The Pros And Cons Of Privatization Of Air Canada

The key is raising efficiency and lowering the overhead cost of service not privatization. Today the Canadian government like many governments is hesitant to raise taxes or add to their already large debt burdens with new financial projects. The selling of crown corporations is an easy and viable solution to help relief some of the short-term debt. The government is continually trying to lower capital and operating costs by handing off crown corporations as they did with Air Canada. Three forces that have made privatization more common in Canada in recent years are greater foreign investment, globalization and reorganizing and managing organizations. With the lack of competitiveness in public sector markets due to these industries having a

The Canadian government spent millions of dollars bailing out Air Canada in the 2000’s until it came to the solution to privatize the airline. We first must ask ourselves why did the government feel the need to own and control Air Canada in the first place? Even before WW2 the government knew it needed a national airline as an essential part of running a country hence the emergence of Air Canada. They thought to own and control it so not to disrupt the economy with private airlines that could possibly go out of business and leave the country without an airline. This was a wise choice in the beginning but as the country progressed into the present airlines were not going anywhere. There was no need by the early 2000’s to safe guard the flying industry because of all the new an up coming global private airline. These airlines competed with each other for survival while Air Canada was funded and sometimes bailed out by the Government, this lack of competiveness lead to the down fall for Air Canada as a publically owned

The provinces own a majority number of Crown corporations, including some of Canada’s largest utilities, and could raise large amounts of revenue in the short-run. Unfortunately the government’s weak accountability framework from before 1976 of Crown Corporation’s lead to the deterioration of competiveness in organizational-centered and budged-driven organizations. It was not until Trudeau’s government of more Citizen-centered and rational centralization that the government started to control and improve on the accountability framework. In the 1990s the federal government realized “that since progamme restructuring and deficit reduction would dominate the political agenda for some time, and therefore governments in ‘thinking the unthinkable’ with the respect to deregulation and contracting out, privatization, or public-private partnerships. Currently such exploration is proceeding under the umbrella concept of alternative delivery” (page 57 lines1,2,3. The emergency of more mixed enterprises has been a common solution to increase efficiency and restructure some bureaucratic organizations. If structured properly through post bureaucratic organization methods that focus on citizen-orientated and competiveness, mixed partnerships may result in substantial savings though more productive private sector management. A perfect example of privatization gone wrong is the new