Textbook Notes (363,559)
Canada (158,426)
York University (12,360)
ADMS 1000 (298)
Chapter 8

Chapter 8 Notes

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York University
Administrative Studies
ADMS 1000
Eytan Lasry

Readings- Chapter 8 The Canadian Business Enterprise System: Fundamental Features Government plays a critical role in Canadian economy The business enterprise system determines how or by whom decisions are made Capitalism: a type of economic system that’s based on a number of fundamental principles including: Rights of the Individual: individuals take precedence as apposed to institutions/ the overall society. Individuals have every right to pursue their own self-interest, however there are limits. Government regulations enforce rules that affect how business owners conduct their affairs. Ie, government guidelines regarding job candidate selection criteria for who is hired for a job Rights of Private Property: individuals have the right to own land, labour & capital. Because Canada’s wealth is not evenly distributed, government comes into play. Ie, by taxation. Competition: sufficient competition among business enterprises will ensure that business provides the goods & services required by society at a fair cost. The Role of Government: laissez-faire “let people do as they choose” which suggest little government interference. Aka “free enterprise system” The Tax Collector Role Can be at a federal, provincial or local level Revenue taxes: collecting money to help fund government services; include individual taxes, corporate incomes taxes, property taxes & sales tax Individual income taxes: based on the income of individuals or on the net profits of partnerships. They provide the largest source of revenue for the federal & provincial governments nd Corporate income taxes: provides thela 2rgest source of revenue; corporations are taxed on their net profit at a combined federal & provincial rate that can vary among provinces & can change on government policies Sales taxes: important source for most provinces. This tax is paid through retail stores, when goods are sold. The GST came into effect in 1991 which provides funds to the federal government Property taxes: largest revenue for municipal governments; the revenue gained from this is used to fund the operating costs of the municipal government & services they generate www.notesolution.com Restricted/Regulatory Taxes2 : MAIN FORMS Excise taxes: applied to goods or services that the government desires to restrict that have potential harm (tobacco) Tariffs The Business Owner Role: Crown Corporations Crown corporation: an organization accountable through a minister to parliament for its operations Can be federal (ie, Canada Post) or provincial (ie, Liquor Control Board of Ontario LCBO) They implement public policy that includes protecting or safeguarding national interests They protect industries deemed to be vital to the economy ie, Canadian national railway They provide special services that couldn’t be made available by private business They nationalize industries that were considered to be “natural monopolies” Each crown corporation is owned by the Crown & is managed by a board of directors By late 1980s, there were 53 parents Crown corporations at the federal level; employing approximately 180000 people, maintaining assets of around $60 billion The Regulator Role Wide scope for government regulation in business activity Imperfect Competition The need for government involvement Fewer competitors, the more secure a business becomes Imperfect competitions occurs when fewer than the optimal number of competitors exist Where there are an insufficient amount of competitors, there’s less pressure on businesses to offer the best good/service at competitive prices Inefficient businesses will remain, & consumers will be forced to accept products/services at prices given by the businesses Society is offered fewer goods/services citizens want The Public Interest Main objective of government regulations is to protect the public interest www.notesolution.com This is done through commissions, tribunals, agencies &
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