Making Privatization an Election Issue.


By John W. Warnock
October 31, 2021
Act Up in Saskatchewan

Is privatization an election issue? Well if you watch TV you can’t avoid it. NDP advertisements insist that Brad Wall and the Saskatchewan Party have a secret agenda: they will privatize our Crown corporations if they are elected. This strategy worked for Lorne Calvert and the NDP in the 2003 election. But will it work again? Brad Wall has spent several years now trying to convince the electorate that they will not privatize our state-owned enterprises. But what about the NDP? What is their record on privatization?

Building our Crown corporations
Most people who live here know that we have had strong public ownership in the area of public utilities. These Crowns were built by the people of the province when private capital would not do the job. The private corporations had no interest in expanding services to people living in rural areas or the North. Today these Crowns are very successful, efficient corporations which give us great value. That is why private capital wants to take them over.
In the period between 1971 and 1982 the NDP government under Allan Blakeney built a series of Crown corporations in the resource extraction area. The goal was to gain greater control over the development of a major economic sector and to increase returns to the people of the province. Crown corporations were built in the areas of oil, potash and uranium. Sask Power already dominated natural gas and coal development.

Grant Devine’s privatization
When Grant Devine’s Conservative government took office they began the process of privatization. They sold most of Sask Oil, the Saskatchewan Mining and Development Corporation, and the Potash Corporation of Saskatchewan. They split the natural gas division from Sask Power and proposed its privatization. They sold controlling interest in the Prince Albert Pulp Mill to Weyerhaeuser Corporation. SaskMinerals was privatized. The Tories also began contracting out government services. These were not popular moves, and in 1991 the Tories were soundly defeated by the NDP. While in opposition the NDP promised to “buy back or expropriate any Crown corporations or government assets sold by the Tories.” The NDP has been in office for sixteen years. What is their record on privatization?

(1) The oil industry. The NDP sold the remaining government shares in Sask Oil; it is now part of Nexen. They did not re-establish the Heritage Fund. The Lloydminister Heavy Oil Upgrader had been created with 75% of the capital coming from Ottawa, Alberta and Saskatchewan and only 25% from Husky Oil. A 1994 agreement gave Saskatchewan 50% of the equity in this operation, a very good deal. However, the NDP government then turned around in 1998 and sold its shares in this $1.6 billion plant for $310 million.

(2) The potash industry. The NDP government completed the privatization of the Potash Corporation of Saskatchewan. It removed the requirements that limited the extent of individual ownership and that non-Canadians could not own more than 45% of the stock. The majority of the stock is now owned by Americans.

(3) The uranium industry. Cameco was created in 1988 by a merger of Saskatchewan Mining and Development Corporation and Eldorado Nuclear. In 1996 and 2002 the NDP government sold the government’s remaining shares in the corporation. Cameco is now majority owned by U.S. investors.

(4) The coal industry. Lignite coal is mined in Saskatchewan to fuel Sask Power’s generators. Originally coal was mined by Sask Power, seemingly a natural development. The Devine government privatized this operation. The NDP government has agreed with this decision. Since 2003 the coal industry has been sending profits to the owners of Sherritt International Corporation.

(5) Natural gas. Historically natural gas was under the control of Sask Power. It acted like a private corporation exploring and developing fields, creating storage facilities, developing pipelines and acquiring future supplies in Alberta. In 1985 the Tories deregulated the market. But the privatization of the industry came in 1998 when the NDP government abolished Sask Energy’s monopoly on selling gas, allowed big corporate users to buy from private suppliers, and then mandated that Sask Energy must allow the private companies the use of the pipeline system created by the Crown corporation.

(6) Forestry. The CCF government of Tommy Douglas created Sask Forest Products which build and operated a plywood plant and saw mill. This Crown corporation was “merged” with MacMillan Bloedel in 1995, completely privatized in 1999.

(7) Investment Saskatchewan. Over the years the Saskatchewan government had acquired major interests in private corporations, the result of subsidies and joint ventures. In 2006 the NDP government transferred these assets to Victoria Park Capital Inc., a private company, to manage and privatize. These assets included the taxpayers’ investment in the Meadow Lake OSB plant, Saskferco, and Big Sky Farms.
Recently I was in the General Hospital. There is no longer any cafeteria or food service there. You can get healthy foods at Robin’s Donuts. My neighbour used to work there as a cook. How many other such privatizations have occurred over the past sixteen years?
The Sask Party may have plans for privatization. They can find out how to do it by examining the record of the NDP government.

John W. Warnock is the author of Natural Resources and Government Revenues: Recent Trends in Saskatchewan, publishing by the Canadian Centre for Policy Alternatives - Saskatchewan in June 2005.

John W. Warnock
2156 Retallack St.
Regina, SK
S4T 2K4
(306) 352-5282