidays do not need to be like herding moose. With a little knowledge of the laws, competitive benefits, and services of professionals such as an Online Accountant, you will ensure that your employees are satisfied and your business remains compliant. With solid policies in place, your workplace can soar as high as a Canada goose in full flight.
Canada Labour Code, R.S.C., 1985, c. L-2.
Employment Standards Act, SBC 1996, c. 113.
Employment Standards Act, 2000, S.O. 2000, c. 41.
Act Respecting Labour Standards, CQLR c. N-1.1.
Alberta Employment Standards Code, SA 2000, c. E-9.
Manitoba Employment Standards Code, C.C.S.M. c. E110.
Canadian Centre for Policy Alternatives. (2023). Employee Retention and Benefits.
Indeed Canada. (2025). Employee Preferences Survey.
Time off. Management. (2023). Canadian Public Holidays and Vacation Policies.
Citation Canada. (2025). BC Stat Holidays 2025: An Employer’s Guide.
Thirdsail. (2022). A Comprehensive Guide to Vacation and PTO Requirements in Canada.
Doe, J. (2021). Canadian Workplace Dynamics. Toronto: HR Press.
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