Should Sasktel Be Privatize?
Essay title: Should Sasktel Be Privatize?
ESSAY II
OUTLINE
INTRODUCTION
RATIONALE FOR CREATING SASKTEL AND CROWN CORPORATIONS
ADVANTAGES AND DISADVANTAGES OF PRIVATIZING SASKTEL
CONCLUSION
Should SaskTel be privatized? (literature on public ownership, privatization, theories on the role of government)
Saskatchewan Telecommunications or SaskTel is a provincial Crown Corporation operating under the authority of The Saskatchewan Telecommunications Act. It is the leading full service communications company in Saskatchewan, providing local, long distance, voice, data, Internet, web-hosting, text and messaging services over a fiber optic-based, fully digital network (
Before making decision about privatizing SaskTel or not, we need to look at the original reasons behind the creation of this Crown corporation. We need to answer certain questions like, does SaskTel still function as it is intended to be and does it meet its original objectives today. Saskatchewan’s earliest Crown corporations were established before the province was incorporated in 1905. They were founded to provide reliable, high-quality services to all Saskatchewan people, at affordable costs. Over the years, the role has expanded. The Crowns now promote economic development and make a significant contribution to the province’s finances. Since 1995, the crown sector has paid more than $1.8 billion in dividends to the province’s General Revenue fund. When Manitoba telephone systems were privatized in 1996, it left SaskTel as the last government owned phone company in Canada. At one time in the prairies, governments and telephone companies were practically inseparable. It was seen as natural monopolies (one producer supplying all of the market at lower costs than many producers could) because of the huge cost of installing a wired network, telephone markets were the exclusive domain of crown corporations, whose job was to make phone service affordable especially for rural customers. Over the past eight years, both Alberta and Manitoba governments have sold their phone companies, arguing that private companies are better able to cope in an industry that has rapidly evolved from monopoly to competitive background. In the 1980s, the Mulroney government moves the issue of privatization to the fore, appointing a Minister of State of privatization to oversee the sale of de Havilland Aircraft and Canadair, and to explore the sale of numerous other public sector firms.
There is little doubt that the role of Crown corporations in Canada remains a subject of some controversy. In Saskatchewan, people’s attitude towards privatization varies.