The idea behind Crown corporations is sound enough. Set up within government quasi-autonomous agencies independent of direct political control, with a clear mandate to deliver a certain service or achieve a certain objective, and more freedom and flexibility than if they were fully integrated within government departments: to hire outside the civil service, to borrow on their own account, to strike contracts and own property and the rest.

The Bank of Canada is an example of how it works when it’s done right. The governor of the Bank and the finance minister negotiate an agreement every five years, setting out for all to read the broad policy objectives the Bank is to pursue, in line with the government’s overall responsibility for the economy. But how the Bank meets these objectives, or what decisions it makes day-to-day, are left to the Bank, without fear of clandestine pressure from politicians with short-term electoral imperatives on their mind.

Ideally, we’d organize every government department on similar lines, much as New Zealand did back in the 1980s – though not literally Crown corporations, they were for the most part “corporatized,” set up at arms-length from the responsible minister. The effect is to make ministers more purchasers of services than overseers. Ministers set the broad policy objectives for their departments, which form the basis of a contract with each department’s chief executive officer (yes, that’s what they’re called), establishing clear expectations of what they are to achieve, along with metrics for assessing their progress and incentives for hitting their targets.

Canada Post losses now exceed a billion dollars a year.Christinne Muschi/The Canadian Press

That, alas, is the part that is missing from many of our Crown corporations: accountability. Independence from political oversight was supposed to come with a tradeoff: strict performance expectations, and consequences when these are not met. Yet in one Crown after another, the experience has been repeated failure to deliver services to a level the public has a right to expect, failure to stay within their budget, or both. No consequences have followed.

I wrote recently about the ongoing fiasco at the Canada Pension Plan Investment Board, where over the last two decades employment has increased fifteen-fold, costs have increased fifty-fold, all in the service of an active management strategy whose stated purpose is to outperform the market averages for a comparable mix of........

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