Learning Objectives

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Chapter 4
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Learning Objectives

• Historical Role of Government
• Activities that impact business
• Major crown corporations
• Federal budget and national debt
• Canadas innovation strategy

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Historical Role of Government in the Economy

• Canada has a mixed economy our various levels
  of governments play a large very role in our
  economy
• From the start in 1867 the National Policy was to
  force trade to flow East-West
• Tariffs were used to deter the natural
  North-South flow of goods

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Historical Role of Government in the Economy

• A railroad was built with government assistance
  to achieve national unity!
• Americans have less government involvement in
  their economy more goods and services are
  provided by the private sector. Following the
  terrorist attacks the federal government
  allocated funds to New York City and the
  airlines.

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Systems of Survival - Ethics of Governance

• The Book

• The Author

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Systems of Survival - Ethics of Governance

• The dynamic tension created by two value systems
  results in economic growth.
• The ethics/values of each syndrome (guardian or
  commercial) are necessarily different
• These are two different worlds with different
  rules of operation

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Role of Government Business

• Sway Business
• Suasion
• Coercion
• Taxation
• Purchasing
• Promotion
• Subsidies
• Standards
• Access

• Sway Government
• Investment
• Employment
• Information
• Privatization
• Lobbying
• Contributions
• Litigation

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Jane Jacobs Moral Syndromes

• Commercial
• Shun Force
• Voluntary Agreements
• Be Honest
• Collaborate Easily with Strangers Aliens
• Compete
• Respect Contracts

• Guardian
• Shun Trading
• Exert Prowess
• Be Obedient Disciplined
• Adhere to Tradition
• Respect Hierarchy
• Be Loyal
• Take Vengeance

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Jane Jacobs Moral Syndromes

• Commercial
• Use Initiative Enterprise
• Be Open to Inventiveness Novelty
• Be Efficient
• Promote Comfort Convenience

• Guardian
• Deceive for Sake of Task
• Make Rich Use of Leisure
• Be Ostentatious
• Dispense Largesse
• Be Exclusive
• Show Fortitude

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Jane Jacobs Moral Syndromes

• Commercial
• Dissent for Sake of Task
• Be Industrious
• Be Thrifty
• Be Optimistic

• Guardian
• Be Fatalistic
• Treasure Honour

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Crown Corporations

• Governments own companies - are called Crown
  Corporations
• Examples AECL, CBC, Canada Post, Bank of
  Canada, etc.
• Some provinces use crown corporations to invest
  in the province - Caisse de Dépôt in Quebec is an
  example
• The trend is towards privatization,

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Crown Corporationshttp//www.canada.gc.ca/depts/m
ajor/depind_e.html
Website listing all the crown corporations and
government agencies
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Laws and Regulations

• Nickels text says 4 sources
• Constitution
• Judicial precedents
• Federal and provincial laws
• Federal provincial agencies
• There is also
• Municipal laws and regulations
• Water, Sewage, garbage pick-up
• Snowplowing, streetlights, police, emergency
  services
• Parks, libraries
• Building codes

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Registration, Reporting and Information

• Companies must register Articles of
  Incorporation with the government
• The legal entity (new company) must file tax
  returns and financial statements with the
  government
• Companies must file statistical data with the
  government as requested

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Taxation of Companies

• The federal government relies on income tax and
  other tax revenue to fund its activities
• The provincial governments rely on income tax and
  sales tax for revenue
• Municipal governments rely on property taxes for
  their revenue
• All businesses pay various taxes ( a cost of
  doing business), which are passed on to the
  consumer in the form of higher prices

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Government Spending of Tax Dollars

• Fiscal Policy - how governments collect and spend
  tax dollars
• The federal government is the largest buyer of
  goods and services
• Federal procurement policies can be used to
  influence regional economies and companies
• NAFTA places limits on the federal governments
  ability to use this spending power

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Government Spending of Tax Dollars

• Monetary Policy - how governments manage the
  money supply
• How many dollars floating around for people to
  use
• Too much money around, we get inflation

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Other Government Policies

• Strangely enough, provincial governments put up
  interprovincial trade barriers
• Provincial governments spend billions on health,
  education and services - these funds are directed
  to local companies
• Various governments may cooperate to provide
  loans, grants or support for projects like
  Hibernia
• The federal government has programs to assist
  business in depressed regions

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Other Government Policies

• Transfer payments
• An issue among provinces as to who gets what

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Protecting Canadian Consumers

• Industry Canada regulates food ingredients,
  clothing labels, measurement accuracy of scales
  and fuel pumps
• Business must be aware that this department is
  responsible for product and consumer safety
• There are legal responsibilities placed upon
  business by the federal government by various
  regulations and acts of Parliament

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Other Government Departments Protect Consumers

• CDIC insures all deposits in financial
  institutions up to 60,000
• Provincial Governments regulate the stock
  exchanges in Canada, setting the rules for all
  public companies
• Municipal Governments inspect buildings, set
  zoning regulations, license businesses, tax
  water, charge fees, regulate parking, etc.

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Employment and Immigration

• Two government departments have a large impact on
  business
• The Department of Citizenship and Immigration
• The Department of Human Resources Development

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National Research Council

• Established in 1916
• Employs over 3,000 scientists and technicians
• Responsible for Science and Technology
• Promotes Research and Development
• Helps Canadian industry to innovate and remain
  competitive

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Canadian Farming

• High Risk - dependant upon unreliable weather
  (floods, droughts, etc.)
• Marketing Boards - developed by the government to
  stabilize prices and farm incomes
• The Boards - control supply, imports, pricing,
  inventory and sales of some farm products
• The trend is towards freer competition in this
  sector

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Canadas Innovation Strategy