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Chapter 3

POLS 1400 Chapter Notes - Chapter 3: Petro-Canada, Old American Company, Maxar Technologies

Political Science
Course Code
POLS 1400
Nanita Mohan

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Issues in Canadian Politics-Ch 3 Politics and the Economy
Economic Historians describe Canada as a country whose financial gain relies on the export of
its seas, forests, mountains and plains
-natural resources which are non renewable are of decreasing importance (oil)
-towards end of the 19th century heavy industries were established (iron, steel, paper
and pulp plants)
-the bulk of employment today is in the service center
-relied heavily on exports for financial services
Foreign Investment and Ownership
Branch Plants, American Company setup to produce and sell goods for the Canadian market
Foreign investment pros
-increased economic activity and employment
-access to modern technology
-access to market outside of Canada
Foreign Investment Cons
-American branch plants often purchase their supplies from the states and concentrate
their research in the states
-most of the funds to buy out Canadian companies come from Canadian financial
-Canadian nationalists feared the loss of our Independence due to so much American
1973 Foreign Investment Review Council
-allowed to review proposals from foreigners to take over Canadian businesses or to set
up new ones within Canada
-negotiations with foreign investments now available
-EX) Petro-Canada 1975
-liberals believed a state wide oil company would provide the government with
the knowledge needed to develop energy policies that promoted Canadian interests
-decrease in foreign takeovers until 2006
-2006-2007 increasing foreign takeovers again
-Ex) Hudson’s Bay Company taken over by NDRC Equity based in the US

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-only one occurrence since 1985 did the Canadian government intervene with foreign
-2008 rejected an American takeover of the space technology division of
MacDonald Dettwiler and Associates
-had built surveillance satellite
-government intervened as they were worried they would no longer have Intel on
the possible foreign vessels in the Arctic Circle
Auto Pact (Canadian-US Auto Agreement)
-eliminate tariffs b/t the two countries on new automobiles, truck, buses and original
-still provided a guarantee on the level of production in Canada
-highly productive Canadian plants led to an increase in automobile production in
Canada with more American auto companies locating new assembly plans there
-1980s Canada and US enjoyed high level of trade mostly without tariffs
-Canada worried Americans would apply their trade remedy laws to protect their
producers from Canadian imports
-American Trade Remedy Law
-countervailing duties
*duties imposed on the import of a particular product that has been subsidized by
the exporting country in a way that harms the home producers of that same product
-Anti-Dumping duties
*imposed on imports of a particular product when a foreign producer sells the
product in the importing country for less then it’s fair value
Remedy laws are allowed under World Trade Organization (WTO)
*US very aggressive in using these laws, powerful American companies are able to
harass imports into the US
-Major goal in Canada entering a free trade agreement was to avoid US remedy laws
-eliminating tariffs on goods traded among the three countries (US, Canada, Mexico)
-eliminating restrictions on the export of most goods
-forbidding new laws and regulations to protect service industries
-requiring that investments from other countries be treated the same as domestic investments
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