MGT100H1 Lecture Notes - Lecture 3: World Trade Organization, Trade Restriction, General Agreement On Tariffs And Trade
The Canadian Business Environment
The Canadian Business Environment
● Canada is a social democracy, with a monarch as head of state
○ Government general signs bills into law under representation of the queen
○ Having a monarch is a separation of the people and the state, she’ll never
meddle in our lives
● Our economy is widely recognized as a mixed market economy
○ Do believe in free enterprise , no government regulation, able to negotiate prices,
etc, mixed comes from ownership of some businesses by government. Ex:
LCBO, telephone system, etc.
○ Part of the reason why canadians believe in some government ownership is the
vast amount of land and small amount of people
● In canada, capitalism is not “unbridled”
○ Public (government) ownership as well as private
○ Adam smith’s (1776) “invisible hand” is at work
■ Separated natural and market prices
○ Competition is not pure; many oligopolies
Wealth creation in canada
● Wealth - an abundance of material possessions and resources; property that has
economic utility
● Today, canada’s wealth is derived mostly from trade (and mostly with U.S.)
○ Largest trade relationship in the world
● Why do we (and other nations) trade?
○ If one nation gets really good at sometime and another nation gets really good at
something, they can trade that something and both nations will get wealthier
○ Standard of living increases
The Diamond of Sustainable Growth
● Sophisticated managerial capabilities
○ Need to get stuff done, plan, organize, set up businesses, transportation
systems, educational systems, etc.
● Vibrant entrepreneurship
○ Need people to take financial risks to start businesses, comes from alone in the
wilderness and having to do stuff yourself to survive
● Effective financial systems
○ Great banking, wealth management's, great financial trusts, insurance, etc. got
watchdogs in government to keep track of insurance companies, strong rules
around what the banks are allowed to do and not to do so they don’t over extend
● Enabling political systems
○ Political systems have to support economic activity but also regulate it so it’s not
unbridled (run away)
● Middle: resource endowments: natural, technological, human
find more resources at oneclass.com
find more resources at oneclass.com
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MGT100H1 Full Course Notes
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