Government economic and political policies control the entry of goods
and services into the realm of the public, for example, drugs allowed
on the market, pollution control measures, ecological initiatives (disposal
of nuclear waste), automobile airbags. Political and economic policies
also influence prices of goods and services in public and private industry,
the amount of technological development in an industry, and who becomes
a trading partner. Interest rates and inflation resulting from such
policies can also affect the capacity of industries and educational
institutions to afford new equipment, skilled workers, or research and
development. When an economic trend leads to high interest rates and
trade is restrictive, the entry of technology into the market can be
retarded by costs that are prohibitive to many businesses. Then, the
competitiveness of Canadian industry is restricted, demand for workers
decreases and employment levels slump. When the economic trend is expansive,
companies can afford to take the plunge and buy the new technology that
will enhance their competition, boosting the need for workers to support
increased business.
Some deal with increased competition by consolidating or merging companies
to gain market share. Government policies can support or impede such
mergers. The mergers can result in downsizing and hiring of outside
consultants by these newly formed organizations. In turn, small businesses
spring up to meet the new demands.
Funding to educational institutions will impact the number and types
of programs offered, and the number of graduates in certain skill areas.
Political - economic policies that cut back funding or student quotas
can decrease the number of skilled workers available, causing increased
hiring costs.
Trade agreements such as NAFTA (North American Free Trade Agreement)
expand markets for Canadian exports and imports, affecting prices, wages,
unemployment and business relocation. Trade agreements can even redefine
a country's major industries. Once the political policies have removed
barriers to international trade, a company with waning sales can look
for a specialty niche, and look outside the country to import less expensive
goods and to find new markets for export. In other words, they can become
involved in global trade.
Canada Export Facts
Exports rose 11% from 1998 to 1999.
Of approximately 900,000 companies in Canada, 100 of them
account for 60% of the exports.
Seventy percent of exports are accounted for by small companies.
Exports to the United States grew strongly in 1999.
Eighty-five percent of merchandise exports went to the United
States in 1999.
Exports to Asia (Japan in particular) declined in 1999.
There was steep growth in auto exports which rose by 24.2%
and became a leading major export in 1999 (DFAIT 2000).
