the Role of Government 
in business and marketing
- part of the Political Environment
.updated 2006 Sept 19
 
INTRODUCTION Canada and the U.S. have many similarities but one of the big differences is the influence and role of the national government on how businesses can operate.

In the U.S., the social-cultural environment and historical influences have created a situation where the government has much less interference in many of the ways business can operate - particular red tape. In Canada, our historical relationship with the U.K. and our tendancy to think of the federal government solving all of our problems, has led to a situation where government rules and regulations are quite burdensome for businesses. This situation has led some large Canadian businesses such as Nortel, to locate the majority of their operations in the U.S. even though they are corporately stil a Canadian company.
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crown corporations Crown corporations are a situation that does not exist in the U.S.

The word "crown" refers to the legal fact that the Queen is the head of state in Canada and all government activities are legally done with her approval. In practice, this refers to the circumstance were federal cabint ministers from the ruling political party are empowered to act on behal of the Queen.

In Canada, there are "... hundreds of crown corporations and they play an imortant role in the economy. Crown corporations sometimes compete with regular business".

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crown corporations

different than companies

 Crown corporations provide "special services that could not otherwise be made available" because it is considered that
  • private companies might not distribute the service equally across the entire country
    • it is expected a company would cut costs to get profits and this might mean they would not provide service all across the country
  • it would be too expensive for a private company to operate the service at a profit
  • private companies might not attend to politically correct social-cultural coniderations, like gender, language and race issues
  • crown corporations might be expected to handle privacy issues more carefully, especially when dealing with highly confidential matters related to individual citizens
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crown corporations

different than companies

 Crown corporations provide "special services that could not otherwise be made available" because it is considered that
  • private companies might not distribute the service equally across the entire country
    • it is expected a company would cut costs to get profits and this might mean they would not provide service all across the country
  • it would be too expensive for a private company to operate the service at a profit
  • private companies might not attend to politically correct social-cultural coniderations, like gender, language and race issues
  • crown corporations might be expected to handle privacy issues more carefully, especially when dealing with highly confidential matters related to individual citizens
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laws and regulations Canadian laws and regulations are created as a consequence of the political process.

For example, if the public is concerned that too many people are smoking in restaurants, then people will complain to politicians, who will respond by proposing a "bill", which will then go through the process of being voted on - and if it passes the vote by the politicians, it becomes a law. This happens 

  • at the municipal level - for things like smoking bylaws
  • at the provincial level, for things like changing the age of drinking
  • at the federal level, for things like changing the GST
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federal government vs. provincial government
 

Federal

 Canada is a country in which the national government (federal) is often in conflict with the regional (provincial) government.

Federal law effects business operations such as

  • federal corporate taxtion
  • banking and money systems
  • operations of embassies and consulates
    • and passport & immigration matters
  • use of "crown land"
    • if a mine wants to operate, there are federal circumstances they have to adhere to + provincial pollution and environment regulations they have to deal with
  • international trade issues
    • tariffs and subsidies
      • eg. the import tariff on clothing items coming in to Canada
      • standards for goods exported out of Canada
federal government vs. provincial government
 

Provincial

 Canada is a country in which the national government (federal) is often in conflict with the regional (provincial) government.

In the U.S., the 50 states do not have much power compared to the federal government, but in Canada, the provinces have a lot of power.

Provincial law effects business operations such as

  • labour regulations
    • certification of building trades
  • licensing
    • eg. licensing bars & restaurants
  • education
    • for example the qualifications for a dentist, architect, plumber
    • a certified esthetician in one province may not have the same number of hours to qualify as in another province
  • health

 
 
 
 
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