The provincial government has passed Bill 40, which allows the government to sell up to 49 per cent of Crown corporations without triggering a public referendum.
It’s a goofy attempt by the government to sell a portion of the Crowns while still maintaining the controlling share. Many expect SaskTel will be the first Crown corporation to be partially sold off through this scheme.
The government says it has met with one large Canadian telecommunications company about buying into SaskTel.
Of course, it was the much-discussed potential sell-off of SaskTel that triggered this idea in the first place.
The public has told the government they want to see SaskTel remain a Crown corporation, so the government has backed off on any potential sale of the corporation. It’s likely for the best, but one has to wonder if SaskTel’s value has peaked, and how much longer it can remain competitive in the ever-changing marketplace.
Perhaps the biggest question, though, is who would want to partner with government, even one as business-friendly as the Saskatchewan Party.
On the list of potential partners the private sector wants to avoid, government would be near the top of the list. After all, there tends to be far more protocol for companies to deal with when dealing with government. There’s a big difference between thriving in the private sector and its public counterpart.
Not only would this big telecommunications company buying into a Crown have to work with the provincial government, they would have a minority stake in SaskTel or any other Crown corporation.
Who wants that headache?
Businesses enjoy success because they make great decisions. They provide a service that people want, and then supply that service in a way that allows them to make money.
On the surface, spending a billion dollars, or possibly nearly $2 billion, to have a minority stake in a government-owned telecommunications company would not be a great decision.
Maybe these companies view Saskatchewan as a market to enter, and this is the way to get around the near-monopoly enjoyed by many Saskatchewan Crowns.
Or maybe both sides are hoping that this arrangement could work, and this could be the ticket to the government getting out of telecommunications while it still can.
For the provincial government to sell off all of a Crown corporation, it needs public approval through a referendum. They wouldn’t get that support for selling SaskTel now, but they might if the buyer has been a good partner for several years.
We understand the province government is hard-up for cash at this time. The provincial budget in March hit everyone hard. Our property tax increases, our restaurant bills and many other rising expenses reflect how tough it’s been in recent years.
But does the government really believe they’re going to see any significant cash injections from selling off part of SaskTel, SaskPower, SaskEnergy or Saskatchewan General Insurance, or any other Crown corporation?
The province should decree that it wouldn’t be selling off its Crown corporations, unless it gets an offer that they, and the people of this province, would be insane to turn down.
