Crown Corporations, Legislative History of

The Crown corporations Act, S.S. 1945. c. 17 was introduced in 1945 by the Douglas government. Although the province had government corporations operating prior to 1945, this Act was the first piece of legislation that aimed to define the powers and governance structure of provincial Crown Corporations. It empowered the provincial government to appoint Crown corporations “to operate any designated industrial or commercial enterprise, or undertaking, the operation of which, on behalf of the province is deemed advisable for the public good” (s. 2). It also enabled members of Cabinet to purchase controlling interests in publicly traded corporations and transfer those interests to be administered by a Crown corporation (s. 10).

The 1945 Act gave Crown corporations the power to run their business ventures (s. 3), including purchasing and disposing of land with the consent of the government (s. 3), expropriating land (s. 8), borrowing money (s. 14 and 15), and acquiring insurance (s.17). Accountability of the corporations was achieved through making them responsible to a Minister of the government (s. 12), requiring government approval for certain land and financial transactions (s. 3, s. 15) and submitting annual reports (s. 19).

The 1945 Act was repealed two year after its enactment, and replaced by the Crown Corporations Act, S.S. 1947, c. 13. The 1945 Act had been deficient in only providing for the formation of Crown corporations to serve industrial and commercial purposes. The 1947 Act expanded this scope, allowing for the establishment of financial and public works Crown corporations (s. 2). This amendment allowed for the establishment of the Government Finance Office (GFO) on April 2, 1947 (Order-in-Council 535/47) - the precursor to our present day Crown Investments Corporation (CIC).

The GFO became responsible to the Provincial Treasurer (s. 21) for the financial operations of all government departments, offices and Crown corporations. The GFO actively supervised Crown corporations by establishing financial rules and regulations for the business of the Crowns, giving advice to the directors of the Crown corporations, and having access to their books (s. 22). The 1947 Act also established the Industrial Development Fund (IDF), enabling the government to borrow money for industrial development projects and allowing the funds to be controlled by the GFO (ss. 30-33). In 1950, (c. 11) amendments to the 1947 Act further enabled the GFO to acquire controlling interest in publicly trade corporations in Saskatchewan, which ability was previously reserved only to Crown corporations (ss. 3).

In the 1950s and 1960s various other significant amendments to the 1947 Act were introduced, including retroactively subjecting Crown corporations to tort liability (1951, c. 11, s. 2), repealing the ability of Crown corporations to expropriate property without consent (1957, c. 13, s. 1), dispensing with Cabinet approval for acquisition of property over $5,000 (1958, c. 86, s.2), and enabling Crown corporations to form pensions for employees (s. 1964, c. 59, s. 1). In 1966, all property invested in the GFO was transferred to the Saskatchewan Economic Development Corporation (SEDCO), and Part III of the 1947 Act was repealed (1966, c. 5, ss. 1 & 3). In 1973-74, the governance structure of the GFO was significantly changed: it was no longer responsible to the Provincial Treasurer, but required to report to the Minister of Finance (1973-74, c. 18).

The 1947 Act was repealed in 1978, and the Crown Corporations Act, R.S.S.1978 (supp.) c. C-50.1 was enacted. The governance structure of the Crown Boards was clarified, setting out the ability of Cabinet to appoint Board members (s. 6) and granting to the Boards the ability to appoint advisory and executive committees for more effective governance of the Crown corporations (s. 7). The GFO was continued under a new name, Crown Investment Corporation of Saskatchewan (CIC) (s. 23), with the Minister of Finance designated as the minister responsible for CIC. Vested in CIC was also the authority to regulate audits of the financial transaction of the Crowns (s. 19). In 1980-81, amendments to the 1978 Act provided for the payment of dividends to the Saskatchewan Heritage Fund (c. 48, s.7) - although this provision was subsequently repealed with the repeal of the Heritage Fund (Sask) Act in 1992 (c. 53). It further provided for CIC to be subject to an audit by the Provincial Auditor or other audit firm appointed by Cabinet (s. 8).

In 1992, the Crown Employments Contracts Act (c. C-50.11) was enacted, deeming all Crown employment contracts public documents (s. 4) and requiring the filing of employment contracts by senior Crown executives, with the Clerk of Executive Council (s. 5). It further voided all Crown employment contracts that provided for payments of benefits and compensation upon termination or expiration of the contract, and prohibited any rights of action against the government for violating such contracts (s. 6). In 1993, the Crown Corporations Act, 1993, S.S. c. C-50.101, the current governing legislation, was introduced. It created a new classification for all Crown corporations by dividing the Crowns into CIC, CIC Crown Corporations, or Treasury Board Crown Corporations (s. 11). CIC is designated as the holding company for all subsidiary Crown corporations, and is responsible for making and administering the investments authorized by the Act on behalf of the government (s. 5). CIC Crown Corporations are subject to the orders and directives of CIC, while Treasury Board Crown Corporations are subject to the orders and directives of the Treasury Board (s. 14). The governance structure also changed on the Crown Boards. The Cabinet was required to appoint the Minister responsible for CIC as Chair of the CIC Board, and other members of Executive Council responsible for the subsidiary Crown Corporations were required to be Chairs of the Boards of Directors for each respective Crown. (s. 23). The 1993 Act further articulates the duties of care and good faith expected by directors of Crown corporations, and provides a statutory indemnity from liability if those duties are met (s. 46).

Since 1998, a significant amendment to the Board of Directors structure of Crown Corporations Boards has operated to depoliticize the governance structure of the Crown corporations by eliminating the requirement for the Minister responsible to be a Director and Chair of the Board and by opting for these positions to be filled by appointment of the Minister (1998, c. 20, s. 23). An amendment in 2000 has further removed the responsibility of CIC to report to Cabinet on matters of budgets and programs of the subsidiary Crown corporations, but has confirmed responsibility for reporting on the goals, revenues, expenses, expenditures, investments and operating results of subsidiaries (2000, c. 39, s. 5(2)).

Heather Heavin

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