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Political Factors.docx

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Wilfrid Laurier University
Roopa Reddy

Political Factors Political-Legal Factors - Laws, regulations - Taxes – hot topic during election, people always want to hear that they are not going up o Businesses – loose profit when taxes are higher o Taxes can be a disincentive for businesses - Trade agreements or conditions – North American Fair Trade Agreement, World Trade Organization o Who wins/who loses from trade agreements -> social impacts – people are paid less when foreign countries import goods - Political System - Political Stability – ties directly to economic stability o Investors move their money to other places because they don’t want to risk losing their money *Government can create incentives, constraints or support/bail out when needed *Affects uncertainty risk and constraints/costs faced by firm How government influences business - Customer – buys products and services - Competitor – Canada Post, CBC - Regulate Business activity o Regulates business activity – CRTC (e.g. you have to have a certain amount of Canadian artists played on the radio, over a certain period of time) o Purpose:  Promotes competition – Competition Act – stop one or 2 big companies from taking over the market – e.g. price cuts  Protects consumers – i.e. Hazardous Products Act (label harmful products within the workplace) Food and Drug Act (can’t sell products with unsafe chemicals within the product)  Achieve social goals – i.e. universal health care, education, unemployment insurance  Protect the environment – Canada Water Act, Fisheries Act -
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