Free Essay: Crown Corporations
According to the Canadian Encyclopaedia, crown corporations are ‘wholly owned federal or provincial organizations that are structured like private or independent companies’. Some of the most important crown corporations include: the Bank of Canada, the Canadian Broadcasting Corporation, Canada Post, VIA Rail and many others. These enterprises enjoy some freedom away from political and government control. For these reason, economists have described crown corporations as being hybrid entities between private enterprises and government bodies.
Basically, crown corporations are created to further certain government agendas. They are instruments used to achieve certain public policies. This however does not rule out the fact that they are commercial entities as well. It is therefore a tricky balance trying to achieve their financial aims as well as address issues to do with public policy. Crown corporations have to deal with the looming competition from other players in their line of business as well this has been known to create conflict of interest at times.
The very essence of the crown corporations is to meet public needs that the private sector may not be interested in doing because of the lack of profitability of the same. For example, crown corporations invest in commuter transportation business to areas with small populations. Private businesses cannot indulge in such business because it does not promise profits. Crown corporations like the Marine Atlantic offer ferry services between Nova Scotia and Newfoundland. All these are activities that are geared towards meeting specific public policies.
The government also employs crown corporations to handle some tasks that they feel the private sector will not handle as adequately. These functions may not necessarily be of the federal of provincial departments. For example, licensing of marine pilots is done by a crown corporation known as the Atlantic Pilotage Authority. Crown corporations can also be involved in carrying out provincial property assessments, investing of the assets of the Canada Pension Plan among many other activities.
- Alcohol sales
- Business development
- Power generation
The source of funding for crown corporations is mostly from government however, the percentage varies. Some enterprises get all their funding from the government while some that make enough money are fully self-reliant. The government collects revenue from the income generated by the crown corporations.
The profit making crown corporation enjoy greater autonomy in comparison to other crown corporations. The influence of the government concerning major decisions in the corporations is not existent. They have to come up with unique strategies in order to remain relevant in their market and to keep pace with the competition of the day. This means that they are not obligated to deliver a comprehensive annual report like the other crown corporations.
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