Crown Corporation is an organization that is structured like a private business but is owned by the government. They generally enjoy greater freedom from direct political control than government departments.

The first crown corporation, the Board of Works, was established in 1841 to construct a canal system in the Province of Canada. Crown corporations such as CANADIAN NATIONAL RAILWAYS, Petro-Canada and several provincial hydro firms now rank among Canada's largest enterprises. They have been created by governments of all parties. The establishment of important crown corporations in the fields of transportation (Air Canada, CNR, ST LAWRENCE SEAWAY) and communications (CANADIAN BROADCASTING CORPORATION) shows to the unwillingness or inability of private firms to provide important services in a vast, sparsely populated country. Since WWII other federal crown corporations have emerged as important providers of loans and related financial services to farmers (Farm Credit Corporation), small businesses (Federal Business Development Bank) and exporters (Export Development Corporation), interests whose needs were not always met by private financial institutions. The federal government also owns and operates coal mines (Cape Breton Development Corp) and Petro-Canada, a major integrated oil and gas company. For many observers this major role for crown corporations constitutes the essence of this country's "mixed" economy and a central difference between the industrial organization of Canada and the US.

One of the prinicples of crown corporations is that the commercial activities of government must be shielded from constant government interference. Because of this, crown corporations enjoy greater freedom than government departments. As government enterprises, however, they cannot be completely independent.

In the 1980s, many Canadian governments took power with a view that it was wrong for governments to be involved in business. Those such as the federal Conservative Party led by Brian MULRONEY, set on a policy of "privatization," the selling off of crown corporations. They sold de Havilland Aircraft Co and Canadair, among others.