Major Systematic Barrier to upgrading the CDN Economy.docx

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Administrative Studies
ADMS 1010
Barry O' Brien

Major Systematic Barrier to upgrading the CDN Economy Firm Strategy, Structure and Rivalry  Labor mgmt. relationship are often counter-productive  Many firms continue to maintain their insular focus  Intense local rivalry is absent in many industries  Macro-Economic environment blunts investments  Company strategies often fail to upgrade the home diamond Factor Condition  Canada’s workforce is not well-equipped for upgrading and change  R&D infrastructure is not aligned with requirements for upgrading  Physical infrastructure contains efficiency, especially in transportation Related & Supporting Industries  Weak related and supporting industries and inadequate cluster development constrain innovation and new business formation Demand Conditions  Canada buyer behavior often work against upgrading  STD & Regulations have not provided strong impetus for industry upgrading innovation Manufacturing in Canada  4 developments in trade policies and practices in this period affected, Canadian manufacturers substantially the Canada US auto pact, the GATT the world competitive environment, particularly the emergence of lesser developed countries and the bilateral free trade agreement with the US reached in late 1987 and its expansion in the late 1990s to include Mexico.  With free trade, the volume of manufactured goods imported into Canada has increased, Canada’s degree of trade exposure is high by international standards  Ontario and Quebec dominate the manufacturing sector in Canada though the western provinces are increasing particularly in the area of extracting technology.  With confederation in 1867 came, geographic expansion, construction of the Canadian Pacific Railway and new settlement bringing population increases, skills and capital  8 years later Sir John A. MacDonald’s national policy established protective tariffs to encourage domestic processing of CDN material Impact of Canadian $ on retail Canada have always enjoyed cross border shopping  Prices in CDA are often higher than those in the US due in part to such differences as tax structures or the economy of scale enjoyed by retailers in the larger US market  CDN consumers get even better deals when our dollar is high  A higher dollar also makes travel to the US cheaper proposition for CDNs  All around the strength of the CDN $ determines the purchasing power of CDNs  The fluctuating $ can affect prices at home but often there is a lag time as inventory was purchased when $ was at a different value Future impact of globalization on CDN retail  Globalization will continue to introduce new retailers to Canada  The internet will further erode Canadian Bricks and mortar stores POSSIBLE EXAM QUESTIONS How come Canada is not that competitive in the retail industry? Almost nothing for Canadian retail store How does the gov’t intervene in Canada? 1. Legislation 2. State provision of goods and services In Canada this will be done through Crown Corporations 3. Physical policy by tax and subsidies Why  free market economy  the market forces determine the allocation of resources based on the decisions of consumers and business. Gov’t can intervene to correct what they perceive to be an inefficient allocation of resources (known as market failure). Main reason for intervention: 1. To correct market failure  when free market no longer allocate goods and services efficiently, it is called a market failure 2. To redistribute wealth 3. To improve economic performance (the gov’t intervene to tor impact to how these goods and services are allocated unfortunately the gov’t is not the most efficient at allocating g&s either Argument for Protectionism  Ind. fearful of foreign comp.  Those intended to inference the composition of production  Those intended to inference the distribution of income National Defense argument  Seek to avoid dependence on foreign sources for supplies (such as minerals) of essential materials. or finish products that might be denied in times of war. Protection of infant ind.  When foreign competition is reduced or eliminated by import barriers, domestic ind. can develop reapidly.  Protection frequently cannot be removed because the domestic industries never develop sufficient competitive strength The evolution of protectionist in Canada, Keynesian ideas and formulas were no longer working 1. Inflation erupted 2. Unemployment rose 3. Critical shortages and rising cost of energy changed the economy and then became a stagflation INCO New demand on mining industry New demand was imposed on the economic system including: 1. Environmental protection 2. Treatment of indigenous pep. 3. Product safety What the mining industry cares about 1. Custom and sales tax 2. Supply 3. Human resources and productivity 4. Public relations 5. Trade policy 6. Transportation and infrastructure What Activists care about? 1. Protecting water 2. Reforming mining laws and policies 1. Indigenous peoples land 2. Parks and protected areas 3. Pvt. Properties 3. Promoting and environmental planning and assessment 4. Insuring corp. accountability Regional Diversities of Disparities Why is Alberta richer than Ontario? 1. Because of immigration patterns 2. Economy - assessed to capital, Occupational mobility, and market size 3. Cultural Differences - spatial mobility: first nation 4. Resources are diff. 5. Historic difference If you are the gov’t how do u manage regional difference? 1. Industrial incentive program 2. Infrastructure assistant program 3. Social adjustment and rural development programs Flows of regional development  Industrial incentive programs favor capital- intensive programs in areas where one of the major problems is excess labour. Example: the mega project. What is a mixed economy? 1. Moderated capitalism 2. Mostly free market but gov’t regulated competition 3. Some state ownership 4. Gov’t protect indigenous industries such as timber, fishing mining, and manufacturing 5. Gov’t protect and develop social program The Goals of NAFTA 1. The gov’t of Canada, U.S, and Mexico resolved to strengthen the special bonds of friendship and co operation among the nations 2. To create an expanded and secure market for goods and services produced in their territories. 3. To reduce distortion to trade. 4. To build on the respective rights and obligation under the GATT general agreement of trade and tariff and other multi natural and bi natural instruments of co-operation. 5. To enhance the companies of a firm in global market place. 6. To promote sustainable development 7. To strengthen the development and enforcement laws of regulation 8. TO under each of the preceding in a manner consistent with environmental protection and conservation. Auto Industry, Wine NAFTA, WTO How do they relate to the above industries? Protectionism for Auto. Privatization for Wine Ind. If auto and wine mentioned together. Tell them what gov’t do in federal and provincial level Difference between US and Canada in political and ideology Canada 1. In Canada peaceful transition to independence 2. More collectivists 3. More Gov’t involvement 4. More sense of responsibility of social welfare 5. More power not specially reserved to the provinces are allotted to the federal gov’t 6. Houses of commons choose a representative democratically 7. Senates are appointed 8. Cooperative Federalism US 1. Revolution to independence 2. More individualist 3. Less gov’t involvement 4
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