Between Public and Private - LCBO

Between Public and Private - LCBO - Between Public and...

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Between Public and Private – Commercialization of the Liquor Control Board Ontario Crown Corporations - Organizations that are structured by private or independent enterprises but are owned by the government - The hold the following characteristics o A majority of its ownership is vested in government o Management of its affairs must be relatively independent from government o Its primary role must be to provide goods or services to the private sector and not to the government o The prices it sets for these goods and services must reflect the costs of providing them - Crown corporations are established to carry out regulatory, advisory, administrative, or other services or to provide goods and services - Crown corporations have greater freedom from direct political control than government departments or ministries - Crown corporations were established because of the unwillingness or inability of private firms to provide important services in a vast, sparsely populate country such as Canada, and not because of the preference ownership - The major role for crown corporations exemplifies the essence of Canada’s mixed economy, and indicates the central difference between the industrial organization of Canada and that of other countries, such as the US - In most provinces, crown corporations are responsible for the generation and transmission of electricity, the retail distribution of liquor and the operations of the lottery and gaming industry - A central rationale of crown corporations is that the commercial activities of government to be performed successfully must be shielded from constant government intervention and legislative oversight - Crown corporation are tempered by some public control over policy making - 1951 Federal Financial Administration Act o Established a regime of financial control over more Crown corporations o Organized crown corporations into three types: Departmental Agency Propriety: submit capital budgets to financial ministers responsible for crown corporations, the ministry of finance and President or Chair of Management Board. The budgets need the approval of all three cabinet ministers, Cabinet, and Parliament or the provincial legislatures. Legislatures must enact crown corporation’s budgets - Legislatures also review the annual reports of crown corporations, query cabinet misters during Question Period and discuss corporate performance with Ministers and senior management in the form of legislative committees - Cabinet controls the appointments, remuneration and dismissal of crown corporations’ boards of directors and senior officers - Boards of Directors provide a key link between the government and corporate management - Effectiveness may be undermined by a lack of precise definitions of the powers, duties, and responsibilities of Boards and political patronage in the selection of members - Two events focus attention on crown corporations: o In 1970s there was a debate on Crown corporations and how they have become too prominent
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This note was uploaded on 08/10/2010 for the course LAPS 4561 taught by Professor Frankovic during the Summer '10 term at York University.

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Between Public and Private - LCBO - Between Public and...

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