AFM131 Chapter Notes - Chapter 4: Canadian National Railway, Canada Pension Plan, Air Canada
26 Jun 2018
School
Department
Course
Professor
AFM131
Chp 4: The Role of Government in Business
GOVERNMENT AFFECTS BUSINESS
- Gov’t activities that affect business divided into six categories
o CROWN CORPORATIONS; hundreds, compete w/ for-profit businesses
o LAWS AND REGULATIONS; ex) taxation, consumer protection, environmental controls,
working conditions, labour-management relations
o TAXATION AND FINANCIAL POLICIES; gov’t collect taxes (income, GST, HST, PST,
property), fiscal policy: fine-tune taxation to achieve goals/give effect to policies
o GOV’T EXPENDITURE; provide direct & indirect aid packages as incentives to achieve
certain goals, ex) tax reductions, grants, loans, loan guarantees
o PURCHASING POLICIES; federal gov’t is largest purchaser (of supplies, services,
materials) in Canada, its policies on where to purchase have major effect on businesses
& economy
o SERVICES; direct & indirect activities, ex) helping countries go international, bringing
companies to Canada, training workforce
- Canadian economic system is mixed economy – some allocation of resources made by market,
some made by gov’t
- When Canada was formed in 1867: federal gov’t given power to “regulate trade and commerce”
o Mainly traded w/ US, who developed faster w/ larger population & economy
- NATIONAL POLICY – gov’t directive that placed high tariffs on imports from the US to protect
Canadian manufacturing, which had higher costs
- Levels of government are large employers in Canada
CROWN CORPORATIONS
- CROWN CORPORATIONS – companies that are owned by the federal/provincial gov’t
o WHY? To provide services not being provided by businesses (ex. Air Canada), bail out
major industry in trouble (ex. Canadian National Railway), provide special services (ex.
Bank of Canada)
o Province typically owns electric power company
- Alberta Heritage Savings Trust Fund
o Established in 1970s, Alberta economy prospering from oil boom
o Gov’t set aside part of oil royalty revenue to start fund
o Makes investment decisions to benefit Alberta
- Caisse de dépôt et placement du Québec (Quebec Deposit and Investment Fund)
o Established in 1966 to handle funds collected by Quebec Pension Plan
o Parallel to CPP
o Handles other Quebec gov’t funds, powerful investment vehicle
o Makes decisions to benefit Quebec economy
- Since 1990s, federal & provincial gov’t began reducing gov’t role in economy
o Former large corporations sold (ex. Air Canada, CNR)
22
AFM131 Full Course Notes
Verified Note
22 documents
Document Summary
Chp 4: the role of government in business. & economy: services; direct & indirect activities, ex) helping countries go international, bringing companies to canada, training workforce. Canadian economic system is mixed economy some allocation of resources made by market, some made by gov"t. When canada was formed in 1867: federal gov"t given power to regulate trade and commerce : mainly traded w/ us, who developed faster w/ larger population & economy. National policy gov"t directive that placed high tariffs on imports from the us to protect. Levels of government are large employers in canada. To provide services not being provided by businesses (ex. Air canada), bail out major industry in trouble (ex. Bank of canada: province typically owns electric power company. Alberta heritage savings trust fund: established in 1970s, alberta economy prospering from oil boom, gov"t set aside part of oil royalty revenue to start fund, makes investment decisions to benefit alberta.
