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Crown corporation

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Crown corporations (French: Société de la Couronne)[1] are government organizations in Canada 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 are distinct from "departmental corporations" such as the Canada Revenue Agency.[2][6]

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, there were 47 federal Crown corporations in Canada.[8] Provinces and territories operate their own Crown corporations independently of the federal government.

Structure

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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 organizations. 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

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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 organizations, while others are non-commercial and rely entirely on public funds to operate.[4]

History

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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.

The Hudson's Bay Company coat of arms

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 privatized company.

The first Crown corporation was the Board of Works, established in 1841 by the Province of Canada to construct shipping canals.[3]

Post-confederation

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The first major Canadian experience with directly state-owned enterprises came during the early growth of the railways. The first Canadian Crown corporation after confederation was the Canadian National Railway Company, created in 1922.[6]

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 federal Post Office Department became a Crown corporation as Canada Post Corporation in 1981, and Canada's export credit agency, Export Development Canada, was created in 1985. Perhaps the most controversial was Petro-Canada, Canada's short-lived attempt to create a national oil Crown corporation, founded in 1975.

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

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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

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Current federal Crown corporations, as of May 2021[12][3]
Name Ministry responsible
Atlantic Pilotage Authority Transport
Atomic Energy of Canada Ltd. Natural Resources
Bank of Canada Finance
Business Development Bank of Canada Industry
Canada Council for the Arts Canadian Heritage
Canada Deposit Insurance Corporation Finance
Canada Development Investment Corporation Finance
Canada Lands Company Public Works and Government Services
Canada Mortgage and Housing Corporation Human Resources
Canada Pension Plan Investment Board Finance
Canada Post Corporation Public Services and Procurement
Canadian Air Transport Security Authority (CATSA) Transport
Canadian Broadcasting Corporation (CBC) Canadian Heritage
Canadian Commercial Corporation Global Affairs
Canadian Dairy Commission Agriculture and Agri-Food
Canadian Museum of History[13] Canadian Heritage
Canadian Museum for Human Rights Canadian Heritage
Canadian Museum of Immigration at Pier 21 Canadian Heritage
Canadian Museum of Nature Canadian Heritage
Canadian Race Relations Foundation Canadian Heritage
Canadian Tourism Commission Industry
Corporation for the Mitigation of Mackenzie Gas Project Impacts Crown–Indigenous Relations and Northern Affairs Canada
Defence Construction Ltd. Public Works and Government Services
Enterprise Cape Breton Corporation Atlantic Canada Opportunities Agency
Export Development Canada Global Affairs
Farm Credit Canada Agriculture and Agri-Food
Federal Bridge Corporation Ltd Transport
Freshwater Fish Marketing Corporation Fisheries and Oceans
Great Lakes Pilotage Authority Transport
Ingenium Canadian Heritage
International Development Research Centre Global Affairs
Laurentian Pilotage Authority Transport
Marine Atlantic Transport
National Arts Centre Corporation Canadian Heritage
National Capital Commission Global Affairs
National Gallery of Canada Canadian Heritage
Old Port of Montreal Corporation Public Works and Government Services
Pacific Pilotage Authority Transport
Parc Downsview Park Inc. Public Works and Government Services
Public Sector Pension Investment Board Treasury Board
Royal Canadian Mint Finance
Standards Council of Canada Industry
Telefilm Canada Canadian Heritage
VIA Rail Canada Inc. Transport
Windsor–Detroit Bridge Authority Infrastructure

List of provincial Crown corporations

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Alberta

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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]

British Columbia

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Main article: List of crown corporations in British Columbia

Manitoba

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Crown corporations in Manitoba are supported by Manitoba Crown Services.[16]

New Brunswick

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Newfoundland and Labrador

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Nova Scotia

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Ontario

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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.[19]

Prince Edward Island

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Quebec

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Finances Quebec published a list 60 Quebec Crown corporations (French: sociétés d'État) in June 2017.[22] The following entities were among those listed:[22]

Saskatchewan

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List of territorial Crown corporations

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Northwest Territories

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Nunavut

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Yukon

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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.[6]

Former Crown corporations, privatized or defunct
Company[6] Privatized/defunct (year) Former jurisdiction Notes
Air Canada privatized (1988) federal
Alberta Government Telephones / BCTel privatized AB; BC now Telus Communications
BC Ferries restructured (2003)[25] BC restructured in 2003 as an independently-managed corporation, though the provincial government still indirectly owns BC Ferries through the BC Ferry Authority.
BC Rail most operations leased to Canadian National Railway between 2004 and 2064 BC
BC Rail Communications privatized (1993) BC formed in 1972 and sold in 1993 as Westel
Blue Water Bridge Authority defunct (2015 federal amalgamated with St. Mary's River Bridge Company to form the Federal Bridge Corporation Limited,
British Columbia Electric Railway privatized BC private company from 1891 to 1961, when it was nationalized and formed into BC Hydro before the rail portion was sold in 1989
British Columbia Resources Investment Corporation defunct (1997) BC
Canada Employment Insurance Financing Board (CEIFB)
Canadair privatized (1946; 1986) federal formed as a Crown corporation in 1944; privatized in 1946 (sold to Electric Boat Company); re-acquired by government in 1976; privatized in 1986 (sold to Bombardier Inc. and merged into Bombardier Aerospace in 1989)
Canadian National Railway privatized (1995) federal
Cape Breton Growth Fund Corporation
Clairtone Sound Corporation Limited defunct NS
CTV Two Alberta privatized (1995) AB formed in 1973; formerly Access TV and Alberta Educational Communications Corporation
de Havilland Canada privatized (1986) federal formed as a private company in 1928, nationalized during World War II, then privatized in 1986
Eldorado Nuclear Limited (previously Eldorado Resources) privatized federal merged with the Saskatchewan Mining Development Corporation and privatized into Cameco Corporation
Enterprise Cape Breton Corporation
Hydro One privatized (2016) ON
Industrial Estates Limited NS
Intercolonial Railway defunct (1918) merged into the Canadian National Railway
Manitoba Telephone System privatized (1996) MB now Bell MTS; formerly MTS and MTS Allstream
Northern Transportation Company Limited federal
Nova Scotia Agricultural College NS now merged into Dalhousie University
Nova Scotia Power 1992 NS formed in 1918
Ontario Highway 407 1999 ON
Petro-Canada privatized (1991) federal
Polymer Corporation
Potash Corporation of Saskatchewan (PCS) privatized (1989) SK
PPP Canada 2018 federal
Ridley Terminals privatized (2019) BC privatized in 2019. Company name change in 2022 to Trigon Pacific Terminals
Saskatchewan Communications Network SK
Saskatchewan Government Airways SK
Saskatchewan Minerals SK
Saskatchewan Mining Development Corporation privatized SK merged with the federally-owned Eldorado Nuclear Limited (formerly Eldorado Mining and Refining) and privatized into Cameco Corporation
Saskatchewan Oil & Gas Corporation SK
SPUDCO
Sydney Steel Corporation dormant NS dormant; remediation and redevelopment of former SYSCO estates now conducted by NSLI and HCPI.[26]
Teleglobe 1987 formed in 1950; privatized in 1987 (to Memotec, later to BCE and finally VSNL) and absorbed into Tata operations in Canada
Telesat
Tourism British Columbia BC formed in 1997
Trade Centre Limited NS succeeded by Halifax Convention Centre Corporation
TrentonWorks NS sold to Daewoo
Wascana Energy

See also

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References

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  1. ^ "Liste des sociétés d'État". Canada.ca (in French). May 15, 2007. Retrieved August 26, 2023.
  2. ^ a b c "Overview of federal organizations and interests". Treasury Board of Canada Secretariat. September 28, 2012. Archived from the original on February 3, 2017. Retrieved May 19, 2021.
  3. ^ a b c d e f g Tupper, Allan. 2006 February 7. "Crown Corporation." The Canadian Encyclopedia (last edited 2021 March 18). Retrieved 2021 May 19.
  4. ^ a b c Aboriginal Affairs and Northern Development Canada. "Aboriginal Peoples and Communities > Governance > Tools for Governance > Governance Tools for Institutions > Establishing and Operating as a Federal Crown Corporation – The DIAND Experience". Queen's Printer for Canada. Archived from the original on October 15, 2012. Retrieved December 5, 2012.
  5. ^ a b Canada Development Investment Corporation (2008), Annual Report 2008 (PDF), Ottawa: Queen's Printer for Canada, p. 13, archived from the original (PDF) on August 6, 2010, retrieved April 21, 2010, Canada Development Investment Corporation... is wholly-owned by Her Majesty in Right of Canada
  6. ^ a b c d e f g h i Stastna, Kazi. "What are Crown corporations and why do they exist?". CBC. Archived from the original on April 2, 2012. Retrieved May 19, 2021.
  7. ^ a b "Directors of Crown corporations: an introductory guide to their roles and responsibilities – What is a Crown Corporation". Treasury Board of Canada Secretariat. December 20, 2002. Archived from the original on April 19, 2019. Retrieved June 7, 2020.
  8. ^ Secretariat, Treasury Board of Canada (May 15, 2007). "List of Crown corporations". canada.ca. Retrieved March 22, 2022.
  9. ^ Treasury Board of Canada Secretariat. "Government Operations Sector > Governance > Agent Status and Crown Corporations". Queen's Printer for Canada. Archived from the original on May 30, 2013. Retrieved December 5, 2012.
  10. ^ Galbraith, John S. (1957). The Hudson's Bay Company As An Imperial Factor 1821–1869. Berkeley and Los Angeles: University of California Press.
  11. ^ Meeting the Expectations of Canadians: Review of the Governance Framework for Canada's Crown Corporations (PDF) (Report). Treasury Board of Canada Secretariat. 2005. p. 9. ISBN 0-662-68755-8. Retrieved October 8, 2023.
  12. ^ "List of Crown corporations". Treasury Board of Canada Secretariat. March 29, 2021. Archived from the original on April 1, 2020. Retrieved May 19, 2021.
  13. ^ "About | Canadian Museum of History". Retrieved May 19, 2021.
  14. ^ "How the Alberta government works". Government of Alberta. Retrieved March 6, 2020.
  15. ^ BC Pavilion Corporation Official website
  16. ^ "Crown Services | Province of Manitoba". Province of Manitoba – Crown Services. Retrieved May 19, 2021.
  17. ^ "Manitoba Agricultural Services Corporation (MASC)". www.masc.mb.ca. Retrieved May 19, 2021.
  18. ^ Financial and Consumer Services Commission
  19. ^ Crown Agency Act, R.S.O. 1990, c. 48.
  20. ^ "About Infrastructure Ontario".
  21. ^ "Owen Sound Transportation Company Limited 2018/19 Annual Report" (PDF). ontarioferries.com. Retrieved June 23, 2024.
  22. ^ a b Finances Québec (June 2017). "Liste des sociétés d'État" (PDF). Finances.Gouv.Qc.ca (in French). Retrieved July 9, 2019.
  23. ^ 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. ISBN 978-2-8931-0010-4. OCLC 17477765. OL 15247561M.
  24. ^ "Library of Congress Name Authority File (LCNAF): Musée du Québec". Library of Congress Linked Data Service. Retrieved July 9, 2019. ...founded in 1933; became a 'société d'état' Dec. 22, 1983;...
  25. ^ "Bill 18 – 2003: Coastal Ferry Act". Legislative Assembly of British Columbia. March 26, 2003. Retrieved March 17, 2023.
  26. ^ "Sydney Steel Corporation Business Plan 2011–2012" (PDF). Sydney Steel Corporation. Retrieved April 15, 2014. The plan for Sysco during the 2011–2012 fiscal year is to continue to wind up activities and have the corporation remain dormant.

Further reading

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