politics - governments' roles · learning outcomes 1. describe the world of business. 2....

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Politics - Governments' RolesBAM101 2015-02-03

Peter Forint BA, MBA, GBM

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Proposed Agenda

l Quizl Addendum / Course Outlinel In the newsl Chapter 3

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In the News: AAPL Profit

l “Earning a profit of $18 billion during the final three months of 2014, the latest Apple earnings report is the biggest ever from a publicly traded company.”

– http://etfdailynews.com/2015/01/29/apple-inc-nasdaqaapl-earnings-report-biggest-corporate-earnings-ever/

Why?l Video:

http://www.reuters.com/article/2015/01/28/us-apple-results-idUSKBN0L02QG20150128

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Tax Avoidance

l The Corrosive Effect of Apple’s Tax Avoidance– http://www.nytimes.com/2013/05/24/business/makin

g-companies-pay-taxes-the-mccain-way.html?pagewanted=all&_r=0

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Learning Outcomes

1. Describe the world of business.2. Understand the responsibilities of the three

levels (sometimes four) of government in Canada.

3. List some of the roles governments play in Canada and how they affect business.

4. Explain some of the Canadian laws that protect businesses and consumers.

5. List the most common taxes paid by businesses.

6. List some of the trends that are reshaping the political environment. 5

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FYI

l Chapter numbers of Seneca custom text are different than standard text– e.g. Seneca #3 is standard #1

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Extra Perspectives

1.Government2.Business3. Investor4.Citizen

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Remember PESTI

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l Political (Government)l Economicl Sociall Technologicall International

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Opening Story: Hybrids

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Summer Company

l Supporting student / youth entrepreneursl < 30 years oldl up to $1,500 up front to help with start-up costsl up to $1,500 when you successfully complete

the program requirementsl http://www.ontario.ca/Start%20a%20summer%

20company%3A%20studentsl http://www.futurpreneur.ca/

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Young Entrepreneurship

l www.futurpreneur.cal http://www.senecacollege.ca/research/HELIX/

– Health Entrepreneurship and Lifestyle Innovation Xchange… Incubator

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NETA PowerPoint Presentations to accompany

The Future of BusinessFourth Edition

Adapted by Norm Althouse,

University of Calgary

Copyright © 2014 by Nelson Education Ltd.

Politics: Governments’ Roles

Chapter 1

Copyright © 2014 by Nelson Education Ltd. Chapter 1

Copyright © 2014 by Nelson Education Ltd.

Making the Connection

Learning Outcomes1. Describe the world of business.2. Understand the responsibilities of the three levels of

government in Canada.3. List some of the roles governments play in Canada and

how they affect business.4. Explain some of the Canadian laws that protect

businesses and consumers.5. List the most common taxes paid by businesses.6. List some of the trends that are reshaping the political

environment.

Copyright © 2014 by Nelson Education Ltd. 15

Describe the world of business.


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What’s your definition of a

business?

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Textbook

}Business – An organization that strives for a profit by providing goods and services (products) desired by its customers.


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19Source: http://f-l-l.com/blog/

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20Source: http://the-real-leadership-lessons-of-steve.blogspot.ca/

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Business

“A commercially profitable

enterprise that works without

you.”– Brad Sugars, Action Coaching

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“Cashflow Quadrant”

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© Robert T. Kiyosaki and Sharon L. Lechter

Basic Terms} Business – An organization that strives for a profit by

providing goods and services (products) desired by its customers.

} 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.

} Risk – Potential for losing resources.


i.e. Investments

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l Toronto, Montreal best places to live, Economist says– 2 Canadian centres also rank 1st and 4th for

safety in North America, magazine finds– CBC News Posted: Jan 30, 2015 8:14 AM ET Last

Updated: Jan 30, 2015 4:36 PM ET l http://www.cbc.ca/news/canada/toronto/toronto

-montreal-best-places-to-live-economist-says-1.2937517

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Profit


Revenue – The money a company earns.

Costs – Expenses to generate the revenue.

Profit – The difference between revenue and costs.

Not-For-Profit


} A not-for-profit organization exists to achieve some other goal than the usual business goal of profit.

Understand the responsibilities of the three levels of government in Canada.


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Federal Government


Overseeing the Well-Being of CanadaSome of the authority of the federal government includes:1. Money and banking2. Trade regulation3. External relations 4. Defence5. Criminal law6. Transportation

Provincial/Territorial Governments


Protecting RightsSome of the responsibilities include:1. Administration of labour laws (with some exceptions)2. Education3. Health/welfare4. Protection of property and civil rights5. Natural resources6. Environment

Municipal Governments


DeliveringtheServicesSomeoftheresponsibilitiesinclude:1. Water,sewer,andwastecollection2. Encourageeconomicdevelopment3. Usebylawstoregulate

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Sometimes PPP or Public-Private-Partnership

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Canadian Constitution

l Paramountcy– Federal Laws Prevail– Constitutional Battles among governments

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Historical Role of Government in the Economy

l Canada has a mixed economy; our various levels of governments play a very large role in our economy

l From the start in 1867 the national policy was to force trade to flow east–west– John A. MacDonald and Railroad

l Tariffs were used to deter the natural north–south flow of goods

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Historical Role of Government in the Economy

l Canada has a mixed economy; our various levels of governments play a very large role in our economy.

l From the start in 1867 the national policy was to force trade to flow east–west

l Tariffs were used to deter the natural north–south flow of goods.

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WHY? Economic History

l French, English, Spanishl Economic Zones

– (North) Canada: Resources– (Middle) Northern USA: Manufacturing, Commerce– (South) Southern USA: Agriculture

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French, English, Spanish (1700s)

List some of the roles governments play in Canada and how they affect business.


The Governments’ Other Roles


CustomerCompetitor

Provider of Essential Services

Provider of Incentives

Taxation AgentRegulator

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Sustainable Business / Sustainable World (p. 80)

l What do you think is the responsibility of companies to protect our environment?

l What responsibilities to consumers have to ensure the products and services they are purchasing and using contribute to sustainability?

l What about government?

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Frank Stronach

l From one man shop to billionaire

l “Fair Enterprise” philosophy introduced in 1971:– Workers become owners– Managers become partners– Austrian-Canadian

39Sources: http://www.fraserinstitute.org

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MAGNA’S CORPORATE CONSTITUTION

l Our Corporate Constitution publicly declares and defines the rights of our employees, investors and management to participate in our profits and growth, while also imposing certain disciplines on management. These features strike a balance between employees, investors and management, while allowing us to maintain an entrepreneurial environment, which encourages productivity

l http://www.magna.com/migrated/en/pdf/Corporate_constitution.pdf

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Explain some of the Canadian laws that protect businesses and consumers.


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Protecting Creators (and Owners)


} Patents – Protection for inventors.

} Copyrights – Protection for creators of works of art, music, literature, or other intellectual property.

} Trademarks – Design, name, or other distinctive marks that a manufacturer uses to identify its products in the marketplace.

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Patents: Canada vs. USA

l First-to-File– Canada (and most

other countries)– it is important to file

applications as soon as possible

– must be new, inventive and useful

– higher life forms are not patentable, while lower life forms are

l First-to-Invent– USA– "anything under the

sun that is made by man" is patentable including business methods

43http://www.mcmillan.ca/Significant-Differences-Between-Canadian-and-American-Patent-Law

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Bankruptcy

l Text: The legal procedure by which individuals or businesses that cannot meet their financial obligations are relieved of some, if not all, of their debt

l Feds: Bankruptcy is a legal process designed to relieve honest but unfortunate debtors of their debts. At the end of the process, the bankrupt is released from the obligation to repay the debts they had when the bankruptcy was filed (with some exceptions).

44http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br01545.html

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Stakeholders

l Debtor – owes money (borrower)

l Creditors– are owed money (lender)

l Office of the Superintendent of Bankruptcy– Bankruptcy and Insolvency Act (BIA)– Companies’ Creditors Arrangement Act (CCAA)– Wage Earner Protection Program Act

l Trustee– Licensed by the OSB and are officers of the court to

administers proposals and bankruptcies45http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br01545.html

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Bankruptcy: Stakeholders

l Creditor: A person or business who is owed money, goods or services

l Preferred Creditor has a first claim to any funds that are available

l Secured Creditors take collateral for the extension of credit, such as when a car or house is purchased

l Unsecured Creditors give credit but who do not take any security for the debt owed them


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Warning to Individuals and Small Business Owners

l Always Pay the Government! l The government is the ultimate creditorl Officers of the company are personally liable to

the government for source deductions, HST, etc.

l There are steep penalties for missing these by even one day as well as interest to be paid

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Who owns the business under a bankruptcy?

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Bankruptcy: Proposal

l A proposal is an offer to creditors to pay a percentage of what is owed over a specific period of time, or to extend the amount of time to pay off the debt, or a combination of both. Creditors vote to accept or reject the proposal.– Consumer proposals– Commercial proposals

l Once all the terms of the proposal are met, the debtor is legally released from the debts included in the proposal.


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Who owns the business under a proposal?

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One more thing about “Honesty”

l “…it’s not actually illegal to run a bank, or any other company, into the ground.”

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Source: http://www.economist.com/blogs/economist-explains/2013/05/economist-explains-why-few-bankers-gone-to-jail

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Tort Law

l A civil or private act that harms other people or their property via negligence or deliberate intent– Physical injury, emotional distress, invasion of

privacy, libel, defamation, etc.l Some acts are both torts and crimel Definition of negligence is leaves much room

for interpretation… therefore controversial

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Protecting Consumers


1. Right of choice.

2. Right of safety.

3. Right of honesty.

4. Right to be informed.

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Basic Terms


} Consumerism – A movement to increase the rights and powers of buyers vis-à-vis sellers.

} Warranties – A guarantee of performance (either implied or expressed).

} Product liability – Responsibility of the manufacture and sellers for the defects in the products they sell.

} Strict liability – Manufacturer/seller is responsible for any damage or harm done caused by defective products.

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Seller’s Rights

l Introduce any product, size, style, etc. even hazardous if comes with warning

l Set price so long as no discriminationl Promote, so long as not unfairl Include any incentivel Formulate any message, so long as not untrue

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Irrational Persuasion

l Psychologyl Play to fearl Subliminal communication

– Product Placement– Buzz Marketing

l Dependence Effect– Does advertising create wants?– Is that good or bad?

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Seven Sins of Greenwashing

1. Hidden Trade-off: Flex fuel vehicles2. No Proof: 3rd party3. Vagueness: “All natural”4. Irrelevance: “CFC-free”5. Lesser of Two Evils: Organic cigarettes6. Fibbing: False Energy Star claims7. False Labels: Not certified

© TerraChoice Group Inc.

List the most common taxes paid by businesses.


Taxes


} Income taxes

} Property taxes

} Payroll taxes

} Sales taxes

} Excise taxes

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Do businesses pay income tax?

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Businesses pay taxes on

net income a.k.a. profit.

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Do businesses pay HST?

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List some of the trends that are reshaping the political environment.


The Future of Politics and Governments’ Roles


} Increased interest and investment in clean technology projects.

} Increase looking for skilled labour.

} Governments are expecting more transparency in marketing, operations, and corporate social responsibility.

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Next Class

l Quiz: Chapter 3– 10 multiple choice questions in 10 minutes

l Politics: Governments’ Roles

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politics - governments' roles · learning outcomes 1. describe the world of business. 2....

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