Canadian Global Issues

BRIEF HISTORY The first people that lived in Canada were natives, primarily the Inuit (Eskimo). The Norse explorer Leif Eriksson may have reached the shores of Canada in 1000, but the actual history of the white man in the country actually began in 1497. This was when “John Cabot, an Italian in the service of Henry VII of England, reached Newfoundland or Nova Scotia. Canada was taken for France in 1534 by Jacques Cartier. France’s colonization efforts were not very successful, but French explorers by the end of the 17th century had gone beyond the Great Lakes and south along the Mississippi to the Gulf of Mexico. (Canada) Hudson’s Bay Company an English outfit had been established in 1670 and began exploiting the fisheries and fur trades. Over time, a conflict began to develop between the French and English and subsequently in 1713 Newfoundland, Hudson Bay, and Nova Scotia (Acadia) were lost to England. Later that century, during the Seven Years’ War (1756–1763), England extended its conquest, and Quebec fell on Sept. 13, 1759. The Treaty of Paris in 1763 gave England control.

At that time, Canada’s population was nearly all French, but over the next few decades thousands of British colonists immigrated to Canada from the British Isles and from the American colonies. In 1849, Canada won the right to self-government. By the British North America Act of 1867, the dominion of Canada was created through the confederation of Upper and Lower Canada, Nova Scotia, and New Brunswick. In 1869, Canada purchased from the Hudson’s Bay Company the vast middle-west (Rupert’s Land) from which the provinces of Manitoba (1870), Alberta (1905), and Saskatchewan (1905) were later formed.

In 1871, British Columbia joined the dominion, and in 1873, Prince Edward Island followed. The country was linked from coast to coast in 1885 by the Canadian Pacific Railway. (Canada) VITAL STATISTICS Population (2009 est. ): 33,759,742 (growth rate: 0. 8%); birth rate: 10. 2/1000; infant mortality rate: 4. 9/1000; life expectancy: 81. 3; density per sq km: 3; Languages: English=59. 3%, French =23. 2% (both official); other=17. 5%; Ethnicity/race: British Isles origin 28%, French origin 23%, other European 15%, indigenous peoples and Inuit 2%, other, mostly Asian, African, Arab 6%, mixed background 26%. (Canada) TRADE

Canada, our neighbor to the north, is one of our (The United States) most important trading partners. Covering most of the northern part of the North American continent and with an area larger than that of the United States is a federation of ten provinces and three territories. Formally considered a constitutional monarchy, Canada is governed by its own House of Commons, the Canadian prime-minister – Stephen Harper since 2006 – and the governor-general – David Lloyd Johnston since 2010 – who is officially the representative of Queen Elizabeth II of England, but acts only on the advice of the Canadian prime minister. Canada) One of the partners in NAFTA (The North American Free Trade Agreement) along with the United States and Mexico, Canada was the first step in this trading bloc when the United States and Canada signed the Canada-United States Free Trade Agreement in 1987. In 1994 that agreement was extended to Mexico. NAFTA created the world’s largest trading block at that time, combining 3 countries with 443 million people and a combined GDP of $15. 4 trillion into a single market. (Steiner, 379) The purpose was to increase trade among the three nations. That has indeed happened.

It wasn’t without controversy, though, United States labor unions were against it from the start, worrying about job losses as American companies moved to Mexico to take advantage of the lower wages that Mexican workers earned. The textile industry was hit hard; however, analysts agree that while jobs have been lost to Mexico, roughly an equal number have been created in the United States in the production of exports to Mexico. “The Carnegie Endowment for International Peace concluded that NAFTA produced a net gain of 270,000 U. S. jobs. ” (Steiner, 380) in Mexico there was a different story, the number of farm jobs there plummeted from 9. million to 6. 7 million in 2004 and continue on the down slope today. Workers on both sides of the border faced losses and gains. The trucking industry voiced concerns about Mexican trucks having free access to U. S. markets. They made claims of operating below U. S. safety standards causing the U. S. Department of Transportation to issue rules allowing Mexican truckers to begin operating in the United States. The disputes made it all the way to the Supreme Court where the justices ruled unanimously that the government could open U. S. highways to Mexican truckers. Despite bitter opposition, the Department of Transportation launched a pilot program allowing about 100 Mexican trucking companies full access to American highways. ” (Steiner, 381) An evaluation by the Business Roundtable, a group of CEO’s of multinational corporations, was positive, briefly it stated: “As expected NAFTA has had a net positive impact on U. S. output of goods and services…As expected NAFTA has increased U. S. exports to Canada and Mexico…As expected NAFTA has not appreciably increased U. S. imports from Canada and Mexico…As expected NAFTA’s impact on employment has been positive. (Steiner, 381) MULTINATIONAL CORPORATIONS One of the worlds’ most recognized names for liquors is The Seagram Company Ltd. It was a large corporation headquartered in Montreal, Quebec, Canada that was the largest distiller of alcoholic beverages in the world. Toward the end of its independent existence it also controlled various entertainment and other business ventures. Seagram wanted to branch out into entertainment business. Bronfman, Jr. , the CEO, used the proceeds of the sale of their DuPont stake ($9 billion) to help acquire Universal Studios, MCA, PolyGram, and Deutche Grammophon.

Seagram also gained control of a number of Universal theme parks. The Seagram assets have since been acquired by other companies, notably: PepsiCo, Diageo, and Pernod Ricard. (Seagram) Seagram’s Corporate Social Responsibilities (Steiner pg. 133) are serious business – employees note that “it is truly a pleasure to work with co-workers,” who are said to be “the best trained” in the industry. “Overtime is done only when necessary,” which makes possible a vibrant social life among employees, with “softball teams and golf teams” and group participation in local charities.

Seagram’s is sensitive too – employees take mandatory “sexual harassment, diversity, and value” training course. (Vault) Another large company with Global leadership is Rio Tinto Alcan – also located in Montreal is the global leader in the aluminium business. They are one of the world’s largest producers of bauxite, alumina and aluminium. Sustainable development principles guide their actions and decisions. Health, safety and environmental excellence are the top priorities of their Corporate Social Responsibilities. (Steiner pg. 33) Alcan started in 1902 as Northern Aluminium Company, the Canadian subsidiary of the Pittsburgh Reduction Company (later Alcoa). It was renamed Aluminium Company of Canada in 1925 and separated from Alcoa in 1928. Rio Tinto’s aluminium business started with Comalco in Australia in the mid 1950s. Rio Tinto bought Comalco in 2000, and the company was renamed Rio Tinto Aluminium in late 2006. In late 2007, Alcan and Rio Tinto Aluminium joined forces to create Rio Tinto Alcan, the aluminium industry’s new global leader. (Rio) FOREIGN DIRECT INVESTMENT

The measure of activity and power of multinational corporations is the amount of capital they inject into foreign economies, called Foreign Direct Investment, or FDI, and is measured as the dollar value of funds invested by a parent corporation for starting, acquiring or expanding an enterprise in a foreign nation. (Steiner pg. 339) Canada is in a quandary. Our lackluster record in attracting foreign direct investment reduces competition in Canadian markets for investment and talent that comes along with new management. Meanwhile, Canadians are reaping economic benefits from involvement in international markets.

All this suggests that Canada should look at its policies to deepen our global attractiveness and make sure that we are open to inbound and outbound capital flows. Recent tax changes that have reduced Canada’s corporate income tax rate and withholding tax on interest paid to non-residents helps attract investment as well as grow Canadian multinationals. With emerging markets becoming an increasing source of international investment, many state owned enterprises and sovereign wealth funds are buying assets in Canada, a phenomenon that is not new but becoming more important than in the recent past.

In some cases, state-owned enterprises have played an important role in growing Canada’s industrial base, including several in the resource sector such as Statoil ASA (majority-owned by the Norwegian government), Abu Dhabi National Energy Co. (also known as TAQA), Korea National Oil Corp. , PetroChina Investment Co. and some previously state-owned enterprises like BP PLC, Total SA and Canada’s own Petro-Canada. In some cases, the government has already taken action to protect Canada’s interest. When MacDonald-Dettwiler and Associates Ltd. as involved in a takeover, Canada blocked the sale for national security reasons. The company did have technology, Radarsat 2 satellite, that could serve an important role in national defense and Canada was reluctant to let a United States company control it. G8 (GROUP of EIGHT) formerly G7 The intergovernmental organization that originated in 1975 through informal summit meetings of the leaders of the world’s leading industrialized countries (the United States, the United Kingdom, France, Germany, Italy, Canada, and Japan).

Canada did not attend the initial meeting in 1975, and the president of the European Commission joined the discussions in 1977. Beginning in 1994, Russia joined the discussions, and the group became known as the Group of 8 (G8), or the “Political Eight”; Russia officially became the eighth member in 1997. The Group of 7 (G7) convenes when the agenda is limited to economic and financial issues. When non-economic issues such as terrorism, drug trafficking, human rights, regional security, and arms control dominate the discussions, the G8 is convened. Mingst) In the 1990’s an anti-globalism movement formed. This group is “against a global economy directed by markets, corporations, trade-agreements and capitalist-dominated international financial institutions. ” The movement was active with labor unions, human rights organizations, environmentalists, religious orders…animal rights activists and anarchists opposed to any overarching world order. It first made its presence felt in 1999 when 50,000 activists gathered to protest World Trade Organization meetings in Seattle and street riots broke out.

Two years later at a Group of Eight meeting in Genoa, Italy, as many as 100,000 came to protest, again rioting broke out leading to the death of one protester. The movement has quieted down considerably since then over concerns of terrorism at street protests and protests against trade became awkward after the World Trade Center attack of September 11, 2000. But away from the public view the movement has proven durable, growing in numbers and connectivity. Its membership is united against the tyranny of neo-liberalism “a term that means both the philosophy and the specific practices on which current global economic expansion is based. (Steiner 102-103) HEALTH MAINTENANCE ORGANIZATIONS Managed care is the primary form of health maintenance organizations or HMO’s. An HMO includes an insurer and a network of physicians, hospitals and services such as labs. Corporations contract with them and pay a fixed monthly or annual fee per employee in return for a full range of medical care. To compete, HMO’s must control costs, and they do by limiting expensive specialists and treatments. This idea took hold and multiplied quickly. The meteoric rise of managed care and the diagnosis-related groups or DRG’s imposed by Medicare made cost-cutting the inevitable conclusion.

The mergers that swept through the health care system are an attempt to reduce per-unit costs by economies of scale by controlling ever larger market shares. (Steiner, 248-249) We hear a lot of demands that government do something about the high cost of health care, including insurance. There are many ideas out there, but the most persistent is that we ought to emulate Canada’s national health care system. In Canada, all medical care must be provided by public institutions. Funding for the clinics and hospitals comes mostly from the national government, but the provinces are in charge of providing health care services.

Private health care providers are completely outlawed. Since doctors are employed by the state, no one in Canada has to pay for care. Sounds tempting, doesn’t it? Unfortunately, what sounds too good to be true usually isn’t true. First, of course, the costs would be covered by someone: you and everyone else who pays taxes. The demand for such services increases, bringing about shortages. Guess what’s been happening in Canada? According to a September 14, 2004 Reuters report, the shortage of health care services has reached crisis proportions in Canada.

Paul Martin, the Canadian Prime Minister, is quoted as saying, “Few would dispute the prevailing reality of our time: people in this country are increasingly anxious about their ability to get in to see the right health professional at the right time. ” (Canadian) But whatever else we do, any discussion about health care options in America should start with the understanding that we don’t want anything remotely similar to Canada’s system. Wouldn’t it be something if we found ourselves traveling south to Mexico for our critical surgeries? (Canadian) CONCLUDING OBSERVATIONS Canada is one of our closest allies.

Their beginnings are similar to ours, their government is still a monarchy, but the Queen is really just a figurehead, the prime minister – wields the power – so, absent the Queen, theirs’ is a democracy. The corporate systems are similar, and they have a health care system that is broken, ours is going to break us. All things considered, I think I’ll stay in the United States. Works Cited “Canada: History, Geography, Government, and Culture a€” FactMonster. com. ” Fact Monster: Online Almanac, Dictionary, Encyclopedia, and Homework Help a€” FactMonster. com. N. p. , n. d. Web. 12 Apr. 2011. ;http://www. factmonster. om/ipka/A0107386. html#Government;. “Canadian Socialized Medicine: an Example of How Not to Solve Health Care Problems. ” Welcome to NeuSys, Inc.. N. p. , n. d. Web. 10 Apr. 2011. ;http://www. neusysinc. com/columnarchive/colm0220. html;. Mingst, Karen. “Group of Eight (G8) (international organization) — Britannica Online Encyclopedia. ” Encyclopedia – Britannica Online Encyclopedia. N. p. , n. d. Web. 11 Apr. 2011. ;http://www. britannica. com/EBchecked/topic/1014329/Group-of-Eight-G8;. “Rio Tinto Alcan – Contact us. ” Rio Tinto Alcan – Home Page . N. p. , n. d. Web. 10 Apr. 2011. ;http://www. riotintoalcan. om/contact_us. asp;. Steiner, John, and George Steiner. Business, Government, Society: a managerial perspective, text and cases. 12th Ed. ed. Boston: mcGraw-Hill Irwin, 2009. Print. “The Seagram Company Ltd. — Company History. ” Find Funding with Banks, Investors, and Other Funding Sources | FundingUniverse. N. p. , n. d. Web. 10 Apr. 2011. ;http://www. fundinguniverse. com/company-histories/The-Seagram-Company-Ltd-Company-History. html;. “Vault. com Error Page. ” Vault. com Error Page. N. p. , n. d. Web. 10 Apr. 2011. ;http://www. vault. com/wps/portal/usa/companies/company-profile/Seagram-Company? companyId=1058;.