Governments sometimes establish commercial enterprises to achieve social and economic development public policy objectives. The usual rationale for establishing a government-owned commercial enterprise is to address a perceived private market failure by providing essential services at a reasonable cost which either the private sector either does not provide in certain areas, or would only provide at a sociallyunacceptable cost.
In Canada, both the provinces and the federal government have used government-owned business enterprises, called commercial Crown corporations, to address such perceived private sector market failures.
For example, the province of Saskatchewan established and still owns commercial Crown corporations to provide telecommunications, natural gas transmission and distribution, electricity generation, transmission and distribution, and property and casualty insurance.
About the Author:
Sheldon Schwartz worked for the Province of Saskatchewan during a career spanning 25 years, including as Assistant Deputy Minister of Finance, responsible for Saskatchewan’s treasury and debt management functions and as the Chief Financial Officer and Vice President of Finance and Administration for Crown Investments Corporation, the Province’s holding company for its commercial Crown corporations. Born in Regina, he has a Masters degree in Economics from Carleton University, and holds the Chartered Financial Analyst (CFA) designation. As a semi-retired consultant living in Victoria, British Columbia, Sheldon continues his lifelong interest in public policy in Canada. His recent article, “Saskatchewan’s Crown Corporations— Time for a New Crown Review”, appeared in The Saskatchewan Institute of Public Policy’s Spring 2008 Policy Dialogue.