PESTEL analysis free essay sample

Canada is one of the mightiest countries in the world due to its many unique characters. In the context of economy Canada is a leading competitor for many other giants in the world. As country there are many things to boast about Canada. Natural resources, healthcare, arts, music, and many more made Canada very much popular among other nations. This report discusses and analyse the political, economic and legal characteristics of Canada and its effect on doing business there in briefly. Table of Content List of Figures List of Tables 1. Introduction Canada is a North American Country having 10 provinces 3 territories in its content. It is located to the northern side of the continent. The extent of the land is about 9. 98 million square kilometres in total it is the worlds second-largest country by total area. Canada’s common border with the United States becomes the worlds longest land border shared by the same two countries. We will write a custom essay sample on PESTEL analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The country is a federal parliamentary democracy and a constitutional monarchy and the Queen Elizabeth II is the head of the state. Canada is officially bilingual (English French) with an estimated population of 35. 15 million for the year 2013. Canadian dollar is the currency of Canada and is one of the most ethnically diverse and multicultural nation of the world. In the beginning of the late 15th century, British and French in their colonial expeditions have explored, and later settled in the region. With time the population grew in the in subsequent decades, so the more of the exploration of the territory was continued and additional self-governing Crown colonies were established. In 1867 three colonies have federated forming a federal dominion which established Canada. The history speaks that the word Canada derived from the St. Lawrence Iroquoian word Kanata which means village or settlement. Indigenous people back in 1535 had used this word to direct the French explorer Jacques Cartier to the village of Stadacona. Later Cartier has used this word not only to call the particular village but the entire territory. Figure : Flag of Canada Canada is a developed and one of the well-heeled countries in the world. In terms of international measurements such as civil liberties, education, economic freedom, government transparency and quality of life it ranks among highest in the world. Moreover Canada owns the eighth highest per capita income globally, and the eleventh highest ranking in the Human Development Index. Also Canada is an active member of the G7, G8, G20, International Covenant on Civil and Political Rights, NATO, North American Free Trade Agreement, Organisation for Economic Co-operation and Development (OECD), World Trade Organization, Commonwealth of Nations, Francophonie, Organization of American States, Asia-Pacific Economic Cooperation, and the United Nations. Although there are many actors, actresses, musicians, and inventors have come from Canada, it is generally known for its universal health care which is available to anyone. The famous products of Canada include maple syrup, certain beer, lumber, and tar-sands oil. Few of the products that Canada imports are aircraft and automobile parts, fruits and veggies, petroleum products, consumer goods like shoes and clothes. Canada exports things such as automotive parts, aircraft, electronics and industrial machinery. Western provinces are very popular for their great beef products while eastern provinces are famous for their seafood in Canada. As the country naturally owns greatest number of lakes, it supplies the United States with electricity and water. Canada is commonly known as a prosperous peaceful country worldwide although some of their military troops are at foreign land. 2. Analysis 2. 1 Political characteristics Since the late 19th century the when the provinces were self-governed in Canada the democratic principles have been predominant. The nation was ruled by a coalition of the Conservative and Liberal parties throughout the early 20th century. Anyhow, after â€Å"World War II† Canada was ruled by either the Conservatives or the Liberals. According to the World Banks Worldwide Governance Indicators Canada ranked in the 93. 8 percentile on voice and accountability in the year 2010 which represent the stability of the democratic system. The strong democratic setup of Canada counts to their strengths in terms of political aspects. Figure : Canadian political structure (Central government) Figure : Key political figures in Canada Trade and foreign relations continues to grow due to Canada’s proactive attitude towards those areas and this has helped in the development of significant trade investment links. The economy of the country is heavily depends on trade, especially United States. Also the export and import value makes an important share of its GDP. The government is undertaking free trade agreement (FTA) negotiations with Turkey, Morocco, Ukraine, the European Union (EU), South Korea, India, the Dominican Republic, Honduras, Singapore, El Salvador, Nicaragua, Guatemala, Andean and Caribbean countries. Canada is developing agreements within the region to continue bilateral and regional free trade, avoid double taxation, strengthen financial and banking institutions, protect foreign investment, and assist development. Canada has signed bilateral agreements with Mexico, Greece, Ukraine and Croatia to Since May 2010 to enable youngsters to travel and work between the countries with ease. In February 2011, the US and Canada created the US-Canada Regulatory Cooperation Council to support businesses Fresh landing slots for the Etihad and Emirates airlines were denied by Canada’s transport agency In October 2010 generating a diplomatic heat with the United Arab Emirates (UAE) which is still boiling. As a hit back Gulfs closed down Canada’s military base Camp Mirage outside Dubai which was used in the Afghanistan war. UEA embassy cancelled free visa for Canadian citizens in December 2010 under above circumstances. The student protests can be witnessed in Quebec since February 2012. The reason for the protest is due to the increment of the tuition fees in universities with C$1,625 ($1,595) during the next five years. Some scuffles and damage to property in Central Montreal was seen in night-time protests. The governments of the province and the city have created laws to suppress protests. The tax structure of Canada is among the lowest in G8 countries. This is a very good conditioned making Canada a popular destination for investments. Moreover the most preferable RD tax credit program and the lowest payroll taxes among the G8 countries own by Canada. As of 2012 the lowest statutory corporate income tax rate among the G8 is an utmost advantage of Canada to attract foreign investors. The government has foreseen the next move of its economic plan under the budget for 2011, which includes aiding economic growth and job creation through lower taxes and investments in innovation, education, and training. 2. 2 Economical Characteristics Looking at Canada’s economy it is among other leading nations with a GDP of 1777. 80 USD in 2012. Statistical analyses indicate that it will hit 1919. 74 USD by end of 2013. Though there was a 2. 8% of economic contraction in 2009 it has bounce back with growth rate of 3. 2% in 2010. It is visible that the country has a strong banking system and healthy business environment. Contribution to the GDP of services was recorded 71% while industry recorded as 27. 1%. Minor rates of corporate taxes incentives for RD made a positive major respond in attracting FDI. But low productivity, current account deficit stay which showing attention. Figure : Canada GDP GDP Last Previous Highest Lowest Forecast Unit GDP Constant Prices 1695542. 00 2013-08-15 1684128. 00 1695542. 00 758823. 00 2690487. 90 2013-11-30 CAD Million Gdp Growth Annualized 2. 71 2013-08-15 1. 60 8. 54 -8. 99 2. 62 2014-03-31 Per cent Gross Fixed Capital Formation 401994. 00 2013-08-15 399659. 00 401994. 00 134073. 00 400513. 26 2013-11-30 CAD Million Gross National Product 1858668. 00 2013-08-15 1836128. 00 1858668. 00 343088. 00 1862786. 48 2013-11-30 Million CAD GDP per capita 35992. 10 2012-12-31 35794. 30 36182. 90 12931. 40 36149. 66 2013-12-31 USD GDP per capita PPP 35936. 26 2012-12-31 35738. 70 36126. 74 22635. 37 36208. 91 2013-12-31 USD GDP Growth Rate 0. 70 2013-09-30 0. 40 3. 33 -1. 80 0. 17 2013-12-31 per cent GDP Annual Growth Rate 1. 91 2013-09-30 1. 40 8. 80 -3. 70 1. 60 2013-12-31 per cent GDP 1821. 40 2012-12-31 1777. 80 1821. 40 40. 80 1919. 74 2013-12-31 USD Billion Table : Canada GDP information One of the most significant features of the Canadian Economy is its Strong Banking system which is capable of handling any financial crisis that the country faces. The Canadian Banking System has direct impact on the country’s economy as it constitutes C$7. 5bn ($7. 28bn) of its economy as taxes and contributes to the country’s GDP by 3%. Having over 75 domestic and foreign banks with more than 6,000 branches, the banking system provides more than 260,000 jobs for its citizens and 90,000 jobs outside of the country. This vast branch network provides uninterrupted and continuous banking services through 58,000 ATMs and 630,000 Payment Terminals while supporting 1. 2 million small- and medium-sized businesses financially. Canada is considered, a major exporter of oil, minerals, automobiles, manufactured goods, and forest products . According to the 2012 index of Economic Freedom, Canada scored 79. 9 making them the sixth among the free market economies. In the World Bank’s Doing Business 2012 rankings, the country placed 13th. In the ease of starting a business category, it is placed third. The factors that make Canada a favourable destination for investment are; Its’ flexibility and easiness of registering and starting a business (average of five days and just one procedure and can be done online since 2006) Flexibility in registering a property (six procedures and 17 days) The overall freedom to establish and run a business is strongly protected under Canada’s regulatory environment. No requirement for a minimum capital to set up a business However with the growing and stable economy there are several issues that the country faces including the government regulations favouring major energy projects that could have undeniable environmental impacts. Another major concern is its current account deficit. The country recorded a trade excess until 2008, and after that a current deficit was reported until 2012. The country’s government is looking for potential refinements to its economy in order to overcome the problem of current account deficit while looking at the causes for turning the surplus in 2008 to crating the deficit in 2009. And they are planning to establish a balanced budget by year 2015. Additional measures include Duty free manufacturing tariff scheme where tariffs on all manufacturing inputs will be reduced to zero by 2015, assisting country’s economic growth and job formation over a low tax scheme and investments. 2. 3 Legal Characteristics Business environment of Canada is transparent as a result of its comprehensive legal and regulatory framework. The freedom which gives by the national law and by the regulatory processes to start, operate and close a business does favour foreign investors in extensive. It is easy to start a business in Canada than in any other nation as it takes an average of five days and one procedure compared to the OECD average of 12 days and five procedures according to the World Banks Doing Business 2012 report. When setting up an enterprise the procedures need to follow are less weighty and more transparent. Provincial government earn higher revenues by taxing businesses. But country’s direct taxes are higher than provincial collections through VAT such as GST. Maximising revenues through VAT is found to be more effective than other types of taxes like income tax etc. as it has a broader base and doesn’t effect on the tendency of the people to save or invest or both. Even though Canada is an advance nation there are government restrictions on foreign ownership sectors such as telecoms, financial services, and aviation. Industries such as oil and gas, farming, book publishing and selling, liquor sales, fisheries, mining, optometry, collection agencies, engineering, pharmacies, and securities dealers also have significant restrictions with regard to foreign investment. If these sectors are fully liberalized there will be a rise in investment activities further more. 3. Conclusion The proactive attitudes of the government of Canada in trade and foreign relations have resulted in improving and developing trade investment links. Taxation of the system also favours foreign investments and this has been one another key play of its economy. Canada is among many other leading nations in terms of its economy. So the Economy and political aspects of the country favours positively in the context of doing business in Canada. Moreover, they have a transparent business environment as a result of its comprehensive legal and regulatory framework and national law as well as regulatory processes give such a freedom to start, operate and close a business with ease in Canada. Also registering and starting a business is very much flexible and easy as there is just one procedure to follow and that can be done online since 2006. These legal aspects also favour very much positively and encourage doing business at Canada. So in general under above discussed dimensions the structure, setup and its processes help and favours lot more in doing business in Canada relatively than many other countries in the world