Capitalism In Canada

Canada is a trading nation and its business remains the instrument of economic growth. Canada’s growth and wealth is led by its capitalism economic system. Canada is a land of opportunities where business can operate in a free market. Capitalism is also called free market economy. Free market economy permits the market to make the decision about what good and services to offer and in which amounts. Business decide what and how to offer their products to consumers. Through consumer’s feedback, businesses can determine the demand for their products and either increase the supply to meet the high demand or cut supply if the demand for their product/service is decreasing.

Telecom industry in general has been expanding over the past decade with

new technology and globalization. Even in not stable economy, Canada’s telecom industry has seen its revenues increase by average annual rate of 2.5% in the past five years, (CRTC, 2015).

Top five telecom companies account for about 84% of the total revenue. In 2014, about 94% of the telecom revenues were from services that the Commission has determined are sufficiently competitive and are not regulated. “The Commission refrains from regulation when it finds that a service is subject to sufficient competition or where refraining is consistent with the Canadian telecommunications policy objectives. This is referred to as forbearance. Where a service is forborne it is generally relieved of the obligation of a Commission-approved tariff. Other aspects of the service may still be regulated” (CRTC, 2015). In the past, the Government of Canada has taken a number of measures to encourage competition in the telecom market so that Canadians benefit from more choices, lower prices, and better service (Industry Canada, 2015). There are 4 different degrees of competition, perfect competition, monopolistic competition, oligopoly competition and monopoly competition (“Understanding Canadian Business”, 8th ed.). Competition encourages business to think more innovatively that is required for growth. Competition also makes business think of quality of their service when there are number of similar products available in the market. Another major advantage of competition

is that it is a great motivator to be the best in your market. As of summer 2015, the amount of spectrum available to provide mobile services to consumers has grown by almost 60 percent since early 2014(Industry Canada, 2015). From January 2014 to May 2015, the Government held three major spectrum auctions to help provide more of this valued public resource to wireless companies. Canada’s federal government offers many assistance programs to businesses such as loans, grants, advice and other aids. In 2014-2015, transfer payments to individuals and transfer payments to other levels of government, represent 27.3% and 22.3% of expense. (“Department of Finance Canada, 2015”).
Compare to Canada, Brazil’s economy is moderately free. Brazil economy has taken a down turn in the past couple of years. I believe it will be a great investment for Phonetask to invest in Canada as the telecom market in Canada is very stable has many opportunities.