The SaskPower head office in Regina. Photo by Daryl Mitchell via Wikimedia Commons, CC BY-SA 2.0.

Crowns do it better

Crown corporations – companies managed by the government on behalf of residents – have a long history in Saskatchewan, predating the province itself. Crowns emerged from the understanding that private industry was unwilling or unable to provide access to essential services for everyone in Saskatchewan. “They were set up because the kinds of services they provide were not being provided to a lot of people in the province. Like telephone service, electric power – they were slow to come to rural parts of the province,” says Paul Gingrich, professor emeritus at the University of Regina and the author of numerous papers on the economy of Saskatchewan.

Simon Enoch, director of the Saskatchewan office of the Canadian Centre for Policy Alternatives (CCPA), adds that “Saskatchewan’s experiment with Crown corporations was based on being a very large [and sparsely populated] province with tremendous distances in between [communities]. Crown corporations were the stepping stone in order for us to be able to develop the way we wanted to. They were essential for Saskatchewan’s development.” 

“They were set up because the kinds of services they provide were not being provided to a lot of people in the province. Like telephone service, electric power – they were slow to come to rural parts of the province.”

But the very success of Crowns is now making them seem, in the eyes of the Sask Party, ripe to be sold to the private sector. “The problem is that now we’ve done all the development, now they look extremely appetizing for privatization,” Enoch says. “We’ve done all the hard work. We’ve built all the infrastructure. We built all the land lines. We built all the electrification. Now that all the hard work is done, and we’re reaping the benefits, then the private sector sort of licks its chops.”

Since the territorial government first started selling hail insurance in 1901, four years before Saskatchewan joined Confederation, Crowns have expanded to provide insurance, electricity, natural gas, internet and telephone services, infrastructure, transportation, and recreation throughout the province as well as extracting uranium, potash, and oil and gas. Gingrich says that in addition to providing goods and services, Crowns “provide a certain degree of stability in that most of the workers there are unionized and wages are relatively good and the employment is a little more stable than some of the private sector.” Enoch agrees, adding, “as far as employment and wages and benefits go, the public sector is far superior to the private sector.” 

Enoch notes that equity hiring is another benefit of publicly owned enterprises: the Indigenous population in Saskatchewan has an 8.2 per cent employment rate in the private sector, whereas in the Crown sector it’s 11 per cent. “You can ensure equity hiring through mandating policies in the Crown sector that you can’t really do in the private sector,” he explains. It’s particularly important in this province, where the disparity between the job opportunities available to Indigenous and non-Indigenous workers is among the highest in the country.

"Now that all the hard work is done, and we’re reaping the benefits, then the private sector sort of licks its chops.”

But despite the benefits of public ownership, beginning in the 1980s, with the second election of Grant Devine in Saskatchewan in 1986 and Brian Mulroney in Ottawa in 1984, Devine’s Tories embraced the neoliberal privatization agenda preached by Margaret Thatcher – that is, they started selling off Crowns to pay their mounting debts. Enoch says that Crowns – their sale and their revenues – have long been used to keep governments, like the current one, in the black. “This government is notorious for taking almost 90 per cent of [Crowns’] profits and applying them to debts and deficits so it looks like they have a balanced budget. If it wasn’t for those Crowns, the Sask Party would have an even worse history in regards to debts and deficits.”

Privatization – which had slowed but not quite stopped in the NDP governments of Roy Romanow and Lorne Calvert that followed Devine’s 1991 electoral defeat – accelerated in the years following the Sask Party’s 2007 win. In 2017, the Canadian Centre for Policy Alternatives compiled a list of Crown sell-offs, public-private partnerships (P3s), and other acts of – or legislation for – increasing privatization that took place over the preceding decade, a period that covered the emergence of the Sask Party, reborn from the ashes of the Progressive Conservatives and now in their 13th year of power. The report estimated that “the Saskatchewan Party government has sold over $1.1 billion in public assets and eliminated at least 1,227 public sector jobs via privatization and outsourcing.” The party has carried on with its privatization agenda in the years since the report was published, including the 2017 dismantling of the Saskatchewan Transportation Company and the creeping privatization of liquor stores.

“The Saskatchewan Party government has sold over $1.1 billion in public assets and eliminated at least 1,227 public sector jobs via privatization and outsourcing.”

Enoch says that part of the reason that privatization increases during conservative governments is that “the conservative ideology is fundamentally against the purpose of the Crown corporation.” He adds that “what a Crown corporation is, primarily, is a way of saying, ‘the market’s not working.’” He notes that Crowns, which provide public services to rural and remote communities where private companies cannot turn a profit, are “sort of a testament to market failure. And conservatives rarely want to admit that markets fail.”

When Crowns are privatized, the price paid – in lost jobs, in revenue moved out of province, in increasingly expensive goods and services, and in independence – is high, and not all of the costs are immediately obvious. “One of the big things that’s rarely commented on when a Crown corporation or any publicly owned company goes private is a loss of transparency,” Enoch says. “Government is accountable to its citizens. It tends to be very open with its finances, where private corporations aren’t anywhere as beholden to the sort of accountability and transparency that governments are.” 

Although other provinces have Crown corporations, Enoch says that “the fact that we have managed to maintain so many Crown corporations and haven’t privatized them is an example of the unique geographical and political economy of the province.” And just as Crown corporations helped build this province, they will be invaluable for its future. As the consequences of the climate crisis begin to strike home – the northeast of the province was hit by “unprecedented” flooding in July 2020 – Enoch says Saskatchewan will be “so lucky” to have Crowns, particularly the Crown utilities. “We have the ability to say to SaskPower, SaskEnergy, ‘You know what, you’re going to lose money but you’re going to create a green, renewable power system.’ We have the power to do that because of publicly owned, democratically controlled Crowns.”

“Government is accountable to its citizens. It tends to be very open with its finances, where private corporations aren’t anywhere as beholden to the sort of accountability and transparency that governments are.” 

In her 2014 book This Changes Everything: Capitalism vs. the Climate, environmental activist and author Naomi Klein stressed the importance of public ownership of much of the power grid in Germany’s transition to renewable energy. That country has been transitioning steadily toward renewables, away from coal and oil, since the early 2000s. In early 2019, Germany reached a climate milestone in which renewable power sources generated 65 per cent of electricity for a week, although a February 2020 report from the International Energy Agency says Germany is still falling short of its near-term emissions reduction targets.

So far, SaskEnergy and SaskPower have been slow to switch to renewables, but Enoch says that what’s lacking is not the ability, but the political will. “There has to be an executive decision that we’re going to use our Crowns to create really aggressive climate targets,” he says. “The whole point of Crown corporations is that it’s not limited to pure profitability, that it has a mission outside that, whether that’s economic development in the province, whether that’s environmental goals, whether that’s social goals, whether that’s equity hiring, whether that’s training. It’s important that the people of Saskatchewan recognize the uniqueness of Crown corporations and put pressure on their leaders to ensure that Crown corporations meet those sorts of goals.”

“We have the ability to say to SaskPower, SaskEnergy, ‘You know what, you’re going to lose money but you’re going to create a green, renewable power system.’ We have the power to do that because of publicly owned, democratically controlled Crowns.”

It’s something that’s just not possible for the profit-driven private sector. “We could give [the Crown utilities] the freedom to experiment. Give them the freedom to innovate. Say, ‘You know what, you don’t have to return dividends or profits for the next five, 10 years. Your priority goal is to decarbonize and we don’t care how you do it. It doesn’t have to be profitable.’ And that’s something a private utility can never do. It allows a freedom of action that just can’t be duplicated under a market system,” Enoch explains.

Crowns once helped this province reach its potential. They have the ability now to be a major component of a bold transformation to an equitable and truly democratic future for Saskatchewan and its people. Saskatchewan was built on the dispossession of Cree, Dakota, Lakota, Nakota, Saulteaux, Métis, and Dene Peoples. Democratically controlled Crowns have the ability to restore some power – both literally and figuratively – to those peoples, not only through well-paying jobs, but through agreements like the one between SaskPower and First Nations Power Authority (FNPA), which will see First Nations-led solar projects bring 20 megawatts of power to the provincial grid. 

Across the world, governments are struggling to force private companies to put people before profits, in the face of environmental and economic collapse. Saskatchewan’s enviable Crown corporations put us in a strong position to make more humane choices. What we need now is the political will to use Crowns to mitigate our role in climate change and build a more just future.

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