Canada - Country Commercial Guide
Trade Financing
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Methods of Payment

Methods of payment in Canada are like those in the U.S. domestic market. Depending on the magnitude of the contract, U.S. manufacturers exporting to Canada generally ship on open account, and do not require letters of credit. Typical terms are 30 to 90 days with a discount of 1% to 2% of the invoice for early payment, usually if paid within 10 days. U.S. firms exporting to retailers (mainly to department stores) tend to offer a higher discount for settlement within 10 days. Normal precautions in dealing with a first-time customer should be exercised, and safeguards instituted wherever possible, until a good relationship has been established with the customer.

The U.S. Commercial Service in Canada offers the International Company Profile (ICP) as a tool to evaluate the creditworthiness of potential customers or partners. For information on the ICP, please contact Commercial Specialist Mehdi Azeriah at

U.S. firms may wish to consider using the U.S. Export-Import Bank’s export credit insurance program. The Export-Import (EXIM) Bank of the United States is the official export credit agency of the United States, and its mission is to assist in financing the export of U.S. goods and services to international markets.

For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.

Banking Systems

The Canadian banking system is well-developed and mature, and, in general, highly conservative and regulated with more stringent rules governing leverage and capital ratios than the United States. Federal agencies have oversight over most of Canada’s financial sector, including loan and trust companies, as well as life insurance providers. Financial companies may also be governed by either federal or provincial regulations. For example, the cooperative credit movement, which includes credit unions and the “caisses populaires” in Québec, are regulated almost exclusively under provincial jurisdiction. The Office of the Superintendent of Financial Institutions Canada (OSFI) is the primary regulator and supervisor of federally regulated deposit-taking institutions, insurance companies, and federally regulated private pension plans. OSFI also regulates and oversees all foreign financial services companies operating in Canada.

The banking system in Canada groups financial institutions into five main categories:

  • Chartered Banks
  • Trust and Loan Companies
  • Cooperative Credit Associations
  • Life Insurance Companies
  • Securities Dealers

There are approximately 36 domestic banks, 18 foreign-bank subsidiaries, 28 full-service foreign bank branches, and four foreign-bank lending branches. Canada’s banking industry contributes 3.6% (or US$55 billion) to Canada’s GDP and employs approximately 280,000 Canadians. Banks account for more than 70% of the total assets of the Canadian financial services sector, with the six largest domestic banks accounting for more than 90% of the banking industry’s assets. The six major domestic banks have a significant presence outside Canada in areas such as the United States, Latin America, the Caribbean, and Asia.

Canada’s banks operate through an extensive network that includes more than 5,820 branches and 18,640 automated banking machines (ABMs) across the country. Canada has one of the highest numbers of ABMs per capita in the world and benefits from very high penetration levels of electronic channels such as debit cards, internet banking, and telephone banking. Nearly 26% of Canadians report that they perform much of their banking transactions using ABMs. Roughly 76% of Canadians report they do most of their banking digitally, using online or mobile banking.

Foreign Exchange Controls

The government of Canada does not restrict the movement of funds into or out of the country and imposes no restrictions on the buying or selling of any foreign currency. Corporations and individuals can operate in foreign funds and arrange payments in any currency they choose.

U.S. Banks & Local Correspondent Banks

Under the United States-Mexico-Canada Agreement, U.S. banks have a right of establishment and a guarantee of national treatment in Canada. All major banks in Canada can do business with U.S. banks, and some have operations in the United States. Major Canadian banks have correspondent accounts with most major U.S. banks.

For additional information, visit the U.S. Department of State Investment Climate Statements.