Sunday, May 02, 2010

The reviews are in

Bruce Johnstone slams the Wall government for having already done serious damage to Saskatchewan's Crown corporations while diverting money toward corporate mouthpieces:
(A)s (CIC Minister June Draude) has admitted on several occasions, (the Sask Party's) plundering of CIC for dividends -- representing 100 per cent of the profits of all but one of the Crowns -- is clearly not sustainable.

Crown corporations, like other companies, need their profits to reinvest in their operations and their infrastructure, such as plant and equipment. If they're starved for capital, they either wither and die or their debt gets too big. Neither outcome is desirable.

Also not sustainable is the wholesale confiscation of proceeds from asset sales to pay for ongoing operations. Those proceeds should be used to pay down debt, not spent like any other source of revenue.
(A)sset stripping is not sound business practice, nor is it good public policy. It artificially boosts revenues with one-time gains, while leaving the fix of the over-expenditure problem to another day.

OK, you say, where should the government get the money, if not from the Crowns?

Well, for starters, how about scrapping Enterprise Saskatchewan and Innovation Saskatchewan? What have we received for the $40 million to $65 million a year these agencies spend?

Aside from a lot of talk about building the new economy and investing in innovation, not much.

The Saskatchewan First policy also needs to be scrapped. Crowns have enough constraints on them without being confined within the boundaries of Saskatchewan.

Aside from selling off some profitable assets, like Hospitality Network, (and admittedly a few dogs, like Navigata), what exactly has Saskatchewan First achieved?

Not much, except for allowing even more political direction in the operation of Crown corporations, which the Sask Party government promised would be run more like businesses.
Of course, it'll only get worse now that the Crowns will be forced to make decisions with an eye toward facilitating profits for other provinces' businesses. Which means that if Saskatchewan doesn't change course in 2011, there all too likely won't be viable Crowns left to save.

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