Evidence of meeting #3 for Special Committee on Cooperatives in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cooperatives.
A recording is available from Parliament.
3:15 p.m.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
I often hear the complaint from dairy farmers that they're not allowed to market dairy products themselves. Is membership limited to its current level within Gay Lea?
3:15 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
No, Gay Lea is unique, in the sense that we're one of the few dairy cooperatives in Canada that still has open membership, and our membership continues to grow. There is a financial investment you have to make in Gay Lea's cooperative, but our membership is still open and is still growing.
3:15 p.m.
Conservative
3:15 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
It will depend on how much milk you produce, but it is three shares, which is $51 per hectolitre. For an average farm with 600,000 litres, it is about $30,000 you have to invest. To put that in context, though, the profits we share back with you over a five-year period pay for half of that. So you usually only have to put in about $15,000 of your own money.
3:20 p.m.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Often what we're hearing, especially now, is that the older dairy farmers can't find somebody to buy the farm from them, so to speak, if they don't have a son or daughter successor. Then the young ones who have never lived in a dairy family and who want to buy quota find it totally unachievable. Is there any benefit to being a part of the Gay Lea co-op in terms of succession and finding somebody to take over the farm?
3:20 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
In a word, no. We provide training for our farmers as they develop succession plans, but it's primarily from father to daughter or from father to son or from grandfather to granddaughter. We provide training for that. But the DFO, the Dairy Farmers of Ontario, regulates how milk quota is transferred between farm and farm.
I've never heard of an issue in Ontario of individuals having difficulty selling the farm, because quota is a hot commodity, and quota, at least in the present system, will always be able to be sold. The issue becomes the affordability of that quota for the next generation and whether they can cashflow it.
3:20 p.m.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Right. And we have that farm credit for young farmers loan program. That should help. Nevertheless, the barn, the equipment, and the real estate are very substantial.
3:20 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
DFO does have a program they've implemented that's a young farmers program.
3:20 p.m.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Very good.
Will your membership benefit from the various foreign markets we've been opening up and will continue to open up over time?
3:20 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
Oh boy, that's a whole discussion on the whole supply management system. Based upon the current pricing models for domestic milk prices, it's not going to benefit dairy cooperatives in Canada at this point, because there aren't a lot of markets being opened up for dairy exports.
3:20 p.m.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
So are all of your products, then, sold within Canada?
3:20 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
Certainly 99 and 44/100ths per cent is sold within Canada, yes.
3:20 p.m.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
I've noticed on the list of products here that you don't have yoghurt. All these years I've seen Gay Lea on the grocery store shelves, but I didn't realize that you were a cooperative. You don't have yoghurt. I'm asking how difficult it is to diversify. What are the obstacles?
3:20 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
Well, we are actually a major yogourt producer today, but we co-pack it. The phenomenon of Greek yogourt—and it's public knowledge that Greek yogourt made by Danone is all made at my plant in Toronto. We invested considerable dollars of our members' money in order to diversify. We are not averse to risk. Certainly we love the phenomenon, and we're working seven days a week in order to produce it.
3:20 p.m.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
So it's just access to capital, then, that is the limiting factor to diversification.
3:20 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
Right. That capital came directly from our members.
3:20 p.m.
Conservative
The Chair Conservative Blake Richards
Sorry, Ms. Gallant, the time has expired.
I now move to Mr. Harris.
3:20 p.m.
Conservative
The Chair Conservative Blake Richards
I had Mr. Harris on the list, but it will be Mr. Marston, then.
3:20 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
He's getting the last word, though.
Mr. Barrett and Mr. Friesen, I think we're going to agree on one thing: we're all pleased to hear how many MPs around this table support cooperatives. The commentary I've heard today—and it's been noted that sometimes we don't agree on things, but this seems to be one on which we're doing a pretty good job, at least on support for them.
I'm impressed with the travels you referred to, in which you were looking at best practices. I'm not going to beat this horse too badly, but to my mind that's precisely the reason this committee should attend the Quebec conference. I'll leave it there, because we have touched on it.
I see a thread running through the report you gave us, as well as in the testimony of other witnesses we heard today. It seems to be that even though there are, as we note, well over 100,000 people employed and 100,000 directors of cooperatives, Canadians know very little about them. I knew a little bit, because in my previous life at a labour council we had an organization called Labourhood, which was in non-profit housing a little bit.
I'm really interested in your views. Ms. Gallant started talking about it. In light of the push for free trade agreements with Europe—and now we have this Pacific thing happening—what do you think the implications are for supply management?
3:20 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
I believe that certainly with regard to supply management, put into a global perspective, there are a number of nations that see the opportunity to access Canadian markets for freer trade as a very important thing. Although we have 34 million to 35 million people, a lot of other nations look to the Canadian dairy price as liquid gold, as that opportunity.
What it does present us with, I think, depending on where the discussion goes, is that there will likely have to be a change to the current system. I'm an optimist. I also believe there can be compromise between the need to have freer trade globally and access to foreign markets and to ensure a livelihood for our rural communities. I'm an optimist who believes that in sitting down around a table like this, there can be compromises and a very successful solution.
3:20 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
I sure hope you're correct. Putting it in context, I come from Hamilton, with steel. Our plants there produce five million tonnes of steel a year, and the big ones are producing 110 million tonnes of steel. We've watched the near decimation of one plant in Hamilton as a result of that.
Again, in the context of the cooperative development initiative and of what I refer to as dramatic cuts to the rural cooperatives secretariat, we're very concerned about the impacts those have going forward. To put it in context, if we have an EU trade agreement, would we not need support like this all that much more in Canada in light of that?
3:25 p.m.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
I believe there's certainly very much a need within Canada for the development of cooperatives to fill the needs within communities. Health care was mentioned, but I also see it, for example, in funeral cooperatives. I'm helping the Somalian community right now to develop a funeral cooperative, because there is no business that truly serves them. That need is going to be there. Where are you going to get the resources from? Where are you going to get the ability and the expertise to do that? A governance model is important. That level of support is critical, or we're going to miss the opportunity to have communities be able to solve their problems.
3:25 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
I think you've hit on something very important.
Cooperatives started in the west. We all understand that. It was farmers who were in exactly the position that you're describing with the Somalian community, who had a need that the banks of the day, or other aspects of community investment, wouldn't address. I think it's critically important that we sustain this.
Do I have time left, Mr. Chair?
