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Pestel Analysis of Canada: Political Environment in Canada

Canada has a stable democratic political system and enjoys good relations with other countries. It has a highly developed mixed economy and is one of the top economies in the world. Canada is a diverse, multicultural country with a high standard of living. Technology plays a large role in the Canadian economy and is one of the fastest growing sectors. While Canada faces some environmental challenges like pollution and climate change, the government has taken steps to address these issues. Canadian law protects employee and human rights and there are various legal structures for doing business in the country.

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353 views

Pestel Analysis of Canada: Political Environment in Canada

Canada has a stable democratic political system and enjoys good relations with other countries. It has a highly developed mixed economy and is one of the top economies in the world. Canada is a diverse, multicultural country with a high standard of living. Technology plays a large role in the Canadian economy and is one of the fastest growing sectors. While Canada faces some environmental challenges like pollution and climate change, the government has taken steps to address these issues. Canadian law protects employee and human rights and there are various legal structures for doing business in the country.

Uploaded by

DullStar MOTO
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: Jyoti Rawat

ERP: 0191MBA142

PESTEL analysis of Canada

This is a generic PESTEL analysis of Canada. Canada is the 2nd largest


country in the world by total area. It is also a rich and beautiful country.
With a service-oriented economy and growth in manufacturing, Canada
has become one of the top economies in the world.
This project is to examine some of the political, economic, social,
technological, environmental, and legal factors affecting Canada today.

Political environment in Canada


Canada is a founding member of the United Nations and is a powerful
country. It maintains good relations with the most powerful country in the
world, the USA. It also maintains good relations with the United
Kingdom, France and many other countries in the world. Ottawa is the
capital of Canada.
Canada is a democratic country with a parliamentary system in place. It
also has a constitutional monarchy. Queen Elizabeth II is the head of state,
while the Governor General is her representative who usually carries out
most of the royal duties in Canada. The Prime Minister is the head of the
government and holds the executive power.
Canada enjoys a very good political stability. It is in fact one of the safest
countries in the world. With a low crime rate and trustworthy policing
services, Canada positions itself a very good place for business and
tourism. It is worth mentioning that Canada’s focus on international
peacekeeping has earned it a very good global image.

Economic environment in Canada


The next element to address in the PESTEL analysis of Canada is the
economic environment. Canada is the 10th largest economy in the world as
of April 2018. It has membership in the Organisation for Economic Co-
operation and Development (OECD), the World Trade Organization
(WTO), the G20 and the Commonwealth of Nations. It also has free trade
agreements with a number of countries. For example, Canada signed a free
Name: Jyoti Rawat
ERP: 0191MBA142

trade agreement called Comprehensive Economic and Trade Agreement


(CETA) with the EU in September 2017. This agreement aims to make it
easier to export goods and services to benefit people and business both in
Canada and the EU. Canada along with Mexico and the United States
signed the North American Free Trade Agreement (NAFTA) in 1994 to
create a trilateral trade bloc.
Canada has a highly developed mixed economy. Both the government and
the people of Canada make economic choices for the country. Some
industries are publicly owned, while some others are privately owned. For
example, Canada has more than 40 state-owned enterprises (SOEs) at the
federal level. Likewise, it has more than 100 SOEs at the provincial level
that immensely contribute to a variety of sectors including, finance; power,
electricity, utilities, and transportation (ITA, 2017).
The Canadian GDP is expected to be around USD1.8 trillion in 2018
(Focus Economics, 2018). Economic Growth for 2019 is forecast at 2.0
per cent, up from an earlier projection for 1.7 per cent. With a strong and
dynamic economy, diverse and entrepreneurial people, world-class
infrastructure, and one of the best banking systems in the world, Canada
draws the attention of investors and businesses around the world.  It is
worth mentioning that the recession in 2007/8 hit Canada badly; however,
it managed to recover from the crisis well because of its sound fiscal
policy and financial systems.
Some of the top exports of Canada are motor vehicles and parts, gold,
telecommunications equipment, industrial machinery and crude petroleum.
Canada’s top imports are cars, vehicle parts, computers, and delivery
trucks. The top trading partners of Canada are the US, Mexico, China,
Japan, Germany, and the UK.

Social environment in Canada


Canada is the 2nd largest country in the world by area; however, its
population is not that big. As of May 2018, the total population of the
country is 36.90 million and the population density is 4 per
Km2 (Worldmeters, 2018). Population growth has been fairly consistent
over the last four decades and currently there is no sign of slowing down.
Name: Jyoti Rawat
ERP: 0191MBA142

Canada is a very diverse country. In fact, diversity has played a big role in
the history of Canada, and many people call the country a country of
newcomers. There is a big shortage of skilled workers in a number of
sectors in Canada and many business owners say that this shortage is
obstructing the growth of their companies. The government of Canada is
dealing with this situation with the development of people in the country
and a flexible immigration system. Canada encourages immigration and
people with appropriate skills and experience can apply to immigrate to
the country.
According to some sources, around 46% of Canadians aged 15 and older
could be foreign-born, or could have at least one foreign-born parent by
2031. While English and French are the two official languages, there are
over more than 200 languages which are spoken in Canada as a home
language or mother tongue. Freedom of religion in the country is a
constitutionally protected right. Therefore, Canadians are free to have their
own beliefs and opinions, and they can assemble and worship without
limitation or state interference. This makes Canada an ideal place for
expatriates of many different faiths and none to work in the country.
The living standard in Canada is one of the highest in the world. The
Canadian consumers are confident about the sustainability of their jobs,
and the economy in general. They almost always demand high quality
products/services and after-sale customer support. The rate of online
shopping is growing very fast as the young customers are increasingly
using their tech devices to shop online (Banco Santander, 2018). However,
there are some concerns regarding growing economic inequalities in
Canada. For example, Canada’s 100 richest citizens have assets of around
$230 billion, while the richest 10 per cent of the population controls 40 per
cent of the country’s wealth (Attfield, 2017).

Technological environment Canada


Another important aspect in the PESTEL analysis of Canada is the
technological environment. Like all other major economies, technology
plays a big role in the Canadian economy. In fact, technology is one of the
fastest growing sectors in the country. Canadians make use of technology
for many purposes, most notably education, careers, and leisure. The
technology sector provides people with high-paying jobs, with an average
Name: Jyoti Rawat
ERP: 0191MBA142

salary of $67,000 compared to the national average of approximately


$48,000 (Rodgers, 2016).
Both public and private investments in Canada’s technology industry are
growing swiftly. In addition, political, economic and social stability have
made the country a fertile ground for entrepreneurship advancement. In
fact, many international IT professionals and firms see Canada as one of
the best countries in the world to advance their careers and grow their
businesses. Across Canada, technology is changing the landscape of many
traditional industries and is offering both people and companies a lot of
opportunities.

Environmental issues in Canada


Millions of tourists visit Canada every year to experience its scenic beauty.
The Arctic mountains, glaciers, lakes, forests, deserts, and many more
offer tourists a diverse landscape which is full of surprises. However, there
are a number of environmental challenges that Canada is facing today. For
instance, a number of air pollutants, acid rain, smog, and climate change
are affecting Canadians. Many Canadians in fact see air pollution a major
environmental concern. However, it is worth mentioning that the
government of Canada has taken a number of initiatives to decrease air
pollution and the emissions of greenhouse gases like carbon dioxide that
cause climate change.

Legal environment in Canada  


Legal environment is the last element to discuss in the PESTEL analysis of
Canada. A number of relevant issues should be discussed here. For
example, certain rights of employees are protected by law in Canada.
There are some minimum standards employers must abide by concerning
employees’ hours of work, minimum wages, sick days, vacation,
dismissal, and many more. The Canadian Human Rights Act (CHRA)
prohibits discrimination on the basis of gender, race, ethnicity, age and a
number of other grounds.
There are many methods to do business in Canada. For instance,
corporations, joint ventures, general or limited partnerships, trusts, sole
proprietorships, co-operatives, and Branch plant operations are the most
Name: Jyoti Rawat
ERP: 0191MBA142

common ones. For international businesses, corporation is the most


popular method of entry into Canada (Mercier & Woodman, 2016).

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