Lecture 7 Lecture 7 - Session 9- Session 9

Political ContextPolitical Context

Purpose of Lecture Purpose of Lecture

What is government’s role in the Canadian Economy?

How has that role been changing and why?

Government as Guardian Government as Guardian of Societyof Society

Funding Services and ProgramsEstablishing Crown CorporationsRegulating Business – Modifying

Economic BehaviorSafeguarding Canadian Interests

Laws and Regulations Affecting BusinessLaws and Regulations Affecting Business

Consumer Protection

Consumer Protection Product Quality

And OperationsProduct QualityAnd Operations

TaxationTaxation

Human ResourcesHuman

ResourcesMarketingMarketing

Laws and Regulations Affecting BusinessLaws and Regulations Affecting Business

Public LawPublic LawThe law relating to

the relationship between

the individual or business

and the government.

The law relating to

the relationship between

the individual or business

and the government.

Private LawPrivate LawThe law relating to

the relationship between individuals,

businesses, or individuals and businesses.

The law relating to the relationship between

individuals, businesses, or individuals

and businesses.

The Main Sources of Law

Common LawCommon Law

Civil LawCivil Law

Statute LawStatute Law

Administrative Law

Administrative Law

Business LawBusiness Law

Important Laws That Regulate Important Laws That Regulate BusinessBusiness

2. Canadian Human Rights Act2. Canadian Human Rights Act

3. Canadian Labour Code3. Canadian Labour Code

4. Bankruptcy and Insolvency Act4. Bankruptcy and Insolvency Act

6. Taxes: income, property, payroll, sales, excise6. Taxes: income, property, payroll, sales, excise

1. Charter of Rights and Freedom1. Charter of Rights and Freedom

5. Consumer Protection5. Consumer Protection

Establishing Crown CorporationsEstablishing Crown Corporations

To help facilitate the implementation of government policy in safeguarding national interests

To protect industries deemed to be vital to the economy

To provide special services not available by the private sector

To nationalize industries that are considered to be important to the economy

Modifying Economic Behavior Modifying Economic Behavior Regulating the Business SectorRegulating the Business Sector

Imperfect Competitions to respond to consumer demand in needed

markets

Public Interest To protect public interests (i.e. safety, pricing

etc.)

Safeguarding Canadian InterestsSafeguarding Canadian Interests

Focuses on the protection of the Canadian national identity and culture by limiting the extent of foreign ownership

Government as Guardian of the Government as Guardian of the Private Business SectorPrivate Business Sector

GOVERNMENTPROTECTIONOF CANADIAN

BUSINESS

Nurturing youngindustries

Encouragingdirect foreign

investment

Maintainingfavorable

balance of tradeProtecting againstunfair globalcompetition

Maintainingadequate levels of

domesticemployment

Offeringsubsidies to

compete globally

Forms of Government InfluenceForms of Government Influence

Low interest loans Tax breaks Subsidies Tariffs Quotas Restricting legislation Government grants Bailouts

Trend Toward a Reduction of Trend Toward a Reduction of Government Involvement in the Government Involvement in the

Business SectorBusiness Sector

Deregulation Reduction in the number of regulations (laws)

affecting business activities

Privatization Transfer of business activities from the

government to the private sector

Why Privatization & DeregulationWhy Privatization & Deregulation

To encourage increased competition making Canadian industries more competitive, resulting in lower prices and better products

To improve efficacy and innovation in the industry

To increase productivity To gain financial benefits from the sale of

government assets to use in other more needed areas

What are Some of the Challenges of What are Some of the Challenges of Deregulation and PrivatizationDeregulation and Privatization

The risk to consumers of exploitation, as a result of the reduction in laws governing industry

Intense competition in Canadian companies as foreign companies enter Canadian industries

Massive layoffs of public employees as privatized enterprises restructure

Private interests are less likely to serve the public’s interests than a government-owned enterprise

Case Study:Case Study:Buy Canadian BooksBuy Canadian Books

Should the Canadian Government protect the Canadian book industry from foreign competition?

Case StudyCase StudyShould the Canadian Government protect the Canadian book Should the Canadian Government protect the Canadian book

industry from foreign competition?industry from foreign competition?

YES Canadian book industry key element in

maintaining in Canada a distinct culture and identity

Foreign companies are less concerned with promoting Canadian writers

Small Canadian publishing companies find it hard to compete with foreign owned grants

Case StudyCase StudyShould the Canadian Government protect the Canadian book Should the Canadian Government protect the Canadian book

industry from foreign competition?industry from foreign competition?

NO Canadian government is conferring an unfair

advantage on Canadian book industry which invites the United States government to retaliate in other sectors of the economy

Government protection of the domestic industry tends to discourage innovation and excellence among firms, due to the lack of competition

Case StudyCase StudyBuy Canadian BooksBuy Canadian Books

How does the “Buy Canadian Books” campaign and the low value of the Canadian dollar potentially affect the Canadian publishing industry?

Case StudyCase StudyHow does the “Buy Canadian Books” campaign and the low value How does the “Buy Canadian Books” campaign and the low value

of the Canadian dollar potentially of the Canadian dollar potentially affect the Canadian publishing industry?affect the Canadian publishing industry?

Canadian Publishers are at an advantage: Get access to a large American readership

market; Canadian books relatively cheap in U.S.

They are shielded in the domestic market from the larger American publishers; Canadian government protection

U.S. publishers are discouraged to sell in Canada since their revenues would be in Canadian dollars.

Case Video: Common Heights

Episode Three