Monetary and Fiscal Policy




Monetary Policy
Refrigerated_Containers.jpg
Specialised containers for transport of refrigerated goods. (credit Journal of Commerce)


Canada's Monetary Policy


Changes in Canada's monetary policy have, in theory, the power to affect the Maher-Melford Terminal.

In order to stimulate growth of the economy, expansionary (increasing) changes in the supply of money by the government can allow for the development of major projects like the Maher-Melford Terminal.

Contractionary (decreasing) changes to the supply of money in Canada would, in turn, slow the economy, and potentially decrease the growth of the Maher-Melford Terminal.

International Monetary Policy


As with Canada's monetary policy, the expansionary and contractionary monetary changes made by other countries' governments can have a major impact on the success and the production levels of the Maher-Melford Terminal. When the world's major exporters are using expansionary monetary policy to increase the growth of their economies, the amount of products and containers coming into ports such as the Maher-Melford Terminal will also be at a higher level than at times of contractionary monetary policy.

Fiscal Policy

Fiscal Policy refers to actions taken by a government to control a country’s economy by manipulating taxation or making changes to government spending.

Taxation


Changes in corporate income tax would directly affect Maher-Melford; an increase in corporate tax rates means that Maher-Melford will experience greater income tax expense (by percentage) than the previous fiscal year. A decrease in corporate tax rates means that Maher-Melford will experience a decrease in their income tax expense (by percentage) than the previous fiscal year.

Changes in personal income tax rates would indirectly affect Maher-Melford. Personal income tax affects aggregate demand, and as personal income tax rates increase, aggregate demand decreases. For Maher-Melford this means, in general, that they can expect a decrease in the volume of twenty-foot equivalent units (TEU’s) passing through their port. As personal income tax rates decrease, aggregate demand increases, and Maher-Melford could, in general, expect a greater volume of TEU’s moving through their port.

Government Spending


Increases and decreases in government spending would have minimal direct impact on Maher-Melford's activities. As government spending applies only to domestic goods being used domestically, and, generally, Maher-Melford only interacts with domestic goods in order to export them, an increase or decrease in government spending would not greatly impact the number of TEU's passing through their terminal.