University of Calgary

University of Calgary

February 02, 2012 11:15 ET

University of Calgary: The case for more privatization in Canada

The School of Public Policy releases two papers that prove the benefits of privatization

CALGARY, ALBERTA--(Marketwire - Feb. 2, 2012) - The School of Public Policy today released two papers that contain intensive and deep reviews of the history, costs and benefits of the privatization of government owned corporations.

One paper, authored by John Nellis, examines privatization from an international perspective; the other, authored by Anthony Boardman and Aidan Vining, takes a strictly Canadian perspective. Both arrive at a common conclusion: the overall impacts of privatization have been largely positive.

Boardman and Vining look at examples of Canadian firms that have been privatized and quantify the impacts on those firms' operating performance. They conclude "that the privatization of entities operating in competitive markets has been social welfare-improving. Indeed, our major policy conclusion is that this kind of privatization is a no-brainer."

Nellis targets international privatization and also identifies net economic benefits. "Privatization increases efficiency, rewards the new owners, generally improves the fiscal position of the selling government and increases societal net resources." The author does concede that privatization is a "tough political sell" because of potential job losses associated with the acquired firm looking to increase efficiency and fears over price increases.

There are numerous ripe potential targets for privatization in Canada. Federally, these include the CBC, Canada Post and ViaRail. In Ontario the LCBO, Ontario Power Generation and Hydro One stand out. The list in Saskatchewan is the longest of any province, including SaskTel, SaskEnergy and SaskPower. Even Alberta holds potential for privatization with examples like Alberta Treasury Branches, Enmax, and Epcor.

The study can be found online at www.policyschool.ucalgary.ca.publications.

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