This thesis presents two papers dealing with international trade policy in North America. The first is "An Empirical Analysis of Protectionist Forces in the United States and Canada" and the second is "Imports as a Cause of Injury: the Case of the 1986 Softwood Lumber Dispute". The first paper addresses the question of what motivates firms and industries to initiate "less than fair value" (LFV) complaints. The theory of rent-seeking is tested by analyzing data on the frequency of countervailing duty and antidumping complaints from 1975 to 1987 in both Canada and the U.S. A reduced form model is specified that expUcitly incorporates factors that are assumed to affect the supply and demand for protection, including federal elections, business cycles, and statutory changes to laws governing antidumping and countervailing duty procedures. The results indicate that the frequency of LFV cases, in both the U.S. and Canada, rise during low points in the business cycle, and when relative competitiveness and profitability in manufacturing decline. The second paper takes a specific countervailing duty case, that of the Canada-U.S. softwood lumber dispute of 1986, and addresses the question of whether the U.S. industry suffered injury from the alleged less than fair valued Canadian lumber imports. The relationship between various measures of injury for the U.S. industry and various hypothesized causal factors, including stumpage prices, is analyzed. The six measures of injury are: prices, output, market share, employment, accounting profits, and stock market profits. Structural models are specified and reduced form models tested for the 1975 to 1987 time period. The analysis indicates that stumpage prices, as proxied by B.C. stumpage levels, appear to have had littie effect on any injury sustained by the U.S. industry. Alternative specifications, using "leaked rents" to the B.C. industry as a proxy for the alleged subsidy, also showed little effect on the U.S. industry. Business cycle effects and the exchange rate are the most important determinants of performance. Counterfactual simulations using tiie estimated equations permit the hypothesizing of how the U.S. industry would have fared under alternative economic scenarios. This provides a useful framework for evaluating causes of injury, since one can control for all other factors besides those alleged to be unfair.

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It is widely believed that small and medium-sized enterprises ("SMEs"), acting as a source of innovation and job creation, play a key role in the economy of Canada. / The legal framework which regulates SMEs' activities is vast. This thesis focuses on the legal framework and most important aspects of three critical areas: financing, taxation and international trade. / After describing and interpreting the legal framework of these areas and the information obtained from public and private institutions which are considered key in these issues, this thesis presents conclusions in relation to the question of how and in what way, if any, the current legislative and regulatory framework relating to SMEs contributes to the growth and prosperity of SMEs and to the importance of such a framework to SMEs' success and growth.

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This thesis presents two papers dealing with international trade policy in North America. The first is "An Empirical Analysis of Protectionist Forces in the United States and Canada" and the second is "Imports as a Cause of Injury: the Case of the 1986 Softwood Lumber Dispute". The first paper addresses the question of what motivates firms and industries to initiate "less than fair value" (LFV) complaints. The theory of rent-seeking is tested by analyzing data on the frequency of countervailing duty and antidumping complaints from 1975 to 1987 in both Canada and the U.S. A reduced form model is specified that expUcitly incorporates factors that are assumed to affect the supply and demand for protection, including federal elections, business cycles, and statutory changes to laws governing antidumping and countervailing duty procedures. The results indicate that the frequency of LFV cases, in both the U.S. and Canada, rise during low points in the business cycle, and when relative competitiveness and profitability in manufacturing decline. The second paper takes a specific countervailing duty case, that of the Canada-U.S. softwood lumber dispute of 1986, and addresses the question of whether the U.S. industry suffered injury from the alleged less than fair valued Canadian lumber imports. The relationship between various measures of injury for the U.S. industry and various hypothesized causal factors, including stumpage prices, is analyzed. The six measures of injury are: prices, output, market share, employment, accounting profits, and stock market profits. Structural models are specified and reduced form models tested for the 1975 to 1987 time period. The analysis indicates that stumpage prices, as proxied by B.C. stumpage levels, appear to have had littie effect on any injury sustained by the U.S. industry. Alternative specifications, using "leaked rents" to the B.C. industry as a proxy for the alleged subsidy, also showed little effect on the U.S. industry. Business cycle effects and the exchange rate are the most important determinants of performance. Counterfactual simulations using tiie estimated equations permit the hypothesizing of how the U.S. industry would have fared under alternative economic scenarios. This provides a useful framework for evaluating causes of injury, since one can control for all other factors besides those alleged to be unfair. / Business, Sauder School of / Graduate

Seven provinces in Canada have entered tax collection agreements with the federal government whereby that government collects corporate income tax on their behalf. Quebec, Ontario and Alberta have not entered such agreements and levy and collect corporate income tax pursuant to their own legislation and within their own administrative systems. This thesis will examine the problems resulting from the independent approaches taken by Quebec, Ontario and Alberta, as they affect the corporate taxpayer. The problems fall into three categories. First, provincial adoption of the Income Tax Act (Canada), while assuring some similarity between the federal and provincial systems, can have adverse consequences for the corporate taxpayer. Secondly, differences between the legislation of Canada, Quebec, Ontario and Alberta create inconsistencies that present difficulties for the corporate taxpayer. Thirdly, differences in the administrative systems of the three provinces and the federal government increase the cost to the corporate taxpayer and create compliance problems for it. The thesis concludes that the future of the Canadian corporate income tax system will involve even more provincial independence and, therefore, measures to alleviate some of the problems are discussed. These include a new approach to co-operative federalism, an examination of the efficacy of more provincial autonomy and tax harmonization. This analysis shows that the corporate taxpayer would benefit from more cooperation between the federal and provincial governments together with a degree of harmonization of the tax bases. / Law, Peter A. Allard School of / Graduate

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This thesis comprises three essays on the international movement of merchandise and people. The first essay measures the effects of foreign aid flows on a donor's merchandise exports. On average, donor countries tie approximately 50% of their foreign aid to exports, but the export stimulation of aid may exceed the amount that is directly tied. This essay uses the gravity model of trade to statistically test the link between aid and export expansion. The results suggest that aid is associated with an increase in exports of goods amounting to 120% of the aid. The essay also makes comparisons among donors and finds that Japan, which has drawn harsh criticism for using aid to gain unfair trade advantages, derives less merchandise exports from aid than the average donor. The second essay investigates the effects of immigration on Canada's pattern of trade. I derive three alternative functional forms capturing the relationship between immigration and trade based on the proposition that immigrants use their superior "market intelligence" to exploit new trade opportunities. I then employ province-level trade data with over 150 trading partners to identify immigrant effects and obtain results suggesting that immigrants account for over 10% of Canada's exports. The third essay addresses the question of whether tax differences contribute toward the brain drain from Canada to the U.S. This essay tests whether the U.S.'s lower taxes draw Canadians south by examining a sample of Canadians living in Canada and a sample of Canadians living in the U.S. Using information from these samples I estimate how much these individuals would earn in the opposite country and estimate the taxes they would pay. I find that the people who have the most to gain in income and in tax-savings are the most likely to choose to live in the U.S., and thus corroborate the claim that tax differences contribute toward Canada's brain drain.