A New Crown Review: An Idea Whose Time Has Come

In this study, Sheldon Schwartz, a former Crown Investments Corporation Vice President, examines the case for a new review of Saskatchewan’s Crown Corporations. He argues that much has changed in the 15 years since the last review, and the time has come to take another look at the provinces asset portfolio.

Background

Saskatchewan’s first commercial Crown corporations were established for pragmatic public policy purposes. According to Crown Investments Corporation (CIC), the holding company for Saskatchewan’s commercial Crown corporations, “Private sector companies either did not offer services, offered them only to major centres, or charged rural customers significantly higher rates than urban customers. Saskatchewan’s first commercial Crown corporations were established because essential services such as telephone, power, and hail insurance for crops were not available from private companies, or not available to all residents on a fair and equitable basis”.1 The commercial Crowns also provide head office jobs in Saskatchewan that otherwise might not exist.

As recently as the 2003 provincial election, accusations that the Saskatchewan Party had a hidden agenda to privatize Saskatchewan’s commercial Crown corporations became a major issue that helped to re-elect the incumbent NDP government. In 2004, the Saskatchewan legislature, with support from all political parties, passed The Crown Corporations Public Ownership Act.2 This legislation specifies nearly all of Saskatchewan’s commercial Crown corporations, and creates a daunting barrier to their potential sale.3 Investment Services Corporation (ISC), a commercial Crown corporation that provides registry services, was not specified in the 2004 legislation.

The times they are a-changin’

It seems that the political climate in Saskatchewan has been changing. In November 2012, the provincial government introduced legislation authorizing the sale of voting shares in ISC and announced that it is contemplating a 60 per cent partial privatization through a stock offering.4 In a 2012 year-end CBC interview, Premier Brad Wall indicated that he would like to provide Saskatchewan voters with a clear policy on the privatization of the province’s commercial Crowns before the next election. Premier Wall said that, “It can’t be about ideology… It has to be what’s pragmatic”, adding that he would welcome a “rational” public discussion about Saskatchewan’s Crown corporations”.5

Both the reasons for the establishment and their commercial nature suggest the parameters of a non-ideological, pragmatic approach to evaluating the commercial Crowns.

• Saskatchewan’s commercial Crown corporation sector represents a large investment of public money, with consolidated assets of about $12.8-billion at September 30, 2012.6 Just as with any other commercial investment, it is pragmatic and prudent to periodically review how these assets have performed, and to assess their situation and outlook.

• Since the Crowns were established for public policy purposes, it is pragmatic and prudent to periodically review whether or not these commercial investments have fulfilled their public policy mandate and to assess the continuing public policy purpose of government ownership.

• Since the Crowns are held in trust for the benefit of the people of Saskatchewan, it is pragmatic and prudent to involve the public in an open, objective and transparent review process.

View entire study as PDF (8 pages)

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