ADMS 1010 MIDTERM REVIEW
• Organizations are:
1. Social entities
2. Goal directed
• Societal welfare
"Peace, order & good
"Jobs, growth & prosperity" $
• Economic domain • Profit maximization
• Re-election • Making money
2. Deliberately structured & coordinated
3. Linked to environment
• Mutual Dependence:
• Mercantilism vs. Market Liberalism - Approaches to gov't involvement in the
Mercantilism Market Liberalism
• Partnerships with private capitalist • Individual liberty.
enterprises. • The private ownership of
To secure gov't support property.
in 'the national interest'. • The rule of law.
• The diffusion of both political
power to maximize the social
and economic well-being of
Use of protective tariffs (taxes on imports) and regulations:
• Develop infant industries
• Shared economic interest between gov't and commercial class
• Domestic expansion
Development and protection of 'strategic' industries:
Ex. Banking, Rail/Air transport etc. • Distributive Policies:
Redistribution of economic opportunities and benefits:
• Public interest
• Equal opportunity
• Correction of market failures
Done through subsidies, taxes, regulatory preference
• Political Ideologies in Canada:
• Political Ideologies continued:
• Accept basic free market principles. • Gov't should be limited.
• Shift profits of country to benefit
To make country better.
• Distinctive Features of Canada's history:
Rich in natural resources
Close relationship with the USA
The Foundations of Canada's Economy
• Hierarchy of Canada:
Queen → Governor General
• Beer Store Case:
- Gov't owned and run
- Crown corp.
- Foreign owned
- Gov't regulations
• Constitution Act (BNAAct), 1867:
o Federal structure
o Dominion formed (Canada Day)
• Federalism - the sharing of power between national and provincial/state gov'ts.
Divides power; provinces have the same authority as the federal gov't.
Main challenge: Different interests
National Strategy Regional Interests
• Fed. state must attempt to • Fed. state must attempt to
build a national strategy. appease regional interests.
• Nation building projects, • Regionalism: The shared
national identity, national identification of citizens with
economic strategy etc. a region as a distinct political/ social community based on
different interests and
political, economic, and
Canada's Transfer Payment Policy:
• Transfer payments are used to redistribute Canada's wealth fairly
• A collection of fiscal equalization processes.
• Used to redistribute Canada's wealth fairly between the provinces.
o Canada must help poorer areas with tax dollars generated
in Alberta, BC, Saskatchewan, and NFL.
Send more money to Ottawa than they receive
• A province that does not receive these payments = "have
• A province that does receive these payments = "have not
• Division of Powers in Canadian Federalism:
Select Federal Select Provincial
the public debt direct taxation within the province
the regulation of trade and in order to the raising of a revenue
commerce for provincial purposes
postal service the establishment, maintenance,
the census and statistics and management of hospitals,
militia, military and naval service, asylums and charities
and defence municipal institutions in the
sea coast and inland fisheries
currency, coinage and legal tender shop, saloon, tavern, auctioneer,
copyrights. and other licences in order to the
natives, and lands reserved for the raising of a revenue for provincial,
natives local, or municipal purposes
the solemnization of marriage in
naturalization and aliens the province
generally all matters of a merely
local or private nature in the
• Constitution/ BNAAct granted the dominion exclusive authority over:
o Related issues
• Key Economic Challenges at Confederation:
1. Trust in the Banking System • Undermined by numerous bank failures.
• Limitation to:
o Financing new development
2. Common Currency
• Numerous currencies, multiple valuations
• Question of national unity
• Economic Context at Confederation:
o 38 separate Canadian banks; Bank of Montreal with 25% of all assets.
o Dissolution of the Bank of Upper Canada
• Overextend in the canal and railway businesses
• Double liability clause, but no enforcement
o First bank of the US:
Became the model for the Canadian banking system.
o Free banking (US):
• Licensing of banks reverted to the states
• Anyone with capital could open a branch
• Flood of fraudulent money - highlighted need for single national
issuer of currency.
• Capitalization - Meant to ensure sufficient reserves underlying the money supply.
• Double Liability - Shareholders are liable for investments and bank debt upon
• Bank Liabilities - Limiting bank notes that can be issued.
• Parliamentary Review - Ensuring a re-examination of old laws. • THE DIAMOND OF SUSTAINABLE GROWTH:
HR: Enabling Political Systems
• Unify economically relevant territory
• Establish order, rule of law - protect life, liberty and property.
• Education, health
• Address social and wealth inequalities.
Effective Financial Systems
• Able to transfer surplus funds to areas of need.
• Banks, capital markets, limited-liability corps.
• Development of new:
o Products and services
o Combinations of land, labour and capital
Sophisticated Managerial Capability
• Required for large, complex organizations
• To realize economies of scale/scope
• Predicated on robust education Canada Expands - Agriculture and Manufacturing
• The Staples Theory of National Economic Development:
o A theory of economic growth
o The premise: Export of a few dominant natural resources (i.e. "staples") shaped
the economy and social/political systems.
Canada a colonial dependency
Regions dependent on export of a single dominant resource:
• New France: Fur → Hats
• NFL: Fish (Cod) →Fish & Chips
• New Brunswick: Trees → To fight wars (Ex. build ships etc.)
o Differing Views:
The staples/ export economy led to continuing dependency and economic
• NFL: Beyond cod, they didn't develop → became dependant.
• Timber: From cutting trees to equipment manufacturing,
chemicals and hydroelectric power.
o Feed into that resource and develop.
The staples/ export economy provided the foundations or a more
developed industrialized economy.
• Early Colonial Era:
o Statism: The view that the state has a major, necessary, and legitimate role in
directing the economy, either directly through state-owned enterprises and other
types of machinery of government, or indirectly through economic planning.
o Clinetelism: The exchange of goods and services for political support, often
involving an implicit or explicit quid-pro-quo.
• Late Colonial Era:
o Loss of British Imperial Preference (1840's): Unnilateral removal of tariff
dutiese that favoured British territories, including Canada.
o Reciprocity Treaty with US (1854-1866): Allowed tariff-free access to more
than 90% of the existing trade between the US and Canada (i.e. a free-trade
• Early National Era:
o The National Policy:
• US revoke reciprocity and erect high tariff barriers
• Economic depression through the 1870's
A mix of policy initiatives:
• Protective tariffs and selective gov't subsidies
• Transcontinental railroad
• Western settlement
• Protectionism - The economic policy of restraining trade between states through
methods such as tariffs on imported goods, restrictive quotas, and a variety of other
government regulations designed to allow (according to proponents) "fair comp