Friday, April 18, 2008

Sask Crowns: Opportunities gained and lost

The Saskatchewan Party Government, elected last November, promised not to privatize any of the province's crown corporations. NDP fear-mongering over this issue should be balanced with a look at what the benefits really have been--and could have been--had some of these crowns been privatized.

Recently, John Gormley stated the case succinctly for PotashCorp:

A few months ago, the internationally successful Potash Corp. of Saskatchewan mentioned the value of its stock had risen 5,600 per cent since it first issued shares in 1989.

This is the same company that was once a money-losing dog of a Crown corporation, which was privatized in the late '80s.

If you had purchased $1,000 worth of PotashCorp shares in November 1989 they would have grown to a value to $56,000.

Since that announcement four months ago, that $56,000 would now be worth about $88,000.

At least the Sask Party government did introduce Bill 3, which repeals the 1975 Potash Development Act that allowed the province to expropriate private property and assets related to potash. Rick Mercer should travel to the States so Americans can say, "Congratulations, Saskatchewan, on abandoning Communism!"


A comparison of how Manitoba's MTS and SaskTel have fared since the former was privatized in 1996 is also quite Tel-tale. As the Frontier Centre explains, "None of the traditional fears relating to privatized businesses has materialized. After slightly over a decade, MTS has twice the assets, three times the revenue, and a fifth more jobs compared to SaskTel. Prices are the same and Manitoba’s local telco pays more taxes."


How many other opportunities have been lost? At present, Saskatchewan is holding onto all of its crowns, including a bus company that lost $400,000 last year, despite a $5 million grant from the province. Sadly, this is actually a typical year for Saskatchewan Transportation Corporation.

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