You should register a business if you're making money to protect yourself legally. In the US we have LLCs, Europe has B.V., etc that limit the owner's liability from lawsuits and other BS. I keep it simple and have one LLC for all of my projects. These are generally inexpensive to set up, maybe a few hundred dollars.

Not sure what Canada has as my business is in the US, but any tax accountant or small business lawyer will be able to tell you what to do. There's nothing special about being an "indie hacker" -- you operate a business and make income just as everyone else so you will need to pay tax in Canada while you have tax residency there

Agree with Ben. The only thing I'll add is that if your revenue isn't super consistent, but at least one month will cover your yearly tax & company admin costs, then it will still make sense to do so.

IMO the main reason it would make sense not to is if you aren't yet making any money and your country has some form of sole-proprietor structure available to you (dunno if that's a thing in Canada) where it's more optimal to stick to that for a while.

As the others have mentioned, incorporating is the best if you want to protect your personal assets from lawsuits.

It's obviously too late for this year, so for now you only need to declare this income as business income on your personal income tax return. Remember to deduct your business expenses related to this income.

You don't have to pay EI or CPP on this income. It will be taxes at your marginal tax rate.