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Crown corporation

Government enterprises in Canada From Wikipedia, the free encyclopedia

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Crown corporation (French: Société de la Couronne)[1] is the term used in Canada for organizations that are structured like private companies, but are directly and wholly owned by the government.[2][3] Crown corporations have a long-standing presence in the country, and have a significant economic impact, with commercial operations equivalent to 7% of Canadian GDP.[4]

Crown corporations are created to advance government policy objectives. Often they provide services to the public that are not economically viable for a private enterprise, or that do not fit exactly within the scope of any ministry.[5] They represent a form of state-owned enterprise.[6][7][5]

Crown corporations are established by an act of parliament or an act of a provincial legislature. Federal government Crowns report to the relevant minister in Cabinet, though they are "shielded from constant government intervention and legislative oversight" and thus "generally enjoy greater freedom from direct political control than government departments."[8][3]

As of 2022, there were 47 federal Crown corporations in Canada.[9] Provinces operate their own Crown corporations independently of the federal government.[5]

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Definition

There is no common definition of a Crown corporation among Canadian governments.[10] In its review of state-owned enterprise (SOE) governance in 54 countries, the OECD notes that in Canada, federal government SOEs are referred to as "Crown corporations."[11]

The Canadian federal government defines its Crown corporations as corporations that (1) are wholly owned by the government; (2) have enabling legislation which sets out the corporation's mandate, powers, and objectives; and (3) operate at arm's length from the government, but are ultimately accountable to the government.[10]: 6 [12]

While the term "Crown corporation" is widely used in Canada, the province of Ontario refers to its government-owned entities as "agencies".[13][10]: 7 

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Economic impact

Crown corporations have a considerable economic footprint, with annual commercial operations equivalent to 7% of Canadian GDP.[4] In 2023, government business enterprises had revenues of $199 billion, of which $120 was generated at the provincial and territorial level, $43 at the federal level, and $36 billion at the local level.[14]

There were 47 federal Crown corporations in 2022.[9] In 2025, Ontario had over 170 agencies, and British Columbia had 29 Crown corporations.[13][15] There are hundreds of local government-owned enterprises that are sometimes referred to as Crown corporations. They provide local services such as electricity, potable and wastewater services, and public transit (ie, Metro Vancouver's public transit authority Translink).[10]: 6–7 

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Purpose

As long as Crown corporations have existed, there has been debate about their role and whether they should exist at all.[3][5] Crown corporations are generally formed to fill a need that the government deems in the public or national interest, and that may not be profitable for private industry to provide.[5] For example, Air Canada was created to be an active competitor in a market where competition and service was viewed as inadequate.[10]: 8  Some Crown corporations are expected to be profitable organizations, while others are non-commercial and rely entirely on public funds to operate.[6]

Structure

Ownership and accountability

In Canada, Crown corporations are directly owned by the government as the enterprise's sole legal shareholder.[6][7][5] (Governments in Canada are sometimes referred to as "the Crown".[2]) Established by an act of parliament, each Crown corporation is ultimately accountable for the conduct of its affairs to the federal parliament or a provincial legislature through the relevant minister.[8]

Although Crown corporations are owned by the government, they are operated with much greater managerial autonomy than government departments. They generally enjoy greater freedom from direct political control than government departments since they are "shielded from constant government intervention and legislative oversight".[3] The government can, however, have the minister responsible issue a directive to the board of directors ordering them to take a specific action; and the government carries out periodic mandate reviews to assess crown corporations' performance and cost-effectiveness.[5]

Crown corporations differ from "departmental corporations" (such as the Canada Revenue Agency and the Canadian Food Inspection Agency) which have no commercial purpose and perform only administrative, research, advisory, or regulatory functions.[5][3] In the federal sphere, certain Crown corporations can be an agent or non-agent of the government. One with agent status is entitled to the same constitutional prerogatives, privileges, and immunities held by the government and can bind the government by its acts. The government is not liable for Crown corporations with non-agent status, except for actions of that corporation carried out on instruction from the government, though there may be "moral obligations" on the part of the government in other circumstances.[16]

Provincial Crown corporations

Provincial Crown corporations function similarly to their federal counterparts in that they are accountable to the provincial government, and their directors are appointed by the provincial cabinet.[5] Areas in which provincial Crown corporations have traditionally been involved include utilities (e.g., Hydro-Québec), liquor stores and gaming (e.g., Alcohol and Gaming Commission of Ontario), telecommunications (e.g., SaskTel), and auto insurance (e.g., Insurance Corporation of British Columbia).

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History

Crown corporations have been created to provide important services in Canada - a large, sparsely populated country - usually because the private sector was unable or unwilling to provide such services.[3] The first Canadian Crown corporation was the Board of Works, established in 1841 by the Province of Canada to construct shipping canals.[3] Many of the most significant crown corporations created in the 20th century were designed to meet transportation needs.[3] These include the Canadian National Railway Company (CN), created in 1922 from more than 200 companies, Air Canada, and the St. Lawrence Seaway Authority.[5][17]

The Bank of Canada, originally privately owned, became a Crown corporation in 1938.[5][18] After the Second World War, federal crown corporations were created to provide loans and financial services to groups whose needs were not always met by private institutions, such as farmers (Farm Credit Corporation), small businesses (Business Development Bank of Canada), and exporters (Export Development Canada).[3]

Crown corporations have been most common in transport, telecommunications, utilities, and power generation, but they have also been involved in alcohol sales, gaming, finance, insurance, agriculture, culture and other industries.[5] Significant crown corporations include Petro-Canada, which was founded in 1975 to create a national oil Crown corporation; and Canada Post Corporation, which in 1981 replaced the federal Post Office Department.

In the 1970s, a debate emerged about the role and effectiveness of crown corporations, and whether they had become too prominent in the economy.[3] Inspired by Margaret Thatcher's sell-off of state assets in Britain in the 1980s, Canadian Prime Minister Brian Mulroney privatized many of Canada's Crown corporations, including Air Canada, Petro-Canada, and Canadair.[3] Sectors that were once dominated by Crown corporations, such as telecommunications, were almost fully privatized. For example, most provinces sold off their phone companies in the 1990s.[5] British Columbia sold off parts of BC Hydro, Saskatchewan privatized PotashCorp, the world's largest producer of fertilizer, and Nova Scotia privatized its electricity company Nova Scotia Power.[5] Alberta privatized its liquor stores in 1996, although in this case, most other provinces did not follow suit.[5] Nevertheless, some new crown corporations have since been created, such as the Canadian Air Transport Security Authority (CATSA) which was formed in response to the 11 September 2001 attacks to provide passenger and baggage screening at airports (rather than leave it to airlines).[3]

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List of federal Crown corporations

More information Name, Ministry responsible ...
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List of provincial Crown corporations

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Alberta

In Alberta, the term public agency is used to describe "boards, commissions, tribunals or other organizations established by government, but not part of a government department."[21]

British Columbia

Main article: List of crown corporations in British Columbia

Manitoba

Crown corporations in Manitoba are supported by Manitoba Crown Services.[23]

New Brunswick

Newfoundland and Labrador

Nova Scotia

Ontario

Crown corporations in Ontario are referred to as Crown agencies. A Crown agency includes any board, commission, railway, public utility, university, factory, company or agency that is established or operated by the King in Right of Ontario or the Government of Ontario, or under the authority of the Legislature or the Lieutenant Governor-in-Council.[26]

Prince Edward Island

Main article: List of Prince Edward Island Government Agencies and Crown Corporations
  • Charlottetown Area Development Corporation
  • Innovation PEI
  • Island Investment Development Inc.
  • P.E.I. Student Financial Assistance Corporation
  • Island Waste Management Corporation
  • P.E.I. Aquaculture and Fisheries Research Initiative Inc.
  • Prince Edward Island Agricultural Insurance Corporation
  • Prince Edward Island Energy Corporation
  • Prince Edward Island Grain Elevators Corporation
  • Prince Edward Island Liquor Control Commission
  • Prince Edward Island Self-Insurance and Risk Management Fund
  • Summerside Regional Development Corporation

Saskatchewan

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List of territorial Crown corporations

Northwest Territories

Nunavut

Yukon

Former Crown corporations

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See also: Category:Former Crown corporations of Canada and List of privatizations

Several private Canadian companies were once Crown corporations, while others have gone defunct.[5]

More information Company, Privatized/defunct (year) ...
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See also

References

Further reading

External links

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