Business and Government Relations

Business and Government Relations

The term Canadian federalism refers to the current and evolving structure of Canada's federal government. Including the federal government and the ten individual provinces, Canada has a total of eleven levels of government (Hachard, 2020). The Canadian Constitution is the source of law for Canada's eleven provincial and territorial governments. In this paper, I will focus on Ontario Province which is situated in Eastern Canada near the border. The paper will also cover the impacts of Canadian federalism on cross-border trade and how it has affected different government relations. In relation to this assignment, I chose Ontario because it borders the US and when it comes to producing nickel and platinum group metals, Ontario ranks in the top ten worldwide. 

Canada's federal system has swung wildly between highly centralized and highly decentralized models. Several factors in the political, economic, and social spheres have contributed to this. For a short time after Confederation, preference for a highly centralized administration has been in effect. Ontario province has been on track with the states in terms of influence and cross-border trade. The creation of largely self-sufficient provincial economies has a direct result of provincial authority over natural resources. Ontario's government has gained prominence and fame due to the province's substantial manufacturing sector and cross-border trade. 

In Canada, provincial authority over private property and civil liberties have replaced federal authority as the negotiating power in cross-border trade. If a commercial issue is not explicitly within Parliament's control, then it is delegated to the provinces. All commercial and business activity inside a province is subject to provincial control. There is a chance that the Federal Parliament can assert some specific power, but if it fails to do so, the provinces will take over by default. The primary limitation on provincial power is that it can only be used for things in the province. When a province's authority appeared to be reaching beyond its borders, the courts imposed or upheld a check on that authority. That is the primary judicial roadblock Ontario has encountered in cross-border trade. However, the requirement has also been interpreted flexibly by the courts, so that a law may have effects outside the province without being invalidated so long as it has a plausible connection with a matter in the province, so long as it can be said that it seemed to be directed as a matter in the province. As long as the law is aimed at something within the Ontario cross-border trade, those side effects are deemed to be merely incidental, according to the courts. 

The federal government is limited in its ability to regulate businesses to only occur within its borders, hence it is often compelled to focus on trade between provinces and between countries. The federal government has done something very important by occasionally saying, that it will put mandatory rules on inter-provincial deals and a local dealer can opt in willingly. It has been ruled legal in some jurisdictions. Producing cars specifically for export is one such case. The manufacturer must conform to federal standards if the legislature so decides. Once that happens, it is considered the norm in Canada. Such a narrow focus allows the Federal Parliament to regulate business activity inside Ontario province and cross-border trade. 

The federal government can only take so many initiatives or make so many decisions without any input from other entities. For the federal government to implement almost any policy, it must first win over the provinces. The government can control cross-border trade if it wants to. The potential for duplicative and even contradictory rules is a real concern. It is not just the federal government and individual provinces that can have divergent rules and requirements that cause problems (Liu, & Yawson, 2020). Thus, in Canada, the difficulty has been in coordinating policy with the administration. 

Take the example of the regulation of the securities market. No central authority oversees the Canadian stock market. Provincial governments are responsible for overseeing the securities industry. The securities authorities in each Canadian province have made great strides toward harmonizing their rules and establishing universal norms. Agreements and accords between the federal government and provincial and territorial governments have been developed to try to establish policy coordination between the federal and provincial levels of government. 

If a treaty is to be legally binding in Canada, it must first be ratified by parliament. Treaty implementation must respect the Constitution's separation of powers, therefore if the issue fell under provincial jurisdiction, it was up to the provinces to decide how to execute the treaty.  However, despite much criticism, Canada's legal system continues to uphold that conclusion. So, if a treaty calls for a change in domestic legislation that falls under provincial jurisdiction, the provinces would be responsible for making that change and in international trade. According to the Extent of Obligations Clause of both the Canada-United States and the North American Free Trade Agreement, the federal government of Canada is responsible for ensuring that Ontario complies with the terms of these agreements. In the end, the provinces agreed to comply willingly, meaning that they would change any of their laws that were at odds with the requirements of the Canada–United States and the North American Free Trade Agreement. 

However, if a provincial law in Canada conflicts with certain federal requirements, the Canadian cabinet can pass a regulation to supersede the provincial law. Regulations for the sale and distribution of alcoholic beverages were the primary focus of this clause. Alternately, the federal government must rely on the criminal law or the residual power known as the Peace Order and Government Power to implement legislation. Even though the pace of decentralization in Canada has slowed in recent years, the movement itself remains positive. In other words, the transfer of authority to the provinces, especially the four major provinces, is a lengthy process. The political philosophy that Canada's provinces should be treated as independent states is gaining ground across the country. Taking the spending power of the federal government into provincial jurisdiction, the ability to spend money is increasingly seen as undesirable without the approval of the province (Han, Ngai, & Sheedy, 2022). There should be further expansion, I believe financial resources to take initiative on your own without any involvement from the federal government. Consider the past recent years, Ontario has been independently collecting its business income tax using a method not depending on the central government. 

The current state of trade agreement implementation is not a contentious issue because the four major federal political parties agree on it Canadians as a whole and their provincial governments support free trade. Because of this, discussions concerning who has the authority to carry out trade agreements have not been a major problem in Canada right now. As a result of previous judicial decisions concerning the treaty-making power, the trade and commerce power, the Peace Order, and the Good Government clause, the role of the provinces in Canadian foreign trade policy is somewhat unclear under the Canadian constitution. Therefore, it is necessary to assess provincial institutional characteristics such as the executive to comprehend local action. Provincial CEOs are generally unconcerned or only somewhat interested in issues related to their province's international trade strategy. This is not to say that premiers and cabinet members do not care about trade policy. Rather, it is that when they do become involved, it is usually in negotiations with other federal and provincial ministers or senior officials. 

The executive serves as both an institution and an agency mechanism, carrying out the will of influential political and bureaucratic actors. The NAFTA discussions are a case in point, where Ontario's activities were notable. Things like cabinet hearings that led to a critical report criticizing NAFTA and the government's decision to legally dispute parts of the deal were part of this process. Ontario's position on NAFTA cannot be interpreted in terms of growing antagonism to the impending trade deal, nor alone to a shift in Ontario's trade policy preferences. Instead, federal-provincial fiscal difficulties and internal bureaucratic rivalries dictated the province's position among executive members. 

Peterson and other high-ranking executives assumed that Western Canada and Quebec would side against Ontario in any negotiations about electoral support. But the federal decision hurt Ontario's credibility with Ottawa and the other provinces during FTA talks. Even while Ontario representatives were present for briefings and discussions, they refused to engage in any substantive way until the very end of the bargaining process. It would be unfair to say that the federal government did not adequately defend Ontario's interests, but the province did not do enough to safeguard industry concerns in negotiations with the federal government. For Ontario, the Auto Pact on cross-market trade ensured that its largest export industry, automobiles, and parts, would have access to the US market. 

Cross-border connections may also be of interest to international organizations. As an example, the European Commission is instrumental in promoting cooperation between actors on different levels of government across borders. The Great Lakes intergovernmental conference between the United States and Canada is an excellent illustration of a bilateral international agreement designed to improve relations between two countries. To resolve any conflicts that may arise regarding the use of the Great Lakes, the federal, provincial, state, and municipal governments and agencies, private sector organizations, interest groups, and conservation authorities from both Canada and the United States convene at the International Joint Commission for the Great Lakes in North America. The results of competition are disintegration rather than unity. For political actors to effectively serve their voters, they must operate at the national level, and it is impossible for them to simultaneously establish cooperation links with other political players across borders. Governments at all levels across borders will be unable to establish cooperative procedures for the joint production of policies. That view is an example of the competition hypothesis, which is based on the most common paradigm in urban political economy. Whenever national governments download policy duties, decentralize, or organize competition for resources, local and regional governments compete with one another to get the funds necessary to meet the challenges posed by these shifts in power. There is a hard limit imposed by the market on what municipal governments can do. The author of City Limits argues that municipalities, states, and the Canadian province of Ontario have few policy options due to the structure of the market as a whole. 

The federal governments of both Canada and the United States are now used to the free trade conditions that exist. There have been several shifts on both sides of the boundary. The policies pursued have all had the overarching goal of achieving financial stability and lowering the deficit (Ducci, 2019). The free trade agreements looked to redefine the relationships between the federal, state and provincial, and local levels of government, while also adding new pressures on the federal level of government. The NAFTA treaty and its ratification process in Canada appeared to alter the traditional federal-provincial power structure (Brisley, 2018). Some industries, such as those involved with textiles and clothing, agriculture, and services, are beyond the purview of the federal government. Furthermore, the federal government lacks the authority to fully enact such treaties. However, Canada's federal government is responsible for adhering to NAFTA and "must ensure that all essential measures are taken to give effect. When it comes to putting the treaty into practice in Canada, the federal and provincial governments are both legally obligated to work together. Since international panels play a significant role in the dispute settlement mechanism, their rulings are binding in federal courts despite being made outside of those courts. The legal foundations of both NAFTA and the FTA are separate from those of domestic law. While this serves to preserve the constitutionality of domestic laws, both foundations obligate the federal government to carry out international judgments and rules. This means that federal and provincial governments' policy space is constrained and narrowed due to increased scrutiny from the federal and international levels. 

In reality, just a handful of complicated cross-border relationships have emerged through grassroots efforts alone (Henderson, 2018). Cross-border collaboration never occurs except in response to pressing domestic issues, and even then, it is only possible thanks to the initiative of enterprising individuals, the involvement of a consular official, or both. For example, the IJC has failed to broaden its impact in the Great Lakes region beyond its original environmental policy mandate. The "Border Kids" program is yet another initiative of the Canadian Consulate General in Detroit that involves cooperation across international borders. About a thousand eighth-graders in Canada and the United States are the intended audiences for "Border Kids," a documentary that explains the legal differences between the two countries. There was no growth in this program. The Canada-United States Business Association is another transnational group that has been active for almost four decades. It encourages networking between the Detroit, and Ontario corporate groups. 

The collaboration between these two entities resulted in an upgrade of the nation's infrastructure for travel and communication (including highways, sewers, water mains, and fiber-optic cables). In addition, the County established Company Assistance Centres to help local firms with tasks including site selection, licensing, business planning, marketing, and financing. The county staff also assists the neighborhoods within the county. They aid cities to determine what tax and abatement structures will be most appealing to businesses trying to relocate, and they supply other services that are necessary for companies on the lookout for a new home. When it comes to international trade, Ontario is a formidable competitor. This ranking is now used as a promotional tool, and comparative marketing publicity is used to bring in new companies. Macomb County, Michigan, looks to southern Ontario, Canada, for new business opportunities. Its objective is to capitalize on its closeness to key markets and relatively low tax rate. 

To prevent future incidents like the illegal blockade of Windsor's Ambassador Bridge, which forced the closure of factories, reduced shift hours, and halted billions of dollars worth of trade, lawmakers passed a bill empowering law enforcement to better protect international borders, international airports, and other transportation infrastructure vital to international trade. The bill's passing demonstrates to the rest of the world that Ontario is ready to do business and intends to keep doing so. To ensure that people can continue working, commodities can continue traveling, and businesses can keep producing, we have taken measures to defend our borders from potential illegal disruptions. 

In addition, the law gives law enforcement the authority to immediately suspend driving privileges and car registrations, collect license plates from vehicles involved in illegal blockades, and remove and store any objects used to create such a blockade. Ontario's connection to the rest of the world and the hundreds of millions of dollars in daily trade that it supports are made possible by its secure and accessible international border crossings. Another difficulty is the shipping of goods across international borders ( Chen et al., 2019). The trucking industry is one of the untold tales of the American West. The province of Ontario is suffering from a lack of truck drivers. The United States has recently implemented several laws that make it less appealing for truck drivers to travel across foreign borders. As well, a lot of agreements with transport companies are done on the fly and do not get evaluated by legal. Even with an agreement in place, transportation companies will choose the highest bidder. There needs to be transparency in Ontario on all transportation and vendor agreements. Check their company records and connections to see if there is any clarity there. In light of the current uncertainty, it is also important to strive to lock in prices whenever possible. The United States's unexpected imposition of tariffs earlier this year on national security grounds and Canada's retaliation have increased the likelihood of invoking force majeure provisions to avoid fulfilling contractual commitments. 

Because steel for these projects may cross the border multiple times for finishing, officials argue that tariffs are also an issue in the realm of huge infrastructure projects. As in, How often do they anticipate having to pay duties? This should happen as infrequently as possible, he argues. He also thinks it's a good idea to reevaluate any current agreements with American vendors (Kellerman, 2021). Since the Trump administration is so uncertain, "it is in both parties interest. The international advisors state that the potential for increased expenses due to reciprocal trade restrictions should be accounted for in any future contracts. "Just as you had a provision for fuel surcharges before, you should have one for tariffs." She also suggests modifying preexisting contracts if at all possible. Users cannot simply wish that this would go away. They should risk management plan and take the necessary precautions. If the United States imposes trade restrictions in the future, Ontario will need to maintain close communication with the Canadian government to reduce its exposure to potential harm. Canada's organizations need to look elsewhere for their purposes. The new agreement and the possibilities presented by the lowered duties are not well known in this area either (Patel, 2021). No major changes have occurred as of yet, but I anticipate a shift toward expanding into the European market soon. There have to be plans in place for legal departments to adjust to the new international trade regulations. Canadian firms and their in-house legal departments may continue to feel pressure from the present trade climate. 

In conclusion, when compared to the United States as a whole, Ontario province has been performing similarly in terms of impact and cross-border trade. The devolution of power over natural resources to the provinces has led to the development of increasingly self-sufficient economies. The government of Ontario has become more well-known and respected as a result of the province's thriving manufacturing sector and international trade. The essay has examined the factors that aid and hinder federal leadership and direction during the process of economic integration driven by the cross-market in Ontario Canada (Gagnon, 2018). It describes Canadian federalism, which is a legal and informal system that recognizes and accommodates regional concerns while still pursuing policy coherence and policy harmonization. 

References

Brisley, N. (2018). Market-Specific Human Capital: Talent Mobility and Compensation. Available at SSRN 2799407. 

Chen, M., Savguira, Y., MacInnis, J., James, B. D., & Thorpe, S. J. (2019). Power-to-gas: Amphibious yacht and fueling station. 

Ducci, F. (2019). Procedural implications of market definition in platform cases. Journal of Antitrust Enforcement, 7(3), 419-446. 

Gagnon, A. G. (2018). Contemporary Canadian Federalism. In Contemporary Canadian Federalism. University of Toronto Press. 

Hachard, T. (2020). It Takes Three: Making Space for Cities in Canadian Federalism. Institute on Municipal Finance and Governance. 

Han, L., Ngai, L. R., & Sheedy, K. D. (2022). To own or to rent? The effects of transaction taxes on housing markets. Technical report. 

Henderson, G. E. (2018). Insider Trading and Market Manipulation: Investigating and Prosecuting Across Borders. Banking & Finance Law Review, 34(1), 71-77. 

Kellerman, M. (2021). Market structure and disempowering regulatory intermediaries: Insights from US trade surveillance. Regulation & Governance, 15(4), 1350-1369. 

Liu, C., & Yawson, A. (2020). Financial misconduct and market-based penalties. Corruption and Fraud in Financial Markets: Malpractice, Misconduct and Manipulation, 65. 

Patel, S. (2021). What Determines Municipal Renewable Energy Development? Insights From a Mixed-Methods Study of Municipalities in Alberta.