A Review and Assessment of Privatization in Canada

Abstract

Most privatizations in Canada occurred in the 10-year period from the mid-1980s to the mid1990s, and while many of the remaining candidates are both politically and economically problematic, the Harper government has signalled its renewed interest in more privatizations. This paper, written by two of Canada’s leading experts on the subject, comprehensively assesses hard data from the earlier privatizations in Canada, including sectors such as energy, transport and telecommunications. They find that the overall impacts have been largely positive, in many cases impressively so. Key economic indicators such as capital expenditures, dividends, tax revenues and sales per employee tended to increase, while others such as employment initially fell, only to rise again over the long term. Ultimately, most of the privatized firms continue to operate efficiently, making them positive contributors to Canadians’ social welfare through the provision of increased economic opportunities, higher profits and taxes. Drawing on lessons learned, the authors propose a common-sense framework to guide future privatizations and ensure all Canadians derive the maximum possible benefits from them. No Canadian government has ever formulated such a plan for a privatization regime, making this paper a must-read for anyone with a stake in the future of Canadian business.