Over the past few years, Canada’s economy has done comparatively well and has demonstrated some resilience to the fluctuating global economy. However, Canada remains to be relatively less competitive with respect to other developed countries. In this paper I will attempt to take a closer look at Canada’s position in the global economy today and examine the relevant issues. Competition is an important driver of innovation and productivity growth. Looking at the domestic Canadian economy, perhaps one of the most significant barriers to a strong domestic economy is the lack of intense competition among domestic firms. There are many reasons for this.
First of all, the size of the Canadian economy is too small to support the development of large corporations. The US on the other hand, has about a ten times larger population, and therefore, a much larger market and demand are in place for larger multinational companies to build. As a result of the lack of sufficient domestic demand in Canada, only a small number of larger firms are developed in each industry. Furthermore, Canadian firms seldom treat research and development as a priority. Unlike in the US, innovation is not a corporate culture in Canada. This can be partly due to the lack of intense domestic competition, causing firms to spend resources on other areas instead of R&D because there is no real urge to innovate and maintain competitiveness.
The Term Paper on Was Soviet Union A Command Economy?
A command economy is one in which the co-ordination of economic activity is controlled and undertaken through administrative means rather than through the market mechanism (Ericson, 2005). Many aspects of the Soviet economy fit this description such as its organisational structure, the methods by which aims and directives were carried out and its lack of a use of pricing within its financial ...
The government also plays a major role in determining the level of domestic competition. In the past, the Canadian government had not been supportive to introduce rivalries in its domestic industries. There had not been any clear and well defined competition policies; there were however, numerous policies enforcing tariffs for imported products that had been protecting domestic firms from competition from abroad. Although some can argue that such protectionism was necessary in the starting phase of an industry, but Canada has still been maintaining some of these protection policies even today for well developed industries such as the cable and electricity industries. These protective policies do not promote domestic rivalries and therefore lead to a lack of productivity gain that can be achieved through competition. Although many of these protective policies are now non-existent anymore, what these policies had done already impacted and shaped the Canadian economy today to a certain degree.
An interesting observation from the absence of strong domestic economies is that most of Canada’s corporations are in fact merely branch plant operations of multinational companies with headquarters based in the US or in other countries. This is in part due to the fact that the Canadian economy fails to support the development of domestic giants because of the reasons discussed above. As a result, value-added activities, for example R&D, are not performed in Canada. The branch plant operations simply carry out non-strategic and non-value-added operations that do not give the county any competitive advantages or innovative drives. Furthermore, re-investment is limited in the Canadian operations because the majority of the resources are allocated to build the companies’ competitiveness, which is often done elsewhere. Besides a relatively non-competitive business environment, Canada’s labour force also lacks the competitive mindset.
Structural employment remains high, which is partly due to the existence of social assistance and unemployment insurance systems. Work incentives are low under the protection of the employment insurance program, which indirectly contributes in a higher than the desirable unemployment rate. Furthermore, unions and other similar groups do not promote many incentives for workers to stay competitive in the workplace by continuously learning and improving productivity. Countries that have been most successful in cutting unemployment are those that have improved incentives to work. Canadian’s immigration policies are one of the country’s strategies to boost its human capital. The potential economic benefits include the filling of domestic skill shortages and bringing in foreign competition from foreign labour market.
The Essay on How Do Domestic Factors Affect Foreign Policy Making
How Do Domestic Factors Affect Foreign Policy Making? What are the pressing problems of the presidency in foreign policy decision making, and what, if anything, can and should be done about them? There are several empirical and normative dilemmas associated with this question. However, mainly domestic factors affect American foreign policy. While forthright in asserting American interests, U.S. ...
However, recently the economic performance of immigrants has deteriorated, largely due to the ineffective integration of these immigrants into the domestic labour force. This is in turn because of the immigrants’ credentials are not fully recognized, as well as because of their lower proficiency in English and French. The Canadian working environment, when compared to that in the US, may not be attractive enough to highly skilled workers. This is primarily because of the large income gap between the Canadian and US labour market.
Workers with the skills and competitiveness are better off working in the US because they are able to earn a better income and have more opportunities for career development with larger and more competitive companies. Higher living standards and lower tax levels are some more examples of why working in the US is more attractive than working in Canada. Trade is another important issue to discuss when assessing Canada’s competitive position in the global economy. Free trade brings in competition from elsewhere into the domestic market, where local competition is relatively little.
In addition, it forces Canadian firms to become more productive in traded goods and services if they are to compete with other areas’ local vendors. Thus, free trade is a good way to introduce competition and to drive domestic productivity gains. One of the obstacles with respect to trade within Canada internally has traditionally been the many differences in provincial regulations. These barriers to trade have been gradually dismantled over the years, for example with the elimination of labour mobility restrictions. There also exist problems with Canada’s current position in the international market. Most of Canada’s exports are made up of natural resources.
The Term Paper on Canadian International Trade Canada Energy Nafta
Canada is great economic superpower that has yet to reach its potential. As the second largest nation by area, we possess vast natural resources. We are a massive importer and exporter on the world stage, who a play a vital role in the stability of the northern hemisphere. Through Canadas international trade, we export vast quantities of many different foods stuffs, minerals and manufactured goods ...
This is showing to be a concern because commodity prices for Canadian products have shown a downward trend from its peak in the 1970’s. In addition, a large majority of Canadian exports go to the US, and furthermore, most of these “exports” are in reality intra-corporate exchanges. These are more of processes of an integrated North American production system rather than of a true international trade. Thus, Canada’s international trade is not so favourable because it focuses more or less on a single market, the US, with only a limited array of products.
It is therefore important for Canadian firms to remain cost competitive against their US counterparts. Long term sustainability issues such as social and environmental factors also impact Canada’s long term position in the global economy. Facing most countries in the next few decades will be the problems of an aging population. Canada is relatively better prepared than other countries in terms of coping with an aging population. But nevertheless Canada’s fiscal position as well as pension burdens will come under tremendous stress when the baby boomers being to retire. There are concerns on whether a balanced budget is good enough and whether the current health care system is efficient enough to handle these problems.
It is important that the Canadian government begins to address these issues and plan ahead before it is too late to effectively deal with them. While many parts of Canada are free of environmental difficulties, there are a number of sometimes severe localized problems. Green house gas emission and environmental damages caused by industrial facilities in Hamilton are some examples of how environmental issues are becoming evident and significant. These will become future cost burden to the Canadian economy if not addressed by the government properly immediately. Canada needs to realize what the future for the Canadian economy will be in order to prepare for it and to exploit competitive advantages ahead of time. Currently the Canadian economy is relatively small and non-competitive in the global market.
The Essay on Global Environmental Issues
Global environmental issues, such as climatic change, global warming, pollution, species extinction and destruction of tropical rain forests hold unique place among other major international problems as it is one area that has transformative, comprehensive and long term impact on the future of entire world. For over a decade now the subject of these issues have become the common platform for ...
Much of this is due to the lack of domestic competition that drives productivity gains. Innovation from Canadian firms is limited, resulting in stagnant productivity improvements. The Canadian labour force is also relatively weak and the working environment relatively non competitive. In the future, Canada will be moving towards a service-oriented economy that continues to rely heavily on exports. The concept of competitiveness will become more and more crucial for the success of the Canadian economy. It is therefore imperative for Canadian businesses to continue to improve productivity and develop the culture of continuous research and innovation.
Intense domestic and foreign competition also needs to be in place to drive productivity gains. The role of Canadian government will be to make Canada an attractive place to work, live and invest. This will bring in valuable human as well as financial capital that will be conductive to achieving competitiveness. The government should also realize and deal with social and environmental issues as a matter of priority with a strategy to move ahead of other developed countries and avoid future burden on the economy when these issues start to become a bigger problem in the future..
