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Chapter 4

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BUSI 1600U
Shaprio, Morden

Management of the Enterprise thSeptember 28 2011 Chapter 4 The Role of Government in Business Government Affects BusinessGovernment activities that affect business are in 6 categoriesCrown corporationsLaws and regulationsTaxation and financial policiesGovernment expendituresPurchasing policiesServicesGovernment Involvement in the EconomyEvery countrys government is involved in its economy but the specific ways in which the governments participate vary a great dealWhen Canada was formed as a country in 1867 the federal government was given the power to regulate trade and commerceThe US developed much faster and with a much larger population and a bigger economywhich provided products not available in the provinces either because they were not made in Canada or because there was no transportation to distribute themNational PolicyGovernment directive that placed high tariffs on imports from the US to protect Canadian manufacturing which had higher costsPlaced high tariffs on imports from the US to protect Canadian manufacturing which had higher costsThe 2 issues CanadaPeru Free Trade Agreement and CanadaEuropean Free Trade Association has set the tone for the continuing and substantial involvement of Canadian governments in developing and maintaining the Canadian economyCrown CorporationsCrown Corporationa company that is owned by the federal or provincial governmentProvide services that were not being provided by businesses which is how Air Canada came into being in the 1930sWere created to bail out a major industry in trouble which is how the Canadian National Railway was put together in 1919Provide some special services that could not otherwise be made availableCrown corporation owns the provinces electric power company example HydroQuebecThe Financial Role of Two Special Provincial Crown CorporationsAlberta Heritage Savings Trust FundEstablished in 1970s when Alberta economy was prospering from oil boomGovernment set aside a part of its oil royalty revenue to start the fundIn 2008 the Funds assets totalled 145 billionIt makes investment decision that will benefit AlbertaCaisese de depot etplacement du Quebec Quebec Deposit and Investment FundEstablished to handle the funds collected by the Quebec Pension Plan2204billion in total assets under management in 2008Set up to parallel the Canada Pension Plan in 1966It also handles other Quebec government funds and is a very powerful investment vehicle that is used to guide economic development in Quebec The Role for GovernmentSince the 1990s federal and provincial governments have embarked upon a series of measures designed to reduce the role of government in the economyPrivatizationthe process of governments selling Crown corporationsDuring this time industries that had been regulated airlines oil and gas etc were partially or completely deregulated similar acitvities were undertaken by provincial governments municipal governments were also looking to privatize services such as water systems garbage collectors etcLaws and RegulationsThe power to make laws is based on the British North America Act 1867 BNA ActThe BNA act was passed by the British Parliament in 1867Created the Canadian Confederation and it sets the legal ground rules for CanadaWas renamed the Constitution Act in 1982Laws are derived from 4 sourcesThe ConstitutionPrecedents established by judgesProvincial and federal statutesFederal and Provincial administrative agencies
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