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MGM102H5 (131)

accounting lecture.docx

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Dave Swanston

Lecture: Accounting • ARTICLE: • save-heinzs-plant-in-leamington-ont-from-closing/ • Plant has been operating since early 1900 producing tomato juice • Decision was made to close factory in Canada and US by US legislation • Because Canadian legislation and laws are different than US, the factory was restricted from shutting down • 1) we could either not sell in Canada • 2) Make plant in America also use crushed tomatoes • Because we have this legislation we were able to save some of the jobs • Good example of how the legislation in Canada was able to save the plant • Is legislation that affect these jobs a good thing or bad thing? • The 250 people benefited from this, so it’s a good thing • Increases the quality of the products, so it’s a good thing • Helps shareholders in Canada as they did not lose out as investors of the US plant • We pay more for tomato juice here than in US • It leads to higher costs if people don’t want to produce in ways followed by the Canadian legislature • Labelling has to be different, language has to be different (here you need English and French), • More costly for international markets to produce domestically and then export them • Legislation helps bring jobs together • Problem: because Canadian market is smaller than those of international markets, • Have to look at legislative issues at all government levels • Beer o In US, market for beer is quite large o Consume more beer than Canadian do o Make beer for such a big market in o When free trade opened up, Canada has a legislative environment that made it expensive for Canadians to product beer in Canada. Alcohol has provincial laws o To sell beer in that province, you had to produce beer in that province o We had high costs of production to produce beer, multiple facilities and free trade allowed beer manufacturers like Budweiser producing a lot of beer at lower costs of production. US legislation makes it expensive for Canadians to make beer in Canada o US has a significant cost advant
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