A Government Strategy for Busi

A Government Strategy for Business in Canada?

In a world that promotes free trade and downplays the role of government supports, the Canadian federal government and the provincial governments are quick to say that their role is not to “pick winners” in the economy. And yet this does occur. Federal aid to the auto industry in 2009 was presented, as it was in the United States, as a way of digging the economy out of the global economic slowdown. 
At the provincial level, in mid-December 2013, the Ontario government announced a government “investment” of about $220 million in Cisco Canada, a move that was projected to add 1700 jobs. Opposition leaders quickly noted that Novartis, which received $4 million two years previously, has announced that it was closing a plant in a Toronto suburb. And in late 2016, Bombardier received a complicated series of funding measures from Quebec and Ottawa, including a direct $1 billion investment, in a deal that some are saying totals $2.6 billion.
While the federal and provincial governments seem to be focused on companies, municipalities are taking a different approach by focusing on economic sectors. Ottawa-Carlton focuses on the high-tech sector. The city of Toronto focuses on ten economic sectors, ranging from financial services and fashion and apparel to food and beverage. It offers customized research, policy advice, and liaison with other agencies and promotes international alliances for these sectors.

Questions

1. Should government continue to subsidize certain firms? If so, what criteria should they use (job creation, importance to the economy, other factors)?

2. Which do you think is a better strategy for governments: a company focused strategy or an economic sector strategy? Defend your argument.

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