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Landscape of Canadian Business Associations

Role in Economy, Internal Structure, and Cooperation between Government and Enterprises

Alexandre LAROUCHE-MALTAIS

Senior Trade & Investment Expert The Conference Board of Canada Ottawa, 14 September 2016

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Definition

Source: U.S. Legal.com (2016)

“Business associations are membership organizations engaged in promoting the business interests of their

• members. These associations typically perform activities that

would be unduly costly or time-consuming for an individual company to perform by itself, including lobbying, information gathering, research, and setting industry standards.” Over 760 business/trade associations are registered in Canada

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Role in the Economy Government Private Sector

Communication channel

Business associations may fill the “communication gap” between the government and the private sector by providing useful insights to policymakers on potential reform impacts and disseminating updated information on future regulatory changes to the private sector.

Source: Shkolnikov, Center for International Private Enterprise (2009)

Role

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Role in the Economy Government Private Sector

Communication channel

“Advocacy: The Power to Shape Policy” Since 1925, the Canadian Chamber of Commerce has connected businesses of all sizes, from all sectors and from all regions of the country to advocate for public policies that will foster a strong, competitive economic environment that benefits businesses, communities and families across Canada.

Example 1

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Role in the Economy Government Private Sector

Communication channel

The Canadian Chamber of Commerce’s advocacy initiatives:

• Letters to newly appointed ministers
• Position papers, e.g. TPP and other international affairs
• Publications, e.g. “Top 10 Barriers to Competitiveness”
• Blog and newspapers

Example 1

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Role in the Economy Government Private Sector

Communication channel The Canadian Apparel Federation publishes main apparel –related regulations on its website and provides for “regulatory updates” to its members to foster compliance within the industry Example 2

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Supporting competitiveness

Business associations may offer a wide portfolio of support services to improve or maintain their members’ competitiveness on international markets

Role

Economic and Sectoral Forecasting Trade Promotion Support Networking Opportunities Foreign and Domestic Markets Information Training

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Canadian Manufacturers and Exporters publish “Manufacturing Pulse” a quarterly economic update

Economic and Sectoral Forecasting

Economic and Sectoral Forecasting Trade Promotion Support Networking Opportunities Foreign and Domestic Markets Information Training

Supporting competitiveness

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The Canadian Apparel Federation launched the “Wear Canada Program”, which aims to highlight the advantages of Canadian sourcing, and support Canadian firms in entering new export markets

Trade Promotion Support

Economic and Sectoral Forecasting Trade Promotion Support Networking Opportunities Foreign and Domestic Markets Information Training

Supporting competitiveness

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The Coffee Association of Canada organizes an Annual Conference every fall to offer an opportunity for its members to network and to build partnerships

Networking Opportunities

Economic and Sectoral Forecasting Trade Promotion Support Networking Opportunities Foreign and Domestic Markets Information Training

Supporting competitiveness

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The Montreal Trade Board organized a one-day event

• n “Indonesia, The Archipelago that Combines Growth

and Consumption” to explore business opportunities on the Indonesian market.

Foreign Market Information

Economic and Sectoral Forecasting Trade Promotion Support Networking Opportunities Foreign and Domestic Markets Information Training

Supporting competitiveness

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The Canadian Federation of Independent Business

• ffers “Online courses for CFIB members” specially in

line with small business owners’ needs.

Training

Economic and Sectoral Forecasting Trade Promotion Support Networking Opportunities Foreign and Domestic Markets Information Training

Supporting competitiveness

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Structure

Business Association’s services

Smaller Business Association

Big business Importer/ Exporter SME Membership may include a variety of different types of private sector stakeholders: SME producers or service providers, big businesses, importers and exporters, and even local or regional business associations (e.g. Chambers

• f commerce)

Member D Member A Member C Member B

Membership

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Structure

Business Association’s services

Smaller Business Association

Big business Importer/ Exporter SME

Source: Doner and Schneider (2000)

Membership may be either facultative or compulsory, impacting on the membership density and association influence on national policies. High association density may lead to corporatism, but may also foster industry transformation and policy reforms.

Member D Member A Member C Member B

Membership

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Four Successful Structural Features

Source: Doner and Schneider (2000)

Voting weighted by size Flexibility in adjusting internal rules Transparency in governance Opportunities for members deliberation

1 2 3 4

Business associations meeting these criteria offer more membership benefits and address more efficiently market failures (imperfect information, lack

• f investment)

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Cooperation between Government and Enterprises

Economic and Trade Policy Formulation

• Private needs identification
• Implementation Feedback

Market-Supporting Activities

• Property rights
• Uncorrupt Administration
• Infrastructure

Market- Complementing Activities

• Costly Information
• Low Investment in Training
• Lack of Coordination

Source: Doner and Schneider (2000)

Business Associations

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