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Mid-Term Exam 40% ►Availability

ƒ The Mid-Term is available on line http://www.geocities.com/lafitte_ca/1010

Your midterm is posted below. It is Due on October 11th, in Class Late papers with 5 mark penalty

Class Administration: Mid-Term Grading Structure •

Mid-Term Assignment 40%

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Academic Integrity Tutorial http://www.yorku.ca/tutorial/academic_integrity/

Business in the Canadian Context ADMS 1010 Course Administration – Mid-Term 10 Double-Spaced Pages

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Good Essay Writing Skills expected

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Spelling and Grammar Count – Proof Read Your Work

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If in doubt contact and attend the workshops at the Writing Centre. The Writing Centre is on the first floor of Atkinson -telephone: 416 736-5289.

Quotation marks must be used for all direct quotes

Academic Integrity http://www.yorku.ca/secretariat/legislation/senate/acadhone.htm

Class 2: Implications of Federalism on Business

Part 1: Introduction to Federalism ► Examples

of Federations ► Canada ► USA ► Australia ► Great Britain is a Unitary State

What is a Federal state ► Governmental

power is distributed between a federal authority and Provincial or State authorities ► Every individual is subject to the laws of the central government and the regional government

What is a Federal state ► The

central authorities coordinate their roles and responsibilities. ► Neither can subordinate or overrule the authority of the other. ► Example while Ontario has power over local education the Federal government does not.

Two levels of Government in a Federal State ► Provincial

(Ontario)

► Federal

(Canada)

What is a Unitary State ► Power

is located in one central authority. ► Local authorities are subordinate to the central power. ► The legislature may remove the power granted to it by the central government. ► Example: Toronto is subordinate to the province of Ontario. ► Result: Decisions by the province such as the Megacity amalgamation can occur.

Equality in Federalism ► In

no federation does perfect equality exist between all in the federation. ► Nova Scotia does not have the same role or power as Ontario. ► The Senate of Canada was designed to help that. It did not. Why?

What determines a Federal state? ► There

is a legal guarantee of authority to each of the regional authorities. ► This justifies the coordination and cooperation with the central authority.

Problems of Federalism ► Conflicts

in fiscal

policy. ► Federalism can protect the status quo or move to change them. ► Federalism can act as a barrier to change

Dual Challenge of Federalism ►A

federal state must attempt to build a national strategy. ► Canadian government must be seen to develop a national immigration policy.

►A

federal state must attempt to appease regional interests. ► Example: Canada must try to appease Quebec to keep it in Canada. ► Result: Quebec has unique immigration policy.

Definitions of Federalism ► Emphasizes

the legal and institutional aspects of the system. ► Kenneth Where defines the federal principle as the method of dividing powers so that the general or central regional governments are each within there sphere coordinate and independent.

Why is difficult define federalism? ► The

concept of government, like federalism achieves precise meaning only through being used in similar way over time by a variety of people. ► Most people, and governments for that matter, have different ideas of what is the ideal federal system.

Why is Federalism hard to define in Canada? Canada has both a French and English culture. 2. We are not by definition nationalist. 3. The Provinces and the Federal government are often in dispute over their authority in specific areas. Example: Health care. Education. Trade 1.

What are the challenges to Canadian Federalism? Duality of federalism. The country versus the regions. 2. Nature of Regions. Many areas of Canada were independent prior to Confederation and have their own distinct identities. 3. Vast geographic distances. 1.

What is necessary for Federalism? ► There

is still an area of guaranteed autonomy for each province or state. ► There is cultural an regional diversity beyond the central government. ► There are conflicting policy goals and initiatives between the two levels of government.

How does the Constitution Define the Federal Government? ► The

preamble to the British North America Act remarks:

► Federally

united in one Dominion under the crown of the United Kingdom of Great Britain and Ireland, with a constitution similar in principle to that of the United Kingdom. (i.e. a parliamentary democracy).

Part 2: The requirements of Federalism ►A

political union of two or more units that are allocated powers within their respective jurisdictions.

Federal Legislative Powers ► It

shall be lawful for the Queen, by the advice and consent of the Senate and house of Commons to make Laws for the Peace, Order and good Government of Canada. ► Canada Health Act, International Trade, Defense, Transport Canada, Fisheries.

Provincial Legislative Powers ►

►

Section 92 and 93 on Canada’s Constitution distributes exclusive legislative powers to the provinces over regional interests. Example: Cities and Towns, Education, the provision of Health Care, Welfare and Transportation.

Judicial Review

►

Designed to create balance in the system. Courts can determine if a particular law is valid and can be enacted by any legislature. Federal - National Matters Provinces - Local matters.

►

Examples? Abortion.

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Differences between US and Canada ► In

Canada ► All powers not specifically reserved for the provinces are allotted to the Federal government.

► United

States ► All powers not specifically reserved for the Federal government are allotted to the States. ► Why?

What threatens Canadian Federalism? ► Distinct

society federalism. ► This emerged out of frustration with the central government, (Quebec) and shook the foundation of the Canada. ► Provinces moved to assert their autonomy. ► Immigration, Language and Healthcare. ► Where have these issues emerged?

Part 3: Money and Federalism ►

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Fiscal and administrative arrangements are a key component of federal provincial relations. How much and who gets what is the defining question of the Dominion of Canada. Politics plays a key role, but there are other elements.

Factors that Contribute to Canadian Federalism ► Canada’s

founding fathers believed that the Civil War in the United States was caused by overly independent States. ► The government of Canada has Emergency Federal powers. During the two world wars the Federal government assumed almost dictatorial powers. ► What effect did The Great Depression have on Canadian federalism?

Factors Contributing to Increased Federalism. ► Federalism

was influenced by the economic theories of John Maynard Keynes. ► Federal authority was seen under Keynes economic model to be the provider of economic stability through the use of the Central Bank to regulate money supply and through economic stimulation. ► Why did he believe this?

Federal Activism ► To

forestall a post war recession, the Federal Government embarked on a program of post war reconstruction and social spending. ► Medicare. Trans Canada Highway.

Federal Activism ► Feds

increasingly involved themselves in Provincial affairs. ► Used transfer payments to coerce the provinces into adopting new national programs. ► Welfare, Universities, National Health Care.

Federal Activism Conditional Grants ► In 1946 conditional grants accounted for $58 million in transfers ► By 1967 it had risen to $1.5 billion. ► It was regarded as part of nation building.

Conditional Grants ► Conditional

grants can distort provincial budgetary

priorities. ► The federal government can increase their influence in areas of Provincial jurisdiction. ► The Provinces could refuse grants, however, the realities of politics makes this unlikely. ► Interest groups will pressure provinces into accept grants. ► Example: Medicare 2002. All provinces signed on to the Federal funding offer.

Conferences ► Federal

Provincial Conferences - The federal government set the agenda and therefore hold the advantage. Topics include the constitution, transfers, health, education, CPP etc. ► First Minister’s Meetings – Held between the Premiers and the Prime Minister. Recently the Premiers have dominated the agenda. (Executive Federalism). ► Held behind closed doors. Joint Statement. ► Secrecy is important. (Why?) It keeps options

open.

Cooperative Federalism ► Has

cooperative federalism led to a stronger provincial or federal government?

Part 4: Regional Diversities and Disparities

What is Canada? ► Canada

is a federation of very diverse regions. ► Economic ► Cultural ► Historic ► East, West, Quebec, Ontario. ► Discuss

Province of Quebec ► ► ► ► ►

Is a distinct region Has a separate and unique educational system Has a distinct code of Civil Law It has a political pattern of separatist behavior. The effect is to make regional cleavages a distinctive element of Canadian federalism

Regional Differences ► Influenced

by immigration patters. ► Economics ► Cultural differences ► Resource differences ► Historic differences ► Discuss Examples.

Regional Differences ► ► ► ► ►

Market access for products. Ontario vs. PEI Natural Resources – Inherently Volatile Occupational mobility, fishing and mining Spatial immobility “I like it here!” Claim to capital, i.e.. Bank Loans

Feds try to Manage Regional Differences three ways. 1. 2. 3.

Industrial Incentive Programs Infrastructure Assistance Programs Social adjustment and rural development programs.

Federal Activism ► Why

do the Feds care about regional differences? ► Politics. Regional voting, particularly in Quebec and Ontario can kill a government. ► The Senate is weak so Ottawa must provide leadership.

Industrial Incentive Programs ► Make

viable industries attractive in slow growth regions. ► Tax credits, seed money, consulting services. ► Oil and Gas in Newfoundland.

Infrastructure Assistance Programs ► Assist

in providing capital for sewers, water, road improvement, hospitals and universities. ► Example. Toronto to Montreal high-speed rail proposal.

Social adjustment and rural development programs. ► Try

to develop industries in areas where there is little or no productive employment. Example: The soap stone carving industry in Nunavut.

Why do these Programs exist? ► Primary

goal is job creation. ► Sustains families ► Dignity ► Politics ► Economy

Why do these programs exist? 1. 2. 3. 4.

To strengthen power of Federal authority. Political motives. Nation building. Reduce equalization payments.

Criticism - These programs may support inefficient economic activities at the expense of viable economic activities. Discuss.

Types of Economic Incentives ► Loan

guarantees ► Tax incentives ► Cash grants ► Marketing and promotion. ► Bailouts ► Examples?

Bailouts ► Economics

suggests that business failure is a common and necessary part of the business cycle. ► It removes unsuccessful firms and replaces them with efficient ones.

Bailouts ►

►

►

When a firm fails the shareholders loose their investment and the companies assets are sold at reduced prices. Those assets if placed in the hands of energetic new management increases competitiveness. Thus new employment is created.

Bailouts ► Under

this hypothesis, government intervention is generally considered to be counterproductive. ► Costly ► Ineffective ► Unfair

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National Sea Products Chrysler Canada Massey Ferguson DEVCO Sydney Steel

Flaws of Regional Development ► Industrial

incentive programs favor capital intensive program in areas where one of the major problems is excess labor. (Mega-projects). ► Do the companies really need the grants, or would they have done it anyway? ► Grants to one company could hurt other existing companies who have not received grants.

Flaws of Regional Development ► Industrial

incentive programs may accrue to multinational companies in foreign countries. ► Could lead to ‘bidding wars’ between neighboring provinces or countries to secure the relocation of large companies. Example: Ontario Auto negotiations 2003.

Future of Federalism in Canada ► Will

Canada continue to be divided along regional lines? ► Has the current government policy helped or hindered the problem? ► What is the moral obligation of a Federal government?