Introduction to Administrative Studies
ADMS1000 – Summer 2012 – Eytan Lasry
Lecture 9 – The Political Context – July 10
The Canadian Business Enterprise System
- The Canadian economy is a mixed market system: Essentially capitalist but with
a strong government influence in various sectors of the economy and nearly
complete control of the health care and education sectors.
Government Influence in Canada
- Crown Corporations
- Bailouts and Subsidies
- Recent Trends
Government as Guardian of Society – Taxation
- Collection of revenue taxes (individual, corporation, sales, property)
- Collection of restrictive/ regulatory taxes (excise & customs duties/tariffs) e.g. on
Tobacco, Alcohol etc.
Government as Guardian of Society & Business Owner – Crown Corporations
- CCs ‘natural monopolies’, e.g. Hydro, Gas…
- CCs provide services that private enterprise would not otherwise pursue (Canada
- CCs allow for more government control (OLG, LCBO)
- CC’s implement public policy & safeguard national interests, e.g. CMHC, Bank of
- CC’s protect vital industries,
o e.g. CNR, CBC
- CC’s may be federal or provincial
- Number of CC’s has been decreasing along with the number of employees.
- LCBO – is a successful CC business & a regulatory system on alcohol
The Role of Government in Business – Regulation
- Imposes constraint to modify economic behaviour in the private sector, e.g.
Energy, Health & Safety, Labour, Food, Consumers etc
- Imperfect Competition –intervention ensures appropriate provision of goods &
- Public Interest – protects consumers through regulation, limitations imposed on
business (e.g. foreign ownership, advertising, pricing etc)
Government as Guardian of Private Business / Enterprise - Bailouts – e.g. Chrysler (1980s + 2008), GM & US Banks (2008)
- Subsidies – to prop up business or encourage further development.