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Mcdonald's and Political Environment in Canada

In: Business and Management

Submitted By Leena1976
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THE POLITICAL ENVIRONMENT

Canada is a constitutional monarchy, with federalism and a democratic parliament, head by Queen Elizabeth II. With the Prime Minister’s advice, she appoints a Governor General, to represent her authority in Canada, as she resides in United Kingdom. The parliament is responsible to legislate and control the executive branch of the government, i.e. the Prime Minister and Cabinet, consisting of the Queen-represented by the Governor General, the House of Commons and the Senate. The federalism constitutes of 10 provinces and 3 territories and its structure divides government responsibilities between the federal government and the ten provinces. The federal government’s responsibilities include national defense, interprovincial and international trade and commerce, immigration, banking, monetary system, criminal law and fisheries. The three territories also have legislatures, but not sovereign and have fewer constitutional responsibilities compared to the provinces. Canada has a mixed market economic system. The system is unique since it has a combination of private and government control; or capitalism and socialism policies. In a socialist Canada, the principal means of producing and distributing wealth will be the common property of society as a whole. The government regulates most of the trade and businesses. This is to abolish labour exploitation, and to implement a planned approach to the relationship of human life with the natural environment. Poverty, insecurity and discrimination, rooted in capitalist exploitations are also ended, thus leading to a new society based on solidarity, equality and emancipation. Some socialist influences can be observed from the government’s intervention in the transportation system and railroads. Capitalism (liberal market) is proven in its free enterprise and property privacy. Individuals and businesses have the freedom to pursue their own economic interests and participate in making sovereign decisions on the country’s economic direction. The Canadian regulatory environment protects the freedom of establishing and running business. Private ownership of property is well protected and individuals and corporations have the rights to own consumer goods, and also goods used in production. The country’s legal systems are accessible by foreign investors, and limitations to private property rights are imposed when the government establishes monopolies and expropriate for public purposes. In the capitalist Canada, there is minimal government involvement in the economy, although generally there isn’t. This to ensure monopolies does not exist although monopoly is not in itself illegal unless there is a high market share allowing the firm (or firms) to substantially dictate market conditions and exclude competitors. Legal limitations are imposed on centralization of capital to balance of the power between the actually existing or emerging monopoly firms. In conclusion, Canada is an attractive proposition for McDonald’s as it offers enormous opportunity. Its GDP growth rate at 1.48% annually, per capita income of $ 36,444, estimated population of 34 million by 2010 as well as low unemployment rates, provides a good base for future growth. This is well supported by the continuous inflow of Foreign Direct Investment of 44.7 billion in 2010 which ensure stability and economic growth.
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