Is Forex Trading Legal In Canada?


Over the years I have met a fair few Canadian forex traders online, which is great to see! When asked though, no traders really seemed sure as to whether forex trading is legal in Canada. In this article, we will explore whether this is the case so you’ll be able to stay on the right side of the law…

Interestingly, and perhaps contrary to popular belief, forex trading is in fact 100% legal for Canadians! The Canadian Competition Bureau have stated that foreign exchange trading does not fall under their jurisdiction. It has historically been Canada’s Department of Finance who looked at the regulation of the Canadian currency market, but this was repealed earlier this year with no changes to traders.

Forex Trading In Canada – The Law

Forex trading is completely legal in Canada and has been for a number of years! There was some confusion when the Department of Finance in CanadaOpens in a new tab.

The Canadian Competition BureauOpens in a new tab.

In fact, this is the same with many countries who have previously stated forex trading was illegal. In reality, it is not possible to make trading on the foreign exchange markets illegal as it would be impossible to monitor every trade that took place around the world! This does not mean that forex trading is unregulated though.

At best, the only thing you might see in certain countries’ legislation is a warning to investors against trading on speculative investments such as forex trading. This means that it is not illegal per se, but you should be wary of making such investments if you do not understand the markets fully. This is usually just there to protect traders from losing capital in aggressive markets, rather than to punish them.

Traders in Canada have access to a range of brokers, both regulated and offshore, and access to large leveragesOpens in a new tab.

Do Forex Traders In Canada Pay Tax?

We are not really able to give tax advice to forex traders , but we are able to give general information about taxation in Canada. We can tell you what the law says, and if you have more specific questions you should consult a tax lawyer or accountant.

What we do know it is currently not illegal for residents of Canada to trade foreign exchange, including forex assets such as cryptocurrencies, so long as it is not considered a form of gambling.

In Canada, the definition of “gaming” includes betting on the outcome or success of an event that has already happened or given a percentage chance to win in advance, and in all cases it deals with a payment in cash or some other kind of property in order to participate in the game.

If you’re unsure as to whether forex trading is classed as gambling, in a legal setting, I’d consider consulting with an accountant. In some countries, gambling instead of investing does hold tax benefits, such as spread bettingOpens in a new tab.

Are Canadian Based Traders Allowed To Trade With Any Forex Broker?

Forex traders in Canada are able to trade with any broker they like, regardless of where they are located. Canada is part of the Financial Action Task ForceOpens in a new tab.

So there you have it! Any trader in Canada can open an account with any international broker, accept trading without fear of prosecution and will have access to a variety of new trading instruments and symbols.

The majority of the traders that I know from Canada are all using offshore brokersOpens in a new tab.

Offshore brokers, also known as “White Label” brokers are typically owned by the larger auto trading companies. Many of these larger auto trading companies were shut-down over the last few years for illegal activity, so you may want to do your own research before choosing an offshore broker to trade with. There are still some offshore brokers here, offering high leverage and low minimum deposits but again, you’ll need to exercise huge amounts of caution.

Can Forex Traders In Canada Trade Any Currency Pairs?

Due to forex being completely legal in Canada, traders are able to use all currency pairs with no restrictions. This ranges from Exotics, Minor and Major pairs like EURUSD and XAUUSD. Commodities are all also allowed, giving a huge amount of possible instruments to choose from.

The most popular forex pairs with Canadian traders are a tie between the EURUSDOpens in a new tab.

In Conclusion – Forex Trading In Canada Is Legal

In summary, forex trading is completely legal for Canadian traders. There are not restrictions on where traders can open an account, what currency pairs they can trade or any other limitations. As long as you are aware of the risks involved when it comes to trading forex and you understand the tax implications, there is no reason why Canadians cannot be successful in their forex trading endeavours.

If you’re a trader from Canada I would like to hear your experience with taxes and regulations when it comes to forex, in the comments below!

Kyle Townsend

I've been trading forex full-time since 2016. Over the last few years I have tried and tested all of the most popular forex brokers after being scammed by an unregulated broker back in 2017. I post my reviews to help others stay away from potentially high risk brokers!

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