It has become part of Saskatchewan's folklore - no other jurisdiction in the country relies on government and Crown corporations as much as we do here in the 'land of the living skies'.

According to a recent study of Saskatchewan's economy by the Fraser Institute, this myth is actually reality: Crown corporations represent 11.7% of our economy, head and shoulders above every other province. The next closest province is New Brunswick, where Crowns represented 8.6% of the economy. Alberta and Ontario are in eighth and ninth place, while our sister province of Manitoba ranked fourth with 7.7% of its economy represented by Crown companies.

The main economic argument used to justify the existence of Crown corporations is what often referred to as 'market failure'. In other words, the government uses Crown companies to deal with the problem of the 'natural monopoly' in the markets for utility services - such as telephone, power, or natural gas distribution. The historic failure of the private sector to provide service to remote or sparsely populated areas is corrected by government enterprises. Or so the argument goes.

Certainly these points are still put forward by the defenders of ongoing state ownership and control of SaskPower or SaskTel (although thanks to technological advances, competition, and freer markets, these positions hold a lot less water today than 20 years ago).

But 'market failure' is not the main rationale used to justify government ownership of business in Saskatchewan. Instead, the need for so-called 'industrial development' is the battle cry. This mentality has led our provincial government to gather up hundreds of million in taxpayer-funded investments, primarily through the Crown Investment Corporation (CIC). The list includes everything from organic food companies to meat packing plants, film companies, pig farms, and pulp mills.

Considering the overwhelming evidence that (1) government enterprises tend to be less efficient, responsive and undercapitalized compared to their private sector counterparts and (2) direct government investments in private business often distorts capital markets, represents huge opportunity costs, and keep taxes higher than they would otherwise be, the level of government and Crown activity is surprising.

Unfortunately, too often our reliance on all things government results in the 'crowding out' of productive, job-creating private sector business and investment. For instance, from 1982 to 2000 Saskatchewan managed to accumulate just $10,635 in real per capita business investment. Compare this with Alberta where the new business investment per capita was $34,823 over the same period of time while the entire country's figure was $27,163.

Saskatchewan has not performed well in terms of job creation over the past 20 years either. Between 1981 and 2000, total employment in our province grew by 12.5%, compared to Alberta's 34.3%, Manitoba's 18.1%, and entire country by an average of 32%. Another way to see the results of excess government and more Crowns is to simply look at the number of corporate head offices: 197 in Toronto, 40 in Vancouver, 52 in Calgary, and a combined total of 12 in Regina and Saskatoon (many of which are actually Crown corporations)

Saskatchewan would benefit greatly from a more private sector players. But first, government must clear the field. Government as referee - yes. Government as player, coach, general manager, and owner - no way, or it may be game over.