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CROWN CORPORATION
Sociologyindex, Sociology Books 2011
Crown corporation is a corporate organization established by government, but
having a separate legal and organizational identity from the government itself.
Crown corporations have been established in a wide variety of social and economic
sectors including transportation, mining and manufacture, communication and financial
services.
Federal Crown corporations are arm’s length corporate entities established to
pursue public policy and commercial objectives. They are wholly owned by the government
but are not normally subject to the government’s human resource and administrative
policies. The governance framework for Crown corporations varies with the commercial
environment in which each corporation operates and the extent to which a corporation
depends on parliamentary appropriations for its funding.
Crown Corporation are wholly owned federal or provincial organization which are structured
like private or independent enterprises. Crown Corporation are established to carry out
regulatory, advisory, administrative, financial or other services or to provide goods and
services, generally enjoying greater freedom from direct political control than government
departments. Although the 1951 federal Financial Administration Act (FAA) declared that
crown corporations are "ultimately accountable, through a minister, to Parliament,
for the conduct of (their) affairs," they are not subject to budgetary systems or
direct control of a minister in the same way as government departments.
From thecanadianencyclopedia.com: The first crown corporation, the Board
of Works, was established in 1841 to construct a canal system in the Province of Canada.
Crown corporations such as CANADIAN NATIONAL RAILWAYS, PETRO-CANADA and several provincial
hydro firms now rank among Canada's largest enterprises.
Provincial crown corporations are also significant, although differences exist in their
roles, economic importance and administration. In most provinces crown corporations are
responsible for the generation and transmission of electricity and the retail distribution
of liquor. In the Prairie provinces, telephone service is usually provided by crown
corporations.
Crown corporations assume special prominence in Québec and Saskatchewan. In Saskatchewan,
crown corporations were extended deep into the provincial economy after the CCF's landmark
electoral victory in 1944.
A central rationale of crown corporations is that the commercial activities of
government, to be performed successfully, must be shielded from constant government
intervention and legislative oversight. Hence, crown corporations enjoy greater
administrative freedom than government departments. As government enterprises, however,
their autonomy cannot be absolute and must be tempered by some public control over
policy-making. The Canadian experience suggests that the imperatives of corporate
autonomy, government control, and legislative oversight are often conflicting and
difficult to reconcile.
The range of controls and influences over federal crown corporations has developed
piecemeal. But a key element was section VIII of the FAA which in 1951 established a
regime of financial controls over most crown corporations.
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