Evidence of meeting #7 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 credit.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Dale Ward  Corporate Secretary, Manitoba Central, Assiniboine Credit Union
Nigel Mohammed  Director, Business and Community Financial Centre, Assiniboine Credit Union
Albert Cramer  Chairman, Red Hat Co-operative Ltd.
Doyle Brandt  Red Hat Co-operative Ltd.
Peter Harty  Director, Federation of Alberta Gas Co-ops Ltd.
Kevin Crush  Manager, Communications, Federation of Alberta Gas Co-ops Ltd.
Jodie Stark  Vice-President, Legal and Corporate Affairs, Concentra Financial Services Association
Tim Archer  Executive Director, Community Health Co-operative Federation Ltd.
Patrick Lapointe  Member, Community Health Co-operative Federation Ltd.
Merv Rockel  President, Alberta Federation of Rural Electrification Associations (AFREA)
Robert Marshall  President and Chief Executive Officer, Mountain View Credit Union Limited
Dan Astner  Vice-President, Alberta Federation of Rural Electrification Associations (AFREA)
Vera Goussaert  Executive Director, Manitoba Cooperative Association
Bill Dobson  Director, United Farmers of Alberta
Hazel Corcoran  Executive Director, Canadian Worker Co-operative Federation
Peter Hough  Financial Officer, Canadian Worker Co-operative Federation
Bob Nelson  President and Chief Executive Officer, United Farmers of Alberta

9:45 a.m.

Conservative

Michelle Rempel Conservative Calgary Centre-North, AB

It would be fair to say that the Assiniboine Credit Union story, which is a great story, is one that's really a build-your-own success story. Correct? It's a made-in-Manitoba success story?

9:45 a.m.

Director, Business and Community Financial Centre, Assiniboine Credit Union

9:45 a.m.

Conservative

Michelle Rempel Conservative Calgary Centre-North, AB

Absolutely. Some of the things that we try to do as a government to encourage the further development of these build-your-own success stories is to look at things like the tax rate for small business. Were you aware that since our government has come into office, we've increased the income limit to which the small business tax rate applies from $300,000 to $500,000?

9:45 a.m.

Director, Business and Community Financial Centre, Assiniboine Credit Union

9:45 a.m.

Conservative

Michelle Rempel Conservative Calgary Centre-North, AB

Have you had any feedback on that from some of your clients, as far as that impact on their competiveness is concerned?

9:45 a.m.

Director, Business and Community Financial Centre, Assiniboine Credit Union

Nigel Mohammed

Actually, we have not. One of the things I can say is this: our standard to provide financing for small business really would be to those businesses that have a hard time getting conventional financing. So the financing that we deliver to our small business members quite often would be supported through loan guarantee programs. We have special partnerships with the province or, in the case of Western Economic Diversification formerly, to support business start-ups as well as expansion. So the individuals whom we serve through the centre of small business really are those who really have a hard time to begin with in getting financing through conventional means.

9:45 a.m.

Conservative

Michelle Rempel Conservative Calgary Centre-North, AB

On that note, were you aware that our government invested an additional $75 million in the Business Development Bank of Canada to support the formation of a late-stage venture capital fund in Canada? As well, in 2009 we invested $450 million in the Business Development Bank of Canada to support small and medium sized enterprises and firms. In fact, since 2009 our country has seen the growth of jobs by over 750,000 new jobs.

Do you think that Canada is well positioned now in terms of global competitiveness, especially for small business growth?

9:45 a.m.

Director, Business and Community Financial Centre, Assiniboine Credit Union

Nigel Mohammed

Yes, and I'd like Dale to step in here as well from a more provincial perspective. But what I can say from what we've seen in terms of financing small business, certainly the demand for small business, whether it's home-based or otherwise, has been growing, so we have been having a lot more requests for small business financing to be able to start and expand businesses.

I don't know if Dale wants to make any comments about what he has observed through Credit Union Central of Manitoba, from a Manitoba perspective. That might shed some more light on that.

9:45 a.m.

Corporate Secretary, Manitoba Central, Assiniboine Credit Union

Dale Ward

I don't know that I could connect the dots between these specific programs that you're referring to, but in terms of the Manitoba marketplace and the economy, small and medium sized enterprises are clearly a backbone piece and a real driver of our province. In Manitoba—

9:45 a.m.

Conservative

Michelle Rempel Conservative Calgary Centre-North, AB

I'm sorry to interrupt you. I just want to get one more point in before my time expires.

I wanted to ask if you were aware that Canada's small business financing program is celebrating its fiftieth anniversary as of 2011. Since 1999 we've seen loans totalling about a billion dollars each year. Do you think this program has been helpful to some of your clients?

9:45 a.m.

Conservative

The Chair Conservative Blake Richards

The time has expired, so I'll just ask that you keep your response as brief as possible. Thank you.

9:45 a.m.

Director, Business and Community Financial Centre, Assiniboine Credit Union

Nigel Mohammed

The answer is yes. We continue to use the small business financing program as one of the tools, one of those loan guarantee programs, to be able to provide access to financing. So that program certainly, I would say, has been important, together with the formerly mentioned Western Economic Diversification microloan fund. They have been important in allowing us to be able to support the financing needs of our members.

9:45 a.m.

Conservative

The Chair Conservative Blake Richards

Okay. Thank you very much. I appreciate your brevity there.

We'll now move to Monsieur Bélanger for five minutes.

9:45 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Thank you, Mr. Chairman.

Gentlemen, thank you for being here, and thanks to the panellists on the video conference.

Indeed, I've had the pleasure of meeting representatives of the gas federation and rural electrification and water, and that's a phenomenon unique to Alberta, unfortunately. It speaks to a will to make sure that the rural communities can thrive.

Technology changes, as you mentioned, and you're now having your meters read by wireless technology. I believe the same is true of the electrification, the REAs. However, no government in Canada has managed to go completely to wireless, high-speed, throughout the country. Rural communities are still waiting for that to come to them.

Is that part of the business plan of your federation to perhaps eventually offer the wireless capacity to clients in rural Alberta? I know that La Coop fédérée, which operates in four eastern provinces, is indeed interested in doing just that, and they're investing a substantial amount of money.

9:50 a.m.

Director, Federation of Alberta Gas Co-ops Ltd.

Peter Harty

No, it's not through our gas co-op federation. We looked at the possibility and put it forward to our members. The members turned it down. Then a group of our members formed a private company called Corridor Communications Inc. They are putting that wireless broadband Internet in place as a private company. But it's not part of the co-op. The idea started there. But as a co-op, it's one member, one vote. Not enough members agreed. So a minority of our membership took it upon themselves to form a company and go ahead with that incentive.

9:50 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Are they being profitable?

9:50 a.m.

Director, Federation of Alberta Gas Co-ops Ltd.

Peter Harty

They're still in the expansion stage. They have 147 300-foot towers up and they're going forward.

9:50 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

All right.

I have only five minutes, so I'm going to direct a question to the Assiniboine Credit Union.

Yesterday the matter of the section 95 co-ops came up. I'm of the view that when a business arrangement is made, only if it's beneficial to both parties should it be broken. We found out in one instance yesterday that the mortgage rate for four years outstanding was at 1.2%. In that case I would have thought that the CMHC could easily arrange for a small penalty, or even no penalty, so that the co-op could borrow more, do the repairs required, generate more economic activity by doing that, and at the same time get a higher than 1.2% return by just buying a Government of Canada bond, for instance.

Would you agree that where there's a lower mortgage rate, and basically the loan that's being repaid could be reinvested at a higher rate, that is the circumstance where, indeed, there should be flexibility?

9:50 a.m.

Director, Business and Community Financial Centre, Assiniboine Credit Union

Nigel Mohammed

Yes, I would agree with that argument for sure.

The other advantage, if I can say, in terms of the wider co-op development impact, is that many of these housing co-ops probably.... Certainly in Winnipeg the Assiniboine Credit Union has been the first choice for these co-ops to look at getting that refinancing done. More than simply being able to benefit the housing co-op by allowing it access to the financing required to do its capital improvements, it is also about being able to get that financing secured.

9:50 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

I have to stop you there. I have a question.

Did your co-op, your credit union, make use of any of the $125 billion that was made available to the financial institutions? And $67 billion of it was mostly taken up by banks. Did your co-op make use of that government assistance through CMHC?

9:50 a.m.

Director, Business and Community Financial Centre, Assiniboine Credit Union

Nigel Mohammed

I have to say that I'm not familiar with our credit union accessing or taking advantage of that. I'm not able to respond.

9:50 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Would you also have a sense of the percentage of the money that we just heard about, the $450 million being made available to small businesses in this country, that has been taken up by small business co-ops? Or have they been excluded in any instances from accessing those funds?

9:50 a.m.

Director, Business and Community Financial Centre, Assiniboine Credit Union

Nigel Mohammed

Again, I'm sorry, but I'm not familiar with the level of our access and utilization of those funds you referenced.

9:50 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Thank you.

9:50 a.m.

Conservative

The Chair Conservative Blake Richards

Thank you.

Do you have something to add there very briefly, Mr. Ward?