canada and international business
Canada and International Business
Canada is an outstanding country to do business at the international level. The country has a stable, independent government; a robust and stable legal system; strategic investment in education and technical training; as well as an innovative research and development environment, which provides a welcoming environment for potential investors by providing opportunities for companies that are seeking skilled labor. Canada’s economy is extremely diversified and has witnessed considerable growth in the recent years. The country’s GDP growth rate averaged 1.2 percent from 2008 to 2012, which was the highest among the G-7 countries (International Monetary Fund 3). Moreover, it is anticipated that the country will remain among the top performers through 2017. It is imperative to note that Canadian banks performed extremely well during the global financial crisis that lasted from 2007 to 2009 partly because of the government’s concrete approach to regulatory and risk management. Overall, it is important to understand Canada’s legal and business landscape to do business in the country successfully.
The Canadian Legal System in a Business Context
Canada is constitutionally a federal state, with some powers allocated to the federal government while territorial and provincial governments control others (McEwen and Luis 189). From a business perspective, provincial laws have more weight than federal laws because the law gives provincial governments power over civil rights and property, including securities law, land use, contract law, consumer protection, the regulation of professionals, occupational health and safety, municipal law, and labor relations (Jackson 246). While the federal government also plays a part in the facilitation of business, its role is more narrowly focused. In other words, the federal government is concerned only with particular businesses, such as railways, airlines, telecom operators, and financial institutions; specific kinds of business behavior, such as white-collar crime and anti-competitive behavior; certain types of property, such as patents and intellectual property; and issues that are of strategic importance to the country, such as monetary policy, immigration, and customs.
There are cases where certain aspects of a business are subject to the provincial or federal jurisdiction. For instance, while issues relating to labor relations generally fall under the provincial labor and employment regulations, the federal government retains jurisdiction over such matters if the businesses involved is a railway, an airline, a bank, or other types of federal business that falls under the federal labor code (Hale 180). Still, in some cases, various aspects of the business may fall under regulatory jurisdictions of both the federal and provincial governments. For instance, major insurance companies in Canada are federally chartered, and their prudential and governance activities fall under the supervision of the Superintendent of Financial Institutions (a federal entity) (Borden Ladner Gervais 13). However, the provincial insurance laws govern the marketing activities of such companies, as well as their policies and policyholder relations.
The International Competitiveness of Canadian Businesses
A number of factors affect the ability of a country to attain competitive advantage in the context of international business. In this regard, several factors must be considered when evaluating the competitive position or strength of a country. Employment statistics and per capita income are some of the statistics that may be employed in determining the international competitiveness of Canadian businesses, although other factors also exist. The factors discussed below illustrate that sometimes a single factor can have both negative and positive consequences for Canadian competitiveness.
Canada has a robust transport and communications infrastructure that is capable of supporting business. The strong infrastructure allows businesses to avail their products to the market. It also helps businesses to communicate with their suppliers and clients globally. In other words, the strong infrastructure adds to Canada’s strong appeal as an investment destination and a place to do business (Markey, Greg and Don 75).
The Canadian Workforce
Education achievement levels, as well as the level of training within the workplace, play an important role in assessing a country’s competitiveness. While the Canadian workforce is relatively small in size compared to other industrialized countries such as the United States and the UK, the country is endowed with a well-educated workforce (Krahn and Graham 52). In addition, the diversity and tolerance of Canada’s population give it an edge with regard to attracting foreign investment and competent labor from around the world.
Research and Development
A country’s level of research and development, which encourages innovation, can greatly impact its competitive position. Canada’s spending on research and development is not consistent and varies according to the economic sector under consideration. Overall, research and development in telecommunications and ICT (information and communication technology) lead the way.
The Availability of Natural Resources
Canada is endowed with abundant natural resources, such as minerals, oil and gas, vast water resources, and forest resources (Kogel 959). These give the country a competitive advantage. In addition, extant borders permit such exports to pass through Canada, as well as the United States. However, the disadvantage of this is that the transportation cost increases between Canada and external markets.
A Supportive Business Environment
Canada has consistently been ranked as an easy place to establish and run a business. The country offers both a conducive and supportive business environment, with opportunities for trade and investment. In addition, Canada’s strong ties with other regions, such as North America, Europe, and Asia mean that it is an attractive destination for businesses dealing in exports and imports. This is further strengthened by the fact that eighty-five percent of Canada’s largest cities are close to the American border and, therefore, the North America Free Trade Agreement (NAFTA) puts the country at a particular advantage with regard to doing business. Tax incentives and low corporate tax rates add to this advantage.
Intellectual Property and Securities Exchange
In Canada, provincial, federal laws, and common law govern issues with intellectual property. Federal statutes apply in the areas of copyright, industrial designs patents, trademarks, and integrated circuit topographies while common law or provincial laws apply in cases of confidential material, unregistered trademarks, as well as issues relating to intellectual property licensing. Economic changes in a country are always reflected in the changes in share prices. In other words, the stock exchange (or securities exchange) serves as the mirror of the economy and reflects the economic health of a country. Canada has a number of stock exchanges that are regulated by securities administrators of the territorial and provincial governments.
Canada ranks among the easiest places to do business. However, it is still important to understand Canada’s legal and business landscape to do business in the country successfully. Both the federal and provincial governments have put in place foreign investments. These include a supportive business environment, a competent and diverse workforce, and a robust infrastructure to support business activities.
Borden Ladner Gervais. Doing Business in Canada: An Introduction to the Legal Aspects of Investing and Establishing a Business in Canada. Vancouver, BC: Borden Ladner Gervais, 2014. Print.
Hale, Geoffrey E. Uneasy Partnership: The Politics of Business and Government in Canada. Peterborough, ON: Broadview Press, 2006. Print.
International Monetary Fund. Fiscal Monitor, October 2014: Back to Work, How Fiscal Policy Can Help. Washington, DC: International Monetary Fund, 2014. Print.
Jackson, Vicki C. Constitutional Engagement in a Transnational Era. Oxford, UK: Oxford University Press, 2010. Print.
Kogel, Jessica E. Industrial Minerals & Rocks: Commodities, Markets, and Uses. Littleton, CA: Society for Mining, Metallurgy, and Exploration, 2009. Print.
Krahn, H, and Graham S. Lowe. Work, Industry, and Canadian Society. Scarborough, Ont: Nelson Canada, 2010. Print.
Markey, Sean P, Greg Halseth, and Don Manson. Investing in Place: Economic Renewal in Northern British Columbia. Vancouver: UBC Press, 2012. Print.
McEwen, Nicola, and Luis Moreno. The Territorial Politics of Welfare. London, UK: Routledge, 2008. Print.