E-Business Info-Guide

TABLE OF CONTENTS

1. Common Questions
2. Regulations
3. Privacy and Security
4. Taxation
5. Export Rules
6. Consumer Protection
7. Financial Assistance
8. Training/Information
9. Business with government
10. Related Sites

1. Common Questions

What is electronic commerce?
Electronic commerce (e-commerce) is any commercial activity conducted over networks linking electronic devices (mainly computers) including commercial transactions conducted by Internet, telephone and fax, electronic banking and payment systems, trade in digitized goods and services, and electronic purchasing and restocking systems.

The Internet has opened up networking to anyone with a computer and Internet access.

Businesses can now climb on board the Internet, which amounts to a free electronic highway. Once you're hooked up, you can buy, sell, and connect with the people who matter to you: your own employees (in the next office or three thousand kilometres away), your suppliers, your customers, your bank accounts, your credit information services, your sources of market information, and so on.

What is the Internet?
The Internet is a global collection of networks connecting and sharing information through a common set of protocols. It allows computers attached to networks to communicate regardless of manufacturer or brand, architecture, operating system or location.

Not only does the Internet allow open communication, but many forms of communication. Voice, data and video transmissions can be carried over one infrastructure. The Internet was initially used primarily for data transmission, but telephony - voice transmission - and video transmission are growing. Another advantage of the Internet is efficiency of data transfer.

What is the World Wide Web?
Imagine the concept of a universal information database -- data that would not only be accessible to people around the world, but information that would link easily to other pieces of information. This concept is now a reality in the form of the World Wide Web (WWW).

The WWW provides links between documents, over the Internet. The Web exists because of programs which communicate between computers connected to the Internet. Utilizing a Web Browser, anyone with a computer, modem and Internet account can search and retrieve information from millions of Web Servers around the world. Some examples of Web Browsers you may be familiar with are Netscape Navigator and Microsoft Internet Explorer.

What is electronic commerce used for?
Electronic commerce is not limited to certain types of businesses or just technology-related products and services. Companies in every field are doing business online. Networking through electronic commerce can be applied to any facet of a company's operations, including marketing and sales; purchasing and logistics; production; design and engineering. The most effective use of electronic commerce is when several of these functions are combined: information flows from sales to purchasing, to production.

Electronic commerce can be used to:

1. Communicate: E-mail and Internet Access

2. Promote: Businesses are using Web pages to advise clients and potential clients about their business and its value. Web pages keep clients informed about products, services, and developments, and they provide the opportunity to answer client questions. They may also use their Web sites to solicit market research information from clients or guests who visit their site. Other uses include:

• sales -- to sell products, seven days a week, 24 hours per day throughout the globe;
• product awareness -- online marketing and advertising;
• customer service -- customer support and communication;
• economy -- to eliminate some costs of paper transactions and mailing;
• effectiveness -- due to the speed of communication;
• it offers the opportunity to work out of the home;
• to compete globally without setting up offices in other countries;
• because small companies can compete against much larger companies as no one can tell how large or young your company is based on your Internet presence;
• to find information, conduct competitive intelligence, or network with other business owners.

3. Link
Internally - Improve communications within your company using an Intranet.
Intranet: a private network inside a company or organization. Intranets are used to organize internal company operations, such as payroll and inventory.
 
        Externally - Improve communications with suppliers, customers and partners and integrate your business processes using an Extranet.
        Extranet: connecting two or more intranets, allowing communication with business partners, suppliers, distributors or customers

4. Creating New Business Models: Sharing resource with new partners to create virtual global enterprises. The Net has the potential to act as a central nervous system coordinating the business activities of new type of corporate organisms.

• set up an arrangement whereby sales information is shared instantaneously with wholesalers, shippers, manufacturers, designers, and even suppliers of raw material.

If I don't want to sell electronically, why use electronic commerce? What are the benefits?
You can improve customer service by providing new avenues for promotion and distribution, by responding more quickly to orders, and by offering more responsive aftersales service.

You can cut costs and save time by improving the quality of supply chain management, by integrating back-end production and logistics with front-end marketing and sales, and by letting the computer and software do most of the work in controlling inventory.

You can cut costs and save time by improving internal functions, by cutting down on meetings, by sharing information, by eliminating endless trails of paper, and by assuring that internal communications are precise and understood.

How do I hook up my computer to the Internet?
You (the user) sign a contract with an Internet Service Provider (ISP) for a dial-in or dedicated connection to the provider's equipment, which then gives you access to the Internet. The Internet Service Provider (also known as a server) delivers, in effect, the Internet dial tone. Each computer connected to the Internet is assigned an Internet Protocol (IP number), which is its address. They are analogous to telephone numbers.

When looking for an ISP to connect your business to the Internet, consider what different ISPs charge for access time, reliability (e.g. no busy signals or interruptions in connection), speed of data transmission, technical and other services they offer.

It wasn't long ago that your choice was between huge international companies or smaller local companies, or the occasional free community service. Now the telephone and cable companies have jumped into this business, and are often providing faster transmission of data than was previously offered. Ask for advice from somebody you know who is already online, and pick a company that is likely to offer you a decent deal over a long period, because it is inefficient marketing to keep changing your business e-mail addresses.

Is the Internet expensive?
At first, the costs to get on the Internet can seem intimidating, but compared with what you can accomplish in the areas of marketing and retailing on the Internet versus in the traditional commercial world, it is a very cost effective solution. Also, the potential Internet market is exponentially larger than any local market. First you will need a modem equipped computer ($1,000-$5,000) and access to the Internet through an Internet Service Provider ($30-$50 a month). These costs are estimates only, since costs can vary significantly, as computer prices continue to come down, and as new access technologies become accessible and affordable (i.e. cable access).

If you want to set up a Web site for your business, consider hiring a professional to design it for you. The costs can vary significantly whether you want a simple Web site or a very complex Web site. Once you have a site you will want to register the domain (e.g. your-business-name.com), which may cost as much as $140, depending on your choice of the .com or .ca domain extensions, for two years. Registering your domain on the Internet is like registering your company and company name. Information on registering your domain can be found at http://rs.internic.net andhttp://www.cira.ca or from your ISP. There are also maintenance costs to consider to keep the site up to date and running smoothly, which can cost between $20 and $100 a month, depending on the scope of the site.

How can I secure my Web site and transactions on the Internet?
The type of security you will need for your Web site depends on what kind of use it will have. Once you determine use, you can identify the types of threats you will need to protect yourself against. For example, if you will be doing online sales using credit cards, you will need to protect the credit card information from being intercepted, both during the transaction and when it is stored on the server. Similarly, if you have confidential customer information, you will also want to ensure that this information is not accessible. It is useful to note, however, that in many instances, doing online credit card sales can be more secure than in a traditional environment, where much of the credit card fraud is caused by the people involved in the transaction, or by the theft of receipts.

There are a number of security options, from firewall software, to secure servers, to Secure Sockets Layer (SSL), SET and public key infrastructure. Your ISP and/or Web developer should be able to provide you with more information on these solutions, and whether they are right for your site. The most effective and efficient solution for small to mid-size companies may be to use a commerce server provider (CSP). CSPs lease their services to individual retailers for a fraction of the cost of buying a complete e-commerce solution.

What is a digital signature?
A digital signature is a convenient and secure way of signing electronic documents. Digital signatures provide a secure form of transacting electronically. It is virtually impossible to forge or copy a digital signature. When a document is digitally signed, its integrity and authenticity can be verified, as can the identity of the signer. Digital signatures are based on mathematical theory and the use of algorithms. A digital signature is a complicated concept, but its application is relatively simple and straightforward. Your software does all the work, while you (the user) simply selects the signature option in the software. Digital signatures are particularly important if you want make the electronic transaction as binding as possible. Government legislation is currently being amended to provide for the acceptance of digital signatures (and other forms of electronic signatures) and electronic documents as evidence.

2. What regulations apply to the Internet and electronic commerce?
In general, all existing laws that apply to traditional commerce apply equally in an electronic environment (for example, laws governing business incorporation, business name registration, taxation, consumer protection, deceptive advertising, importing/exporting, product safety, product standards, criminal code, inter-provincial trade treaties, intellectual property and liability, etc.). Companies must comply with the law of any jurisdiction where it is deemed to be "carrying on business."

3. Privacy and Security

Is the information I put on this system safe? Can people steal my confidential company information or gain access to my credit card if I use it over the Internet?
Some businesses are waiting to go online until a secure electronic environment is assured. Solutions to privacy and security exist today. Software can be used to encrypt transactions and block unwanted messages. Your ISP and/or Web developer should be able to provide you with information on various software packages, based on your security needs.

Will my private information be at risk?
You can install software to help protect the privacy of your business and your clients. In addition, the federal government is acting to protect personal information. Bill C-6 establishes principles governing the collection, use and disclosure of personal information. In particular, it provides that business must obtain the consent of consumers to use their personal information and gives consumers access to their personal information and to simple and effective redress procedures.

Compliance with the legislation will be overseen by the federal Privacy Commissioner (http://www.privcom.gc.ca). The Commissioner's role will include receiving complaints concerning contravention of the principles, carrying out investigations and audits, and dispute resolution. Unresolved disputes regarding certain matters can be taken to the Federal Court for final resolution. The Commissioner will also have extensive powers to do research and public education which is vital if consumers are to learn how to protect their privacy. Bill C-6 will guarantee the right to privacy for Canadians.

4. Taxation

Do I need to collect GST/HST and PST if I sell things over the Internet to persons outside of my province or in another country?
In general, all existing tax rules apply equally in an electronic environment, and no new taxes have been created specifically for electronic commerce. For specific tax-related questions, please call the Canada Customs and Revenue Agency at 1-800-959-5525, or visit the Web site at http://www.ccra-adrc.gc.ca/ecomm

The Goods and ServicesTax (GST) is a multi-stage tax that applies to most transactions throughout the production and marketing process. Under the Goods and Services Tax (GST), most goods and services sold or provided in Canada are taxable at a rate of seven percent (7 percent).

The Provincial Sales Tax (PST) is a tax based on the retail price of most goods. Businesses that sell taxable goods or provide a taxable service are responsible for collecting tax and remitting it on a regular basis.

5. Export Rules

Do I need an export license if I sell things over the Internet?
The application of export rules is the same in the electronic world. If you currently need an export permit to sell your product overseas, you will need one to sell it over the Internet to people in foreign countries.

The issuance of Export Permits is administered by the Export Controls Division of Department of Foreign Affairs & International Trade. The Division provides assistance to exporters in determining if export permits are required. It also publishes brochures and Notices to Exporters.

For further information, please call (613) 996-2387, or visit the Web site at http://www.dfait-maeci.gc.ca/

6. Consumer Protection

Marketing practices/advertising
Under the Competition Act, it is a criminal offence to engage in certain kinds of misleading advertising and deceptive marketing practices. The Competition Act defines which marketing practices are illegal in Canada. The Act is enforced by the Competition Bureau, and is applicable in an electronic environment.

For further information, please call 1-800-348-5358, or visit the Web site at http://competition.ic.gc.ca

Consumer Protection for Electronic Commerce - A Canadian Framework
Prepared by the Working Group on Electronic Commerce and Consumers

The Principles are intended to provide guidance to business, consumers and governments as they adapt to the use of online transactions. The principles were drafted by a working group of representatives from Canadian businesses, consumer associations and governments, recognizing that a sound framework for consumer protection will promote consumer confidence and facilitate the acceptance and growth of electronic commerce. The working group has agreed to review the principles regularly to ensure their continued relevance in the rapidly changing electronic marketplace.

The Principles call for:

• clear disclosure of a business's identity, the goods and services it offers, and the terms and conditions of sale;
• a transparent transaction confirmation process;
• payment security;
• protection of personal data;
• restriction of unsolicited commercial e-mail (spam);
• a fair balance of liability in the event of transaction problems;
• timely and affordable means of complaint handling and redress;
• effective consumer education.

They are consistent with the core protections available in consumer law governing traditional forms of commerce.

Released with the Principles are tips for consumers on how to shop safely on the Internet and a guide for merchants on applying the Principles to their business practices. All three documents are available on the Industry Canada's Web site at the following address: http://strategis.gc.ca/oca

7. Which programs can help a company finance the development of an e-commerce solution?

techno.net loan - Business Development Bank of Canada (BDC)
To help small and medium-sized businesses take up the challenge of e-commerce and establish a lead position for themselves, BDC created the techno.net loan. This flexible financing option allows entrepreneurs to cover the costs related to implementing a Web presence without delay and without straining current operations.

For more information on BDC, please call 1-888-463-6232, or visit the Web site at http://www.bdc.ca

CANARIE E-business Virtual Clusters Program
CANARIE's E-business Virtual Clusters Program is a shared-cost funding program that will assist businesses, universities, and research institutions in developing, demonstrating, promoting and diffusing advanced innovative E-business applications in a distributed virtual cluster-oriented environment.

For more information visit the Web site at http://canarie.ca/funding/fecomm.html

8. Where can we get training and information on E-Commerce?

Student Connection Program http://www.scp-ebb.com
The Student Connection Program will introduce Canadian businesses to the power of the Internet as a business tool.  Their
E-Commerce First Step Program will help businesses determine what steps need to be taken to implement e-commerce into their business activities

Virtual University for SMEs (VUSME) http://www.vusme.org
VUSME is a joint venture of business organizations and educational institutions promoting an understanding of how Internet technology can be used to start and grow profitable businesses.

Retailing on Internet: A Guide http://strategis.gc.ca/SSG/ir01581e.html
Retailing on the Internet: A Guide is a site with the analytical tool to determine whether your business and the Internet are compatible. It is addressing the issue of Internet opportunities in a comprehensive way that will help Canadian retailers to better understand the development and evolution of online retailing and electronic commerce.

Net Gain - Doing business on the Internet http://strategis.gc.ca/netgain
Net Gain has the information you need to help your business get started on the Internet! This new guide will help you use the Internet to its full advantage. It provides a range of tips, from the basics on what and how to publish to the costs and the latest applications and practices.

Task Force on E-Commerce, Industry Canada http://e-com.ic.gc.ca
The Task Force site will keep you up to date on the latest issues facing businesses using electronic commerce and on the Government of Canada policies.

Electronic Commerce Canada http://www.ecc.ca
Electronic Commerce Canada is a voluntary organization composed of both the public and private sectors. ECC provides a forum for sharing information and discussing ideas and initiatives, as well as providing the opportunity to network. Half-day educational awareness seminars are conducted monthly, from September to June, for those interested in electronic technologies. There is no charge for these seminars. In addition, ECC provides symposiums and trade shows to encourage its membership to utilize electronic commerce technologies and to conform to accepted standards that will increase productivity and improve competitiveness.

9. Using e-commerce to do business with the government

The government is moving towards delivering more of its programs and services electronically. Three examples of such programs are:

Trade-marks http://cipo.gc.ca
Trade-mark registration gives you exclusive rights to words, symbols and designs, or combinations of these, that distinguish your wares or services from those of someone else. Trade-marks can be registered electronically with the Canadian Intellectual Property Office (CIPO).

Federal Business Incorporation http://strategis.gc.ca/corporations
You may now send key documents to the Director via electronic forms provided through the Corporations Directorate's Electronic Filing Centre Web site.

MERX^MC - The Electronic Tendering Service http://www.merx.cebra.com
MERX^MC is an Internet-based electronic tendering system that advertises government contracting opportunities to potential bidders across Canada.

10. Related Sites

Establishing a Presence on the Web http://www.cbsc.org/alberta/web_index.html
This site will give you a basic understanding of some of the potential applications of the Internet for you and your business. This should help you determine whether the Internet represents a good opportunity for your business.

Community Access Program http://cap.ic.gc.ca
This program provides rural and remote communities with affordable public access to the Internet.

Small Business Internet Commerce Solutions http://www.cibc.com/SmallBusiness/InternetCommerce
Entrepreneurs will have a turnkey e-commerce solution that gives them a fast, easy, secure, and cost effective tool to expand their businesses onto the Internet, while having access to on-site technical support from qualified post-secondary students, if required. This e-business package combines the latest technology to enable a small company to create an online storefront, display available goods and services, and accept payment online from major credit cards.

Consumers and Electronic Commerce http://strategis.gc.ca/SSG/ca00622e.html
Office of Consumer Affairs discussion papers, links to other Strategis electronic commerce documents such as case studies.

E-commerce in Service Industries http://strategis.ic.gc.ca/SSG/ss00006e.html?he=y
Practical information on e-commerce in service industries, including associated benefits, company and industry profiles, statistics, and examples of utilizing e-commerce.

Building Trust in the Digital Economy: Authenticationhttp://e-com.ic.gc.ca/english/authen/631e1.html
Discusses the use of cryptographic technologies to establish user's identity.

The Canadian Internet Registration Authority (CIRA) http://www.cira.ca
The CIRA is a not for profit Canadian corporation that has the mandate to set policy for and operate the .ca domain.

Electronic Commerce Guide http://e-comm.internet.com
Offers a broad range of articles and links.

WebReference.com http://www.webreference.com/ecommerce
WebReference.com is about the Web and webmastery. This site offers a broad range of information such as browsing, authoring, HTML, advanced site design, e-commerce resources, E-Commerce Watch which is an ongoing biweekly summary of the most important issues in the area of electronic commerce for Web site developers.

Electronic Commerce and the European Union http://www.ispo.cec.be
A large site with an introductory section on electronic commerce, an issues section and information on the G7 E-Commerce initiative.

Electronic Commerce and the Organization for Economic Cooperation and Development (OECD) http://www.oecd.org/subject/e_commerce
A site providing documentation and background information on electronic commerce initiative in the OECD countries.
 
Protecting Yourself When Buying Online http://www.ftc.gov/bcp/menu-internet.htm
A basic overview of the potential hazards and how to avoid them.

ECnow.com http://www.ecnow.com
ECnow.com is a high-end electronic commerce consulting firm helping companies satisfy customers through electronic commerce & electronic communication.

Canadian Bankers Association http://www.cba.ca/eng/Tools/Brochures/tools_commerce.htm
Accepting payment by credit card usually requires a business bank (merchant) account with financial institutions that deal with each specific card. See your financial institution or the Canadian Bankers Association Web site for information on electronic commerce.

Net Secure http://www.cata.ca/cata/bustools/insurance/netsecure.html
This new insurance program, known as Net Secure, is being offered exclusively to CATAAlliance members. Net Secure provides up to $200 million of insurance protection for e-business exposures on a worldwide basis, an e-business security and insurance audit, and access to a wide range of e-business consulting and crisis management services.

E-commerce & New Media Marketing Canada http://www.ecommerce-research.com
Is a series of one-day E-Commerce and new media marketing conferences offered by IT Awareness Campaign Inc. The conferences highlight how Canadian organizations of all sizes can use e-commerce technology to sell traditional products and services on the Internet.

Electronic Commerce in Canada http://www.e-com.ic.gc.ca/english/60.html
This site is the virtual focal point for information on Canada's Electronic Commerce Strategy, outlining the various initiatives which are helping make Canada a world leader in the adoption and use of electronic commerce.

1999 Snapshot of Canadian Electronic Commerce Technology Suppliers
http://strategis.gc.ca/SSG/it05327e.html?he=y
Suppliers are entering the e-commerce market as established firms migrating their expertise to the Internet platform or as new start-ups bringing innovative talent together to exploit the market opportunity.

Start Your E-Commerce http://www.GoSoloCanada.com
A site for small and new businesses -- information, online help, tools, directories, e-commerce guide and marketing strategy.

eResolution http://www.eresolution.ca
Private company offering online arbitration and mediation services, in particular regarding "domain name" disputes. The company is affliated with the Public Law Research Centre from Université de Montréal. You can contact them at: (514) 861-6737.

SES http://www.sesresearch.com
SES is a full-service market research firm, drawing on a wide range of disciplines including marketing, research, management consulting and business administration.

ZD-Net http://www.zdnet.com/ecommerce
This site includes a comprehensive internet and e-commerce related search engine as well as Business Shopping links, and Year 2000 information.

Forrester Research http://www.forrester.com
Even without a subscription to their research material, this site has a reference library, highlights from their reports and other e-commerce related information.

IBM http://www.ibm.com/e-business
This site has a small business section, with resource information to help small businesses with understanding what it takes to successfully set up shop on the internet, as well as lots of other links to e-commerce related information.

E-business in Atlantic Canada http://ecom.ic.gc.ca/english/44.html
This publication describes what e-business has done for 24 companies in Atlantic Canada, as they tell their own stories about success with electronic commerce.

Additional Information
Clients can consult Internet-business publications and guides, such as "Cyberlaw Canada" or "Small Business Guide to Doing Big Business on the Internet " from the Self-Counsel Press, "Canadian Internet Advantage" from Prentice Hall Canada or "Selling Online - How to Become a Successful E-Commerce Merchant in Canada" by Jim Carroll and Rick Broadhead, published by CDG Books Canada Inc. http://www.rickbroadhead.com

For detailed information on setting-up your Web site, contact your Web developer or your Internet Service Provider.

DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.