Chapter 2
The nature of government

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In Canada, the national government is a sovereign government empowered to create the administrations and organizations necessary to conduct the affairs of State.

Government is comprised of

• those bodies declared as governments in Constitution Acts from 1867 to 1982, specifically, the federal and provincial governments

• those bodies established by constitutional governments which are declared as governments or which function as such, specifically, territorial and municipal governments, local school authorities and other special purpose bodies

• entities controlled by any of the foregoing.

These organizations may be categorized into two distinct groups: sovereign and non-sovereign entities.

2.1 Sovereign entities

The sovereign entities group contains the federal, provincial, territorial, and local governments.  Sovereign governments create Crown and non-Crown corporations to serve the public, "Crown" referring to Her Majesty in right of Canada. Crown corporations are legally distinct sovereign entities that are wholly owned by a government, managed by a board of directors, and operate autonomously. The enabling legislation for each parent Crown Corporation decrees its status, mandate, powers and operational accountability. Crown corporations may deliver non-profit services that are characteristic of government organizations but more often, they are profit-oriented, competing in the market place with other providers of similar goods and services.

2.2 Non-sovereign entities

Sovereign governments also create non-sovereign entities to carry out government policy and provide services that benefit the general public. These non-profit entities are created under specific government legislation that describes their status, purpose, and operational accountability. They are not legally constituted under federal or provincial business corporation acts. The non-sovereign entities group contains these types of entities:

• non-autonomous funds and organizations that operate within government ministries, departments, and administrations

• other autonomous funds and organizations that operate independently to provide goods and/or services to the public such as national museums, transportation safety organizations, public housing authorities, and workers' compensation boards

• non-profit public institutions that are controlled by sovereign governments. They provide direct services to individuals whereas other government entities provide services that collectively benefit all constituents. The non-profit public institutions group contains entities such as public universities, colleges, hospitals, and residential care facilities.

As an alternative to creating publicly funded organizations, governments enter into partnerships with privately owned organizations to deliver services to society. Public-private partnerships are an example of this type of arrangement whereby a government contracts with a privately owned organization to provide the means to realize large scale projects such as roads, bridges, utilities or communication networks.  (See Appendix A for more information about public-private partnerships.)