Media Release: Knee-Capping the Competition

Commentary, Crown Corporations, Frontier Centre, Press Release, Taxation

Winnipeg: The Frontier Centre for Public Policy today released a study that highlights the most egregious example of tax inequity and unfairness in Canada: the constitutional tax exempt status afforded Crown corporations.

In Knee-capping the Competition: The tax-free advantage—and unfairness—of Crown corporations in Canada, author and lawyer Michael Donison notes that Crown corporations in Canada, and particularly those engaged in commercial activities, are afforded an unfair advantage in the marketplace over private sector competitors. This is an advantage that is particularly problematic in a recession.

“The current legal and constitutional tax exempt status for Crown corporations at both levels of government clearly violates basic principles of tax equity,” writes Donison. “The attitude of the courts and governments has been to keep this tax inequity, although, increasingly on an ad hoc basis, governments have been legislating and agreeing to remove it in part.”

Donison notes that governments in Canada could eliminate this tax inequity and unfairness once and for all using legislation. He points out a good template exists in the form of legislation passed by the British Columbia legislature in 2003 which eliminated such tax-free status for the BC Ferry Corporation. “This would be a very simple legal solution to overcome the current unsatisfactory legal and constitutional tax exemption regime for Crown corporations in Canada.”

“A legal solution is readily at hand; the question is whether governments have the political will to do so,” said Donison.

Copies of the Frontier Centre policy series backgrounder Knee-capping the Competition can be downloaded free here.

For more information, contact the study author at:

Michael Donison
613- 322-9994


Gary Slywchuk
Troy Media Corporation