Mid-Term Exam 40%

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Class Administration: Mid-Term
Grading Structure

• Mid-Term Assignment 40%

• 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
• Good Essay Writing Skills expected
• Spelling and Grammar Count – Proof Read Your Work
• 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 ►A federal state must
attempt to build a attempt to appease
national strategy. regional interests.
► Example: Canada
► Canadian government
must try to appease
must be seen to
Quebec to keep it in
develop a national Canada.
immigration policy.
► 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?
1. 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
 What are the challenges to
Canadian Federalism?
1. 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.
 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
► Itshall 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.
 Differences between US and Canada
► In Canada ► United States
► All powers not ► All powers not
specifically reserved specifically reserved
for the provinces are for the Federal
allotted to the Federal government are
government. 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
► 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
► Hascooperative 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. Industrial Incentive
Programs
2. Infrastructure
Assistance Programs
3. 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. To strengthen power of Federal authority.
2. Political motives.
3. Nation building.
4. 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, • National Sea Products
government intervention is • Chrysler Canada
generally considered to be • Massey Ferguson
counterproductive. • DEVCO
► Costly • Sydney Steel
► Ineffective
► Unfair
 Flaws of Regional Development
► Industrialincentive 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?