The government of Saskatchewan has used a variety of corporate structures to attempt to stimulate the growth of small business in the province through direct investment or financing. The Saskatchewan Economic Development Corporation (SEDCO) was established as a Saskatchewan Crown Corporation in 1963. Its purpose was to foster economic development in Saskatchewan primarily through commercial loans to provincial companies. From an asset base of $10 million in 1966, SEDCO grew to an asset base of over $250 million at its peak in 1990. In addition to lending money through mortgages and other secured debt instruments, at various times SEDCO provided equity investments in businesses, constructed industrial parks and buildings for companies, provided business advice to its clients, and developed the first science park in Saskatchewan, Innovation Place.

SEDCO began suffering substantial losses in the early 1980s as a result of the failures of businesses it had provided with financing. In 1982 the Conservative Party formed government after over a decade of New Democratic governments. SEDCO had suffered some high-profile business failures in advance of the 1982 election, and the new government was much more conservative in its approach to making annual expense reserves in anticipation of future failures. The losses resulting from these reserves immediately eroded the retained earnings built up over the nearly two decades of SEDCO’s existence. Losses continued throughout the 1980s, resulting in an ever increasing deficit in retained earnings; the election of the New Democratic Party in 1991 did nothing to reverse the trend. In the eyes of the government, these losses created a low level of confidence from the general public in the competence of SEDCO, and during 1994 it was announced that it was to cease operations; it did so in 1995, and all the assets of the company were transferred to its parent company, Crown Investments Corporation (CIC).

The Saskatchewan Opportunities Corporation (SOCO) was created in 1994 to provide a new investment option for small businesses within targeted industrial sectors, while also reacting to public concerns over the performance of SEDCO. SOCO was established with a much more restricted mandate than SEDCO, the focus being equity investment rather than mortgage financing. The size of transactions was to be generally limited to under $3 million, and retail business was excluded from SOCO’s investment policy. The six strategic sectors identified were agriculture, forestry, tourism (cultural industries), mining, energy, and advanced technology. The mandate and objectives all dealt with supporting the growth of the economy through strategic investment in Saskatchewan businesses. Investment guidelines were established that stressed the importance of the viability of their clients and the need for co-investment with other financial institutions.

In August 1995 Innovation Place, the science and technology park developed by the province on University of Saskatchewan land, was transferred to SOCO from CIC. Innovation Place had been initiated by SEDCO in 1977. The transfer of this major asset dramatically increased the scope of SOCO’s operations. Innovation Place and later the development of the Regina Research Park were managed by a division of SOCO separate from the Investments Division. In 2002, as part of the provincial budget it was announced that the province’s investment activity carried on by both SOCO and CIC would be consolidated within CIC’s subsidiary, CIC Industrial Interests Inc. (CIC III). This subsidiary held the assets of investments CIC had made in private industrial projects; as a result, these investment assets of SOCO were transferred to CIC later that year. These assets, together with those of CIC III, were combined and used to form a new Crown corporation: Investment Saskatchewan. The assets and staff of Innovation Place and the Regina Research Park remained with SOCO, which has since restricted its activity to the development and management of specialized real estate owned by the government for economic development purposes—primarily Innovation Place and the Regina Research Park.

Doug Tastad