Privatization of Crown Corporations in Saskatchewan

Crown corporations have had a long history in Saskatchewan. The creation of these corporations began by the Territorial Government in 1901 when hail insurance was sold to farmers. In 1944, […]
Published on January 1, 2018

Crown corporations have had a long history in Saskatchewan. The creation of these corporations began by the Territorial Government in 1901 when hail insurance was sold to farmers. In 1944, Saskatchewan elected Tommy Douglas, leader of the CCF, as premier. A great wave of creating Crown corporations began. But, almost 40 years later, a wave of privatizing many of those Crown corporations took place during the Devine Conservative era from 1982 to 1991. Ultimately, the Devine government privatized nine Saskatchewan Crown corporations.

There is a considerable literature on the economic outcomes of privatization. Most of the literature suggests that privatization increases efficiency and improves the company’s productivity and improves the provincial economy. The Crown corporations considered in this paper are Potash Corporation of Saskatchewan and Cameco. Both of these corporations had, after 5 years in the private sector, particularly large reductions in their debt ratio, and outperformed the TSE index. Thus, it is quite clear that “ownership matters”. This study provides considerable evidence that governments should not be directly involvement in funding and managing businesses. Often government involvement does not result in profitable businesses that create economic value.

Read the entire study here: FC209_PrivCrownCorpSK_JA0918_F2

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