The role of Government in business How government

The role of Government in business

How government affects business There are 7 categories: 1. Crown corporations – companies owned by federal or provincial governments which provide goods and services that (at the time) are not available through other businesses Under federal/provincial ownership, businesses may have more strict regulations to adhere to

How government affects business 2. Laws and Regulations A. Federal government – is responsible for issues that affect citizens across Canada such as: taxation, criminal laws, national defence, unemployment, banking systems B. Provincial government – is responsible for issues that affect citizens within the province, but not those outside of it such as: provincial trade, property laws, education, labour laws C. Municipal government – is responsible for issues in municipal areas such as water supply, sewage, electricity, street/road conditions, garbage disposal

How government affects business 3. Taxation and financial policies A. Fiscal policy – adjustment of taxes or government spending to stabilize the economy B. Deficit – when the government spends more than what it takes in via taxes

How government affects business 4. Financial aid A. Direct intervention – government assistance programs giving loans, grants, consulting services, etc B. Equalization of transfer payments – direct payments from the federal government to provincial governments, or to other individuals. This enables poorer provinces to provide comparable services as wealthy provinces. C. Marketing boards – organizations that control the supply or pricing of certain agricultural products in Canada

How government affects business 5. Purchasing policies – Using federal/provincial gov’t buying power to favour Canadian companies Contracts may be awarded to Canadian companies, although they cost more 6. Services – Providing direct services to Canadian companies 7. Other expenditures: How tax dollars are spent – pension, welfare, employment insurance and allowances for low-income families

Department of Foreign affairs and International trade Government assistance in exports and foreign-investment activities Many departments devoted to this, providing: financial aid, marketing, information, insurance and contacts. Please read Reaching beyond our borders: Cirque du Soleil In a paragraph write up: Now imagine you’re a start up company, producing a good of choice (decided within your cohort). 1. Where would you look for investment support first, and why? 2. When it is time to consider globalizing, which country would you choose and why? 3. To achieve success, which strategy for reaching global success would you use, and why? Exporting, licensing, franchising, contract, joint ventures, alliances or foreign direct investment