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Chapter 4

AFM131 Chapter Notes - Chapter 4: Monetary Policy, Money Supply, Liquor Control Board Of Ontario

Accounting & Financial Management
Course Code
Robert Sproule

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Chapter 4 Notes
The Role of Government in Business
Government Affects Business:
National Policy is the government placing high tariffs on imports from the US
to protect Canadian manufacturing. (pg 103)
Crown Corporations
A company owned by the provincial or federal government (ex. LCBO).
They were created to bail out failing industries or provide services that were
otherwise impossible to provide (ex. Air Canada was formed in the 1930s).
Privatization occurs when the government sells these Crown Corporations to
the free market. (pg 103)
Laws and Regulations
Can have a huge impact on business.
Laws come from 4 sources: 1.) Constitution; 2.) precedents established by
judges; 3.) provincial and federal statutes; 4.) and federal and provincial
administrative agencies. (pg 105)
Federal Government Responsibilities
Some responsibilities that affect businesses include: trade regulations;
incorporation of federal companies; taxation; banking and monetary system;
national defense; unemployment; immigration; criminal law; fisheries.
Responsible for issues affecting citizens all across Canada.
Ensure and support the country’s economic performance.
Lobbies with other governments around the world to reduce trade barriers.
Helps to ensure competition exists and include fair practices.
Marketing Boards control the supply and pricing of certain agricultural
products in Canada. This is done to improve the stability of the otherwise
volatile agricultural industry. (pg 106-108)
Provincial Government Responsibilities
They are responsible for the following: regulation of provincial trade and
commerce; natural resources within their boundaries; direct taxation for
provincial purposes; incorporation of provincial companies; licensing for
revenue purposes; administration of justice; health and social services;
municipal affairs, property law; labour law; and education.
Responsible for issues province-wide.
Federal and provincial governments work together to provide healthcare.
Municipal Government Responsibilities
Set up by provincial legislatures to govern smaller areas, like cities and
Have roles in consumer protection.
Issue municipality license to operate and charge for utilities. (pg 111-112)
Taxation and Financial Policies
Taxes are the way all governments make their money and redistribute wealth.
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