PESTLE analysis of Canada

The following is an analysis of other factors related to Canada using the PESTLE model. This details
the political, economic, social, technological, legal and environmental aspects of the country. As this
report has already focused on the socio-cultural aspect of the country, only the remaining factors
will be explored here.

Political

The Canadian political arena is dominated by the Conservatives (right of centre), the New Democrat
Party (official opposition and left of centre) and the Liberals. The conservative governments came to
power in 2006 as a minority government after 12 years of liberal rule, before gaining a majority in
2011 elections, removing the threat of political instability (Marketline 2012, p.14). The strong
democratic set up of Canada can certainly be seen as strength as this helps create stability within the
government. Canada’s approach concerning foreign relations has resulted in significant trade and
investment links and a strong grounding within foreign political affairs. Within Canadian political
culture there is a tendency for the government to represent itself as the symbols of core social
values and a defined element of strong national identity (Prince 2014, p.346).

Economical

Canada as a country has a very strong banking system and flourishing business environment. The
banking system is a very important aspect of the economy as it alone contributes C$7.5bn as taxes,
provides employment for around 260,000 people and the financing for 1.2 million small to medium
business (Marketline 2013, pg.17). Canada is one of the world’s leading free market economies and
a major exporter of petroleum and natural gas, processed and unprocessed minerals, automobiles,
manufactured goods such as foods and wood and paper products. Canada is certainly proving to be a
favourable destination for foreign investment within the coming years (Marketline 2012, pg.18). 14

Technological

It has been recognised that Canada does face an innovation gap in regards to technology
development. The number of external patent applications and quality of researchers in the nation
are low relative to the size of its qualified labour force (Marketline 2012, pg.24). Canada is home to a
very sophisticated manufacturing industry, which could easily serve as the base for further
development of products (Marketline 2012, pg.24)

Legal

The Canadian legal system has an independent judiciary, which is free from other branches of
government. Legislative authority and responsibility are divided between various levels of
government (Marketline 2012, pg.27). Canada was ranked 13th in the World Bank’s ease of doing
business index for 2012. The country has one of the most flexible labour markets in the world: it
operates under employment regulations that enhance employment opportunities and productivity
growth in most aspects; the comprehensive legal and regulatory framework provides transparency
to the business environment. The regulatory processes are favourable for most foreign investors
(Marketline 2012, pg.27). 15

Environmental

The Canadian government has created numerous policies to establish mechanisms to meet
environmental challenges that come with economic development. The focuses of the Canadian
environmental policies have certainly broadened from local and regional issues to challenges faced
of a more global nature. Climate change, global biodiversity, ozone layer depletion and the transport
of chemicals and hazardous waste are some of the areas that appear on the top of Canada’s
environmental agenda (Marketline 2012, pg.30). The Environment Act of Canada is an umbrella act,
having different laws for water, air, waste control and preserving the environment. The main
environmental issues within Canada come from oil and the tar sands in northern Alberta have
decimated the landscape. Canada focuses on environmental concerns, not just locally, but on a
global scale.