You've got to hand it to the Saskatchewan government. The province has some of the highest taxes in Canada, and if that isn't bad enough, taxpayers also pay "utility taxes" to profiteering Crown corporations that dominate the Saskatchewan economy.

Three government-owned corporations -- SaskEnergy, SaskPower, and SaskTel -- produce and distribute natural gas, power and telecommunications services in the province. A recent Canadian Taxpayers Federation study by Isabel Anderson, economist and former University of Saskatchewan professor, reveals that these Crown utilities are victimizing the people of Saskatchewan and damaging the provincial economy with shameless and destructive profiteering.

The Crowns' profits far exceed what any private company, operating in a normal market with normal regulation, would enjoy. The government has made some $3.3-billion in Crown profits from the beginning of 1991 to the end of 1997 -- $2.5-billion of it in the four years from 1994 to 1997. This is income over and above the costs of producing and delivering services and repaying debt, and the government throws this excess into general revenue just like any other tax.

From 1991 to 1997, the government's profit amounted to a 48% average annual rate of return on its equity investment in the Crowns, and for each of the last four years, ending in 1997, the average rate was an incredible 64%. From 1994 to 1997, the average rate of return was 193% from SaskEnergy, 52% from SaskPower, and 57% from SaskTel.

The Crowns outperform even the super-profitable big banks. While
the Royal Bank earned a 21% average rate of return from 1991 to 1997, the Saskatchewan Crowns earned more than twice that. Here's another incredible statistic: The Royal Bank registered a profit of $1.8-billion in 1998, the largest of any company in Canadian history at the time. But if the bank had made the same average annual rate of return as SaskEnergy from 1994 to 1997, it would have earned more than $9.6-billion!

So why are the Crowns' profits so high? First, there is no competition to keep consumer prices down and spread the wealth around. The Saskatchewan government vigorously protects its monopolies. Second, there is no regulator to look after the interests of ratepayers. In other provinces with large private or public utilities, an independent body protects consumer interests while ensuring reasonable profits for the utility. But in Saskatchewan, a money-hungry government encourages the Crowns in their profiteering, while a regulatory body (the provincial cabinet) acts as an accomplice rather than a watchdog. In other words, the fox guards the henhouse, and the ratepayers get plucked.

The Crowns' earnings are equivalent to about $1,890 a year, or $158 a month, for a family of four living in the province from 1991 to 1997. In the four years ended in 1997, their earnings amount to $2,500 a year, or $208 a month, for a family of four. That's above the cost of providing taxpayers with the services.

These profits didn't only inflate the family utility bill. They were also felt in the price of the goods and services purchased from businesses also paying utility taxes. It is money sucked out of the people and the economy in one way or another.

Using the utilities to raise funds for government is not only a profitable form of taxation, it is also very regressive. High utility taxes fall most heavily on the poor. Unlike income tax, there are no brackets or basic exemptions to keep the government from taking your last dollar. If you want to stay warm and keep the lights on, you've got to pay.

But exploitation of consumers is not the only way Crown profiteering is damaging Saskatchewan. The Crown corporations control such a large portion of the economy that they actually discourage economic growth, income growth and job creation. Not only do they have too much of the pie, the pie itself is smaller because of them.

Investors are shut out of a huge portion of Saskatchewan's economy, and the rest is held hostage to services provided by Crown utilities. The Crown profits come at the expense of farmers, shopkeepers, manufacturers, and everyone else whose income or profit is reduced because of inflated utility bills and their drain on economic activity. The Crowns don't serve Saskatchewan: It serves the Crowns.

The first thing Saskatchewan needs to remedy this situation is a "Crown Utilities Review Board" -- an independent regulator that would protect ratepayers from profiteering and other monopolistic practices. As in other provinces, the independent regulator should have the authority to roll back utility bills if it finds profits are excessive.

Saskatchewan should also open the utility business to meaningful competition, and perhaps get out of the business altogether. Competition would lower consumer costs, curb excessive profits and spread the profits around. Investors and customers would benefit from increased business opportunities, job opportunities and better incomes. Saskatchewan would be free to grow instead of being a "company town" controlled by a handful of Crowns.

Defenders of the status quo might argue that the Crown corporations are the goose that laid the golden egg. But in reality, Saskatchewan's goose is being cooked by the Crown monopolies. The increased economic activity that would come with the end of monopolistic profiteering would not only improve Saskatchewan's standard of living, it would also raise the government's income from tax revenue.

Saskatchewan is poorer, not richer, because of its Crown monopolies.