Bill 40 creating uncertainty about future of Crowns

Many concerned about rule allowing partial sale of the publicly owned firms

As the Crown Investments Corporation’s (CIC) annual report for 2016-17 emphasizes a new era of “transformational change,” many in Saskatchewan continue to worry that change could mean less ownership for the people of the province.

By the time the Saskatchewan Party passed the controversial Bill 40 at the end of April — which allows for the sale of up to 49 per cent of Crowns — discussions surrounding partial sales of SGI and SaskTel had already begun.

Joe Hargrave, minister of Crown investments, said there hasn’t been any real discussion surrounding partial sales of any other Crowns, but believes the opportunities for outside investment afforded by Bill 40 can help strengthen Crown corporations’ economic standing.

In the minister’s message included in the CIC report, Hargrave cites the recent economic downturn as one of the worst in decades.

“However, we do have the Crown sector, and while we know it is an asset that our people are proud of, we must also leverage that asset to help return the province to a balanced budget,” wrote Hargrave.

He said any interest in invoking Bill 40 for any other Crowns would depend on the partnership. According to Hargrave, only partnerships that keep utility rates low, protect and create jobs in Saskatchewan and keep head offices in the province will be considered.

When asked whether or not Crowns are being encouraged to seek partnerships or buyers in order to compensate for the province’s $1.3-billion deficit, Hargrave said the announcement of Bill 40 rippled through industries “dramatically.” He said discussions about what the bill means and what Crowns can do with it have been occurring since the announcement, but did not say whether the corporations are receiving pressure from the provincial government to actively seek outside investors.

NDP MLA Carla Beck is skeptical of the push for partial sales of the province’s Crowns. She said Crown corporations provide equitable services throughout the province, but “all those things are in jeopardy if we look at a sale of up to 49 per cent of any of them.”

But Hargrave said no deals would be made that are not in the best interests of the Saskatchewan people.

“If it doesn’t benefit the people of the province for the long term, there’s not a deal that’s going to happen. It’s that simple,” said Hargrave. He said long-term prospects would be analyzed by experts at the Crowns and at CIC in order to forecast the profitability of a potential partnership or partial sale.

Despite the economic downturn in recent years, the province’s Crowns have done well. CIC, on behalf of all Crowns, paid $219 million into the general revenue fund — which is more than the budgeted goal of $204 million — and Crown sector net earnings totalled $398.6 million in 2016-17.

Hargrave said outside investments in Crowns have the potential to further improve that bottom line.

Consolidated debt increased by $366.2 million, which was attributed to inflation and the need to invest in infrastructure across the sector.

The Global Transportation Hub annual report was also released Friday. The GTH projected revenue of $15 million and expenses of $10.3 million, but only made a revenue of $4.8 million and expenses totalling $6.3 million, resulting in a deficit of $1.5 million.