Crown corporations in Canada (French: sociétés d'État)[1] are government organizations with a mixture of commercial and public-policy objectives.[2][3] They are directly and wholly owned by the Crown (i.e. the government of Canada or a province).[2]
Crown corporations represent a specific form of state-owned enterprise.[4][5][6] Each corporation is ultimately accountable to (federal or provincial) Parliament through a relevant minister for the conduct of its affairs.[7] They are established by an Act of Parliament and report to that body via 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."[3]
Crown corporations have a long-standing presence in the country and have been instrumental in its formation. They can provide services required by the public that otherwise would not be economically viable as a private enterprise or that do not fit exactly within the scope of any ministry.[6] They are involved in everything from the distribution, use, and price of certain goods and services to energy development, resource extraction, public transportation, cultural promotion, and property management.
As of 2022[update], there were 47 federal Crown corporations in Canada.[8] Provinces and territories operate their own Crown corporations independently of the federal government.
Structure
In Canada, Crown corporations within either the federal or provincial level are owned by the Crown as the institution's sole legal shareholder.[4][5][6] This follows the legal premise that the monarch, as the personification of Canada, owns all state property.
Established by an Act of Parliament, each corporation is ultimately accountable to (federal or provincial) Parliament through a relevant minister for the conduct of its affairs.[7]
Although these corporations are owned by the Crown, they are operated with much greater managerial autonomy than government departments. While they report to Parliament via the relevant minister in Cabinet, they are "shielded from constant government intervention and legislative oversight" and thus "generally enjoy greater freedom from direct political control than government departments."[3] Direct control over operations are only exerted over the corporation's budget and the appointment of its senior leadership through Orders-in-Council.
Further, in the federal sphere, certain Crown corporations can be an agent or non-agent of the Crown. One with agent status is entitled to the same constitutional prerogatives, privileges, and immunities held by the Crown and can bind the Crown by its acts. The Crown is thus entirely responsible for the actions of these organisations. The Crown 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 Crown in other circumstances.[9]
Function
Crown corporations are generally formed to fill a need that the federal or provincial government deems in the national interest or not profitable for private industry.[6] Some Crown corporations are expected to be profitable organisations, while others are non-commercial and rely entirely on public funds to operate.[4]
Prior to the formation of Crown corporations as presently understood, much of what later became Canada was settled and governed by a similar type of entity called a chartered company. These companies were established by a royal charter by the Scottish, English, or French crown, but were owned by private investors. They fulfilled the dual roles of promoting government policy abroad and making a return for shareholders. Certain companies were mainly trading businesses, but some were given a mandate (by royal charter) to govern a specific territory called a charter colony, and the head of this colony, called a proprietary governor, was both a business manager and the governing authority in the area. The first colonies on the island of Newfoundland were founded in this manner, between 1610 and 1728.
Canada's most famous and influential chartered company was the Hudson's Bay Company (HBC), founded on May 2, 1670, by royal charter of King Charles II. The HBC became the world's largest land owner, at one point overseeing 7,770,000 km2 (3,000,000 sq mi),[10] territories that today incorporate the provinces of Manitoba, Saskatchewan and Alberta, as well as Nunavut, the Northwest Territories, and Yukon. The HBC were often the point of first contact between the colonial government and First Nations. By the late 19th century, however, the HBC lost its monopoly over Rupert's Land and became a fully privatised company.
The first Crown corporation was the Board of Works, established in 1841 by the Province of Canada to construct shipping canals.[3]
During the earlier part of the century, many British North American colonies that now comprise the Canadian federation had Crown corporations, often in the form of railways, such as the Nova Scotia Railway, since there was limited private capital available for such endeavours. When three British colonies joined to create the Canadian federation in 1867, these railways were transferred to the new central government. As well, the construction of the Intercolonial Railway between them was one of the terms of the new constitution. The first section of this entirely government-owned railway was completed in 1872.
Western Canada's early railways were all run by privately owned companies backed by government subsidies and loans. By the early twentieth century, however, many of these had become bankrupt. The federal government nationalised several failing Western railways and combined them with its existing Intercolonial and other line in the East to create Canadian National Railways (CNR) in 1918 as a transcontinental system. The CNR was unique in that it was a conglomerate, and besides passenger and freight rail, it had inherited major business interests in shipping, hotels, and telegraphy and was able create new lines of business in broadcasting and air travel. Many of the components of this business empire were later spun off into new Crown corporations including some the most important businesses in the mid-20th-century economy of Canada, such Air Canada, the Canadian Broadcasting Corporation (CBC), Via Rail, and Marine Atlantic.
Provincial Crown corporations also re-emerged in the early 20th century, most notably in the selling of alcohol. Government monopoly liquor stores were seen as a compromise between the recently ended era of Prohibition in Canada and the excesses of the previous open market which had led to calls for prohibition in the first place. Virtually all the provinces used this system at one point. The largest of these government liquor businesses, the Liquor Control Board of Ontario (founded 1927), was by 2008 one of the world's largest alcohol retailers. Resource and utility crown corporations also emerged at this time, notably Ontario Hydro and Alberta Government Telephones in 1906, and SaskTel in 1908. Provincial governments also re-entered the railway business as in Northern Alberta Railways in 1925 and what later became BC Rail in 1918. A notable anomaly of this era is Canada's only provincially owned "bank" (though not called that for legal reasons) Alberta Treasury Branches, created in 1937.
The Bank of Canada, originally privately owned, became a Crown corporation in 1938.[6][11] New crown Corporations were also created throughout much of the mid-century.[3]
The heyday of Crown corporations ended in the late 1980s, and there has been much privatisation since that time, particularly at the federal level.[3]
Provincial history
Not only the federal government was involved, but also the provinces, who were in engaged in an era of "province building" (expanding the reach and importance of the provincial governments) around this time. The prototypical example is Hydro-Québec, founded in 1944 and now Canada's largest electricity generator and the world's largest producer of hydro-electricity. It is widely seen as a symbol of modern Quebec, helping to create the Quiet Revolution of the 1960s where French-speakers in Quebec rose to positions of influence in the industrial economy for the first time, and Quebec nationalism emerged as a political force. This model followed by SaskPower in 1944 and BC Hydro in 1961. Other areas provinces were active in included insurance (Saskatchewan Government Insurance, 1945)
List of federal Crown corporations
Current federal Crown corporations, as of May 2021[update][12][3]
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."[14]
Crown corporations in Ontario are sometimes referred to as Crown agencies. A Crown agency includes any board, commission, railway, public utility, university, factory, company or agency owned, controlled 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.[19]
Prince Edward Island Self-Insurance and Risk Management Fund
Summerside Regional Development Corporation
Quebec
Finances Québec published a list 60 Quebec Crown corporations (French: sociétés d'État) in June 2017.[21] The following entities were among those listed:[21]
^ abCanada Development Investment Corporation (2008), Annual Report 2008(PDF), Ottawa: Queen's Printer for Canada, p. 13, archived from the original(PDF) on 6 August 2010, retrieved 21 April 2010, Canada Development Investment Corporation... is wholly-owned by Her Majesty in Right of Canada
^Société d'énergie de la Baie James (1987). Le Complexe hydroélectrique de La Grande-Rivière : réalisation de la première phase [The La Grande hydroelectric complex : phase one development] (in French). Montréal: Éditions de la Chenelière. p. 2. ISBN978-2-8931-0010-4. OCLC17477765. OL15247561M.
^"Sydney Steel Corporation Business Plan 2011–2012"(PDF). Sydney Steel Corporation. Retrieved 15 April 2014. The plan for Sysco during the 2011–2012 fiscal year is to continue to wind up activities and have the corporation remain dormant.
