Part 1.

A: Introduction & Governments’ Roles

 Learning Outcomes

 Introduce some basic business terms

 Explain how business benefits society
 Identify potential societal concerns about business
 Identify the responsibilities of the three levels of government in
Canada and how this affects business
 Explain some of the Canadian laws that protect businesses and
consumers
 Identify forms of taxation
 Key Terms to Get Started

Business: an organization that strives for a profit by providing goods and services to
satisfy society’s needs

Goods: are tangible items manufactured by businesses, such as tablets

Services: are intangible offerings that we experience. Such as hospitals,

governments, lawyers, restaurants
 The Basics: Profit

Revenue: the money a company earns from providing services or selling goods to a
customer

Costs: Expenses for rent, salaries, supplies, transportation and many other items
that a business incurs from creating and selling goods and services

Profit: the money left over after all expenses are paid
 Business Basics

Standard of living – Measurement of outputs of products (private and public) that people can
buy with the money they have.

Quality of life – General level of human happiness. How do we measure happiness?

Risk – The chance that an investments actual return will be different than expected. Potential
for losing resources (i.e. time, money) or be unable to accomplish organizational goals.
 Not for Profit Organization

Remember… not all businesses pursue profits…

An organization that typically exists to achieve a

social goal or goals as opposed to the usual
business goal of profit
 Benefits and Concerns

Business Offers Many Benefits

• Array of goods, employment, quality of life

Business Offers Many Concerns

• Profit vs. social concerns – health and safety,
environment, social disruption
 The Business Environment

Five factors affect the business environment:

1. Economic
Size and health of economy must be considered when making business decisions
2. Competitive
High levels of competition force businesses to cut costs, develop new products, increase
marketing efforts
3. Global
Access to global markets increases competition and need to enhance skills
4. Technology
Technology innovation has changed how businesses produce and distribute goods and how we
communicate.
5. Social
Changes in demographics influences what products companies offer
 Federal Government: Overseeing the Well Being of Canada

Federal Government has the Authority over:

• Money and Banking • Criminal Law

• Trade Regulations • Employment Insurance
• External Relations • Copyrights
• Defense • Transportation

Canada’s financial system is regulated and wealth is collected, transferred and

spent to provide Canadians with one of the highest standards of living.
Provincial and Territorial Governments: Protecting Rights
Municipal Governments: Delivering the Services

Deliver services such as:

• Water
• Sewer
• Waste Collection

Encourages:
• Economic Development

BYLAWS = REGULATION
 Governments’ Other Roles

Governments as tax agents:

• Income taxes, sales taxes, property taxes and sin taxes

• The federal government provides significant financial support to assist the

provinces and territories to provide the program and services they are
responsible for in the form of transfer payments.

Three main transfer payments (equalizing wealth) include:

• Canada’s health transfer (CHT)
• Canada social transfer (CST)
• Equalization program

Providers of incentives Customer and Competitor

 Governments’ Other Roles Continued

Governments as regulators:
• Protect Canadian interests
• Create competition
• Protect the consumer
• Promote social programs
• Protect the environment
Governments as providers of
essential services:
• Reliable National Defense
• Transportation means: roads
• Hospitals
• Economic development
• Safe drinking water
• Effective Police service
 Protecting Businesses and Consumers

Patents: gives an inventor the exclusive right to

manufacture, use and sell an invention for 20 years
• Need to meet requirements of being new, unique
and useful.
• Protects authors, inventors and creators
Includes: printed material (books, magazine articles,
lectures), works of art (art, photographs, and movies)

Trademarks: a design, name, or other distinctive mark that is used

to idenitify products.
• Creates uniqueness in the minds of consumers
 Protecting Businesses and Consumers
Consumer Protection
• Consumerism - reflects the struggle for power between buyers and sellers. Movement
seeking to increase rights and power.
• Warranties
• Product Liability Law
• Competition Act:
• Parallel pricing
• Quota selling
• Market sharing
• Product specialization

Bankruptcy
• The legal act by which individuals or businesses that cannot meet their financial
obligations are relieved of some, if not all, of their debt.

Deregulation
• The removal of rules and regulations governing business competition
 Taxation
Income taxes
• Based on income of businesses and individuals

Property taxes
• Imposed on real and personal property and based on an
assessment

Payroll taxes
• Collected by the employer and remitted to the federal
government (DEDUCTIONS)

Sales taxes
• Levied on goods and services when they are sold
(PERCENTAGE OF THE PRICE)

Excise taxes
• Taxes imposed on specific items like gasoline, alcohol, and
tobacco
 The Future of Politics

• Increased interest and investment in clean technology projects

• Increased need for skilled labour – Immigration and Indigenous
engagement
• Governments are expecting more transparency in marketing,
operations, and corporate social responsibility
• Capitalizing on public-private partnerships (P3s) to harness
innovation and access to capital for public infrastructure projects
• Lack of confidence in markets
• An impactful and tumultuous time