Articles of Incorporation Quebec Canada

							Chapter 4

    The Role of
    Government in
    Business
         Learning Objectives

1.   Historical Role of Government
2.   Activities that impact business
3.   Major crown corporations
4.   Federal budget and national debt
5.   Canada’s innovation strategy
           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
           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.
        Systems of Survival -
        Ethics of Governance

   The Book            The Author
        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
Role of Government & Business
   Sway Business      Sway
   Suasion             Government
   Coercion           Investment
   Taxation           Employment
   Purchasing         Information
   Promotion          Privatization
   Subsidies          Lobbying
   Standards          Contributions
   Access             Litigation
                Jane Jacobs
              Moral Syndromes
   Commercial                   Guardian
   Shun Force                   Shun Trading
   Voluntary Agreements         Exert Prowess
   Be Honest                    Be Obedient &
   Collaborate Easily with       Disciplined
    Strangers & Aliens           Adhere to Tradition
   Compete                      Respect Hierarchy
   Respect Contracts            Be Loyal
                                 Take Vengeance
               Jane Jacobs
             Moral Syndromes
   Commercial             Guardian
   Use Initiative &       Deceive for Sake of
    Enterprise              Task
   Be Open to             Make Rich Use of
    Inventiveness &         Leisure
    Novelty                Be Ostentatious
   Be Efficient           Dispense Largesse
   Promote Comfort &      Be Exclusive
    Convenience
                           Show Fortitude
                Jane Jacobs
              Moral Syndromes
   Commercial               Guardian
   Dissent for Sake of      Be Fatalistic
    Task                     Treasure Honour
   Be Industrious
   Be Thrifty
   Be Optimistic
              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,
       Crown Corporations
http://www.canada.gc.ca/depts/major/depind_e.html



                                           Website
                                           listing all the
                                           crown
                                           corporations
                                           and
                                           government
                                           agencies
                Laws and Regulations

Nickels text says 4 sources
1.   Constitution
2.   Judicial precedents
3.   Federal and provincial laws
4.   Federal & provincial agencies
There is also
5.   Municipal laws and regulations
     •   Water, Sewage, garbage pick-up
     •   Snowplowing, streetlights, police, emergency services
     •   Parks, libraries
     •   Building codes
       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
          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
        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
    government’s ability to use this
    spending power
        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
         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
         Other Government Policies
   Transfer payments
   An issue among provinces as to who
    gets what
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
    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.
        Employment and Immigration

   Two government
    departments have a large
    impact on business:

       The Department of Citizenship
        and Immigration
       The Department of Human
        Resources Development
        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
            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
Canada’s Innovation Strategy