Together, local, provincial, and federal Crown corporations in Canada brought in annual revenues of $162 billion in 2019, equivalent to 7 percent of the country’s GDP.
Federal and provincial Crowns had net assets of nearly $1.4 trillion in 2019, and net worth of almost $22.9 billion. They also generated a small collective net operating loss of $400 million.
Looking at this financial data for the C.D. Howe Institute, Glen Hodgson writes that while Crowns have significant operating scale, the operating deficit suggests that robust overall financial performance is not a priority. They are not reaching their full potential as business-oriented enterprises.
His report, Finding Jewels Among the Crowns: Optimal Governance Principles for Canada’s State-Owned Enterprises, offers a governance blueprint for a more rigorous approach to improve their operations and provide even greater benefit to Canada’s taxpayers.
“Crown Corporations have enormous potential that is not being fully captured,” he writes. “Canada’s Crowns as a group are operating as break-even organizations with respect to their annual income statements, and their collective balance sheets show only modest net worth being created for their shareholders. Good governance means creating a healthy operating environment where the interests of the shareholder, the organization and ultimately taxpayers are well-aligned and promoted.”
An improved governance structure would begin with defining the central role and selection of the board of directors, chair, and CEO, and would include annual corporate plans, a borrowing, capital or funding plan, and annual audits.
