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Mint sale faces opposition

Crown corporation currently being reviewed for relevance

By: Mia Rabson

19/02/2009 1:00 AM | Comments: 2

THE CANADIAN PRESS ARCHIVES Enlarge Image

Winnipeg's Royal Canadian Mint

OTTAWA - The Royal Canadian Mint is among the government's best options for privatization, economists and business experts suggest, but the Conservatives could be in for a wild political ride if the money-making Crown corporation ends up with a for sale sign on its lawn.

The Mint, which employs more than 300 people at its Winnipeg manufacturing plant, is among the Crown enterprises currently being reviewed for its relevance as a government-owned company. The review comes as Finance Minister Jim Flaherty is hoping to glean up to $4 billion from the sale of government assets or spending cuts this year to keep the budget deficit at $34 billion.

Mike Storeshaw, Flaherty's director of communications, said the Mint is not being specifically targeted but over the next year finance officials will look at it to determine how relevant it is to the core things the government can and should be doing, and whether or not there are any changes that should be made to its structure or ownership to improve its value to taxpayers.

"The government will only proceed with transactions that realize fair value for taxpayers and make economic sense," said Storeshaw.

On the list for review this year are any enterprise Crown corporation within the departments of finance, Indian Affairs, transport and natural resources, such as Canada Post, VIA Rail and the Canadian Air Transport Security Authority.

The Mint falls within the department of transport and Don Drummond, chief economist of TD Bank Financial Group, said the Mint would be a leading candidate for privatization.

"The Royal Canadian Mint, absolutely, could be privatized," said Drummond. "In fact, much of what the Mint does right now is printing money for other countries, which has nothing really to do with Canada. But it makes money, so why not?"

The Mint, which has plants in Winnipeg and Ottawa, had a net profit of more than $21 million in 2007 and paid more than $9 million in income taxes. In addition to Minting almost two billion coins for Canada in 2007, it produced more than two billion coins and blanks for 12 countries around the globe including New Zealand, Ghana and Papua New Guinea, all at its Winnipeg plant.

The Ottawa offices house the headquarters and Mint commemorative coins and medals.

Ken Wong, a business professor at Queen's University, said privatizing an enterprise like the Mint could actually allow it to expand the memorabilia side of the business.

"As a government agency they are just charged with making currency," said Wong. "If you're going to be in memorabilia why just dip your toe in when you can immerse your whole body."

Wong said the bottom line for determining privatization should be whether or not Canadians are better off owning the asset or not. Among the factors to go into the decision would be the cost to the government of running the enterprise including the added bureaucracy and hassle to a minister, the price the government could get from the sale of the asset and the long-term impact of losing the asset as a source of annual revenue, versus the increase in taxes that would be paid if the company expands once it is privatized.

Wong noted government-owned assets are not solely focused on the business case when making decisions and are also driven by political and national interests which can mean they are less efficient.

If the government were to proceed with selling the Mint, it would not happen without a fight. Liberal MP Anita Neville said she fears for the jobs in Winnipeg and said the government would have to have a very good reason for touching the Mint.

"It definitely concerns me," she said.

NDP MP Pat Martin said it was a "national insult" to even consider selling off a heritage corporation like the Mint.

Patty Ducharme, the executive vice president for PSAC, said the union will fight against privatization tooth and nail.

The Winnipeg plant of the Royal Canadian Mint focuses on the manufacturing of coins for Canada and foreign countries. The Ottawa plant produces commemorative coins and medals and has a gold and silver refinery.

mia.rabson@freepress.mb.ca

Royal Canadian Mint in Winnipeg

Established in 1976

Number of employees: 316

2007 by the numbers:

1.9 billion - number of Canadian coins produced at the Mint in Winnipeg

2.2 billion - number of foreign currency coins produced at the Mint in Winnipeg

$289.3 million - revenue to RCM from Winnipeg plant production of Canadian and foreign coins

Canadian coins produced:

947.9 million pennies

221.4 million nickels

304.1 million dimes

386.8 million quarters

38.1 million loonies

38.9 million toonies

Republished from the Winnipeg Free Press print edition February 19, 2009 A4

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2 Comments

Posted by: Newsjunkie

February 19, 2009 at 12:40 PM

So we should give some private interests monopolistic control over the production of our money. So Canada is going to purchase its own currency from this for-profit organization that is not accountable to the public. What happens if somewhere down the road the price of supplies dramatically goes up and this company takes a loss? Well I guess they'd try to find ways to significantly cut costs. What would this mean in terms of security or the flexibility to produce what we need when we need it? Our money supply affects our economy. That's an awful lot of power for one private company. What if Canada doesn't like their services? Do we go buy our money from the US Federal Reserve instead? Gee... sounds like a bright idea to me.