The Role of Government in Business:
I – Government Affects Business:
What are the different categories to the government’s involvement with business?
• Crown Corporations:
There are hundreds of such companies, and they play an important role in the
economy. Crown corporations sometimes compete with forprofit businesses.
• Laws and Regulations:
These cover a wide range, from a taxation and consumer protection to
environmental controls, working conditions, and labourmanagement relations.
• Taxation and Financial Policies:
All levels of government collect taxesincome taxes, the GST, sales taxes, and
property taxes. Taxation is also finetuned by government to achieve certain goals or
to give effect to certain policies. This is called fiscal policy.
• Government Expenditures:
Governments pay out billions of dollars to Canadians. When these recipients spend
this money, businesses benefit. All levels of government provide a host of direct and
indirect aid packages as incentives to achieve certain goals. These packages consist of
tax reductions, grants, loans, and loan guarantees.
• Purchasing Policies:
Governments are very large purchases of ordinary supplies, services, and materials to
operate the country. Because the federal government is the single largest purchaser in
Canada, its policies regarding where to purchase have a major effect on particular
businesses and the economy.
Vast array of direct and indirect activities, among them helping companies go
international, bringing companies to Canada, training and retraining the workforce and
providing a comprehensive statistics service through Statistics Canada. II – Government involvement in the economy:
The Canadian economic system is described as a mixed economy – that is, an economic
system in which some allocation of resources is made by the market and some is made by the
What is national policy?
• Government directive that placed high tariffs on imports from the United State to
protect Canadian manufacturing, which had higher costs.
What is a crown corporation?
• A company that is owned by the federal or provincial government.
• They provided services that were not being provided by businesses (Air Canada:
• They were created to bail out a major industry in trouble (Canadian National Railway:
What are Canada’s largest crown corporations by revenue?
• Canada Mortgage and Housing
• Canada Post
• Atomic Energy of Canada
• Canadian Commercial
• Export development
What are the top provincial crown corporations?
• Caisse de depot et placement
• Ontario Power Generation
• Hydro one
• Insurance corp. of B.C What is privatization?
• The process of governments selling crown corporations.
III – Laws and Regulations:
The power to make laws is based on the British North American Act, 1867 (BNA Act)/ The
BNA Act became part of the new Constitution and was renamed the Constitution Act, 1867.
Laws are derived from four sources:
• The Constitution
• Precedents established by judges
• Provincial and federal statutes
• Federal and provincial administrative agencies.
What are the federal government responsibilities?
• To ensure and support the country’s economic performance.
• Trade regulations (interprovincial/international)
• Incorporation of federal companies
• Banking and monetary system
• National defense
• Unemployment, immigration
• Criminal law
• Fisheries etc.
What are the major consumer protection laws?
• Canadian Agricultural Products Standards Act:
Cover a wide range of farm products, such as meat, poultry, eggs, maple syru, honey
and dairy products. • Consumer Packaging and Labelling Act:
Applies to all products not specifically include in other acts.
• Food and Drug Act:
Cover a whole range of regulations pertaining