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1. The corporation, the typical form taken by larger businesses, has the advantages of being able to raise larger amounts of capital due to the limited liability of its shareholders, and of lower tax rates on income above a certain level. Disadvantages include the initial costs of incorporation and a greater degree of government regulation, especially with respect to public corporations.
2. Small business is an important and dynamic sector of the Canadian economy, consisting of many hundreds of thousands of firms and employing up to 40 percent of the nation’s labor force.
3. Major problems faced by small business include lack of management expertise, financing problems, government regulations and paperwork, difficulties attracting and retaining skilled employees, and coping with inflation.
4. A wide variety of government programs exists to assist small business in areas such as financing, management counseling, marketing, personnel recruitment, and research and development.
5. The Canadian Federation of Independent Business is an organization of over 55,000 small businesses which acts as the small business lobby with government, promoting free competitive enterprise.
6. Big business is another major component of the Canadian economy, accounting for as much as half the economy’s output, according to some measures. While these large corporations are important to the Canadian economy, the domination of some industries by a few very large corporations raises questions as to whatever such corporate concentration is in the public interest.
7. A different form of business concentration is the “conglomerate,” in which companies in a variety of industries are controlled by a central management group, through holding companies.
8. Control of the modern large corporation is not usually in the hands of the shareholders as a group; rather, it tends to rest with top management and/or the Board of Directors, neither of which are usually major shareholders.
9. A significant number of Canada’s large corporations are government owned, particularly in the areas of electrical utilities, transportation and communications, and energy and resources.

Discussion Questions:

1. Do you believe that small business will become more or less important in the Canadian economy in the future? Why?

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