Economic Systems´╗┐

Good rail service is essential to making container terminals profitable credit World

The three branches of economics systems that an economy can be based on are:
  • Market economy, which is based on the territory's unrestricted market flow of goods and services.
  • Command economy, which is based on the restrictions of the government as it tries to control outcomes.
  • Traditional economy, which is slow to evolve, and restrains innovation, but honors social values.

Maher-Melford has to face Canada's government-market economy mix. As it is privately owned, Maher-Melford would normally be minimally influenced directly by the government, but there has been talk of establishing port authority ("a governmental commission in charge of traffic and regulations of a port". 1) in the area, which will raise costs and hurt the terminal's profits. This will discourage future investors because some money goes to the government as opposed to them.

For political reasons, the government has become direct competition to this project because it is funding the nearby Sydney harbour dredging and container port. The Sydney harbour doesn't have the natural physical advantages (ice-free and naturally deep) or supporting infrastructure that Mulgrave has (in majority) already; last year it was announced that the federal government will pay $19 million of the dredging costs, while the provincial government dishes out $15.2 million and the Cape-Breton municipality puts $2 million. 2

The occasional closing of the causeway makes Mulgrave a better choice credit MB Whitcomb

However, efforts to get the container terminal in Sydport have come to a standstill, and actions are being taken to raise money to create a campaign.

There are two shareholders of Sydport, Enterprise Cape Breton Corp. (ECBC) and New Dawn Enterprises, that seem to be fighting over their plans for the harbour; New Dawn wishes to carry on with the plan to expand the harbour to include a container port while ECBC opposes, claiming that it wouldn't be beneficial for the region. ECBC has later been accused of their actions being influenced by Maher-Melford terminal. 3

The Canada Border Services Agency (created off Canadian Customs) also imposes legislation and regulations to all Canadian ports, including:
  • Protecting food safety, plant and animal health, and Canada's resource base
  • Promoting Canadian business and economic benefits by administering trade legislation and trade agreements to meet Canada's international obligations.
  • Enforcing trade remedies that help protect Canadian industry from the injurious effects of dumped and subsidized imported goods
  • Collecting applicable duties and taxes on imported goods 4

In terms of the market system, this project is directly related to Supply & Demand, the project was shut down altogether in 2008 due to the lack of demand of the international transport of goods during the recession. Furthermore, Melford has chosen their site within Mulgrave to begin with because it would be closer to Europe than its main competitor (Halifax Harbour) and the site would be ice-free and cheap to expand; there would also be less government regulation (more money toward investors and less expensive for clients).