Economics Key to Crown Debate

Crown Corporations, Frontier Centre, Media Appearances, Saskatchewan, Uncategorized

There was a time in this province when one issue was guaranteed to provoke a debate as hot as the current weather: privatization of Saskatchewan's Crown corporations.

From former Progressive Conservative premier Grant Devine's failed attempt to sell SaskEnergy in 1989, to then-Saskatchewan Party leader Elwin Hermanson's illadvised musing during the 2003 election campaign about privatising a major Crown if the right offer came along, the issue has often been an incendiary one, seemingly based more on left-and right-wing political ideology than good economics.

In Devine's case, the NDP Opposition of the day capitalized on public concern and successfully stifled his plan. The NDP went on to win the subsequent election in 1991. Hermanson paid a similar price, the then-NDP government seizing on his remarks to suggest he had a secret agenda to sell off the Crowns. Hermanson's poll lead evaporated and the NDP was returned to power. Selling-off Crown corporations was a non-issue during the 2007 election that brought the Saskatchewan Party to power.

ideology must not decide the future of Sask. Crowns.

New leader Brad Wall said during the campaign the Crowns weren't for sale and in his party's first term, his government stayed well away from the issue.

It's been a different story since Wall's government was re-elected in November 2011. Last fall, the Sask. Party announced a plan to sell 60 per cent of Information Services Corp. (ISC), the Crown responsible for land titles and other records. The share offering is expected to raise $147 million, which the province says will be used on "infrastructure priorities". It was reported last week there's been strong demand in the province for shares – 45 per cent will be allocated to Saskatchewan residents and more than 270 ISC employees – 80 per cent of its workforce – are also expected to become shareholders.

In addition to ISC, the government also this spring announced four new private liquor stores – two each for Regina and Saskatoon. It's a move some critics argue is part of a long-term plan to privatize all liquor sales. The government denies it, saying it has no plans to sell off existing government-run liquor stores.

What's interesting about the above moves is how little public reaction they've generated. Most criticism has come from affected unions and the NDP. It leads to speculation the public is ready to listen to a debate about the future of the Crowns that's based on economic, not ideological concerns.

That's certainly the hope of B.C. investment and financial analyst Ian Madsen, who wants to "spark a debate" on the future of SaskTel. Now, the province insists major Crowns like SaskTel are not for sale, but in a recent study for the Frontier Centre for Public Policy think-tank, Madsen says SaskTel could be worth $2 billion and a sale could be used to pay off debt, lower taxes or improve government services.

Conversely, we'd point out that SaskTel (and other Crowns) consistently generate hefty annual dividends that help pay for government programs. Would it be worth giving that up for a big one-off payday? Let the debate begin.