Hi. My name is Mark Goldblatt, and I am the president of the Canadian Worker Cooperative Federation.
I am going to divide my short remarks into three areas--what a worker co-op is, how the model can be applied in enterprise situations, and then our specific budget requests.
First, what are worker co-ops? Quite specifically, they are employee-owned businesses that are structured on a cooperative basis, on the basis of one member, one vote. Every employee of the cooperative is a member. Worker co-ops may have the same structure and division of labour as similar privately owned corporations; the difference is that they bring efficiencies and productivity gains because people are basically working for themselves.
In terms of areas where this worker co-op model can be applied, I think there are basically three. The first area is small business start-ups. As an example, here in Ottawa we have a worker co-op called La Siembra Co-operative, which imports and distributes fair trade products like cocoa sourced from cooperatives of small farmers in the developing world. That's a start-up worker cooperative, and in that case growing very rapidly.
The second area in which we have successfully applied the worker co-op model is when you have a small or medium-sized business and the owner is retiring. Statistics Canada is reporting that thousands of small businesses—I don't have the exact numbers—are facing a situation where the owner is retiring, has no children to take over the business, and is committed to trying to help retain the jobs for his employees.
One example of that model would be the Moncton Restaurant Equipment Co-operative in Moncton, New Brunswick. Mr. Gorman, the owner of the firm for many years, was retiring. He sold his business to his own employees, structured on a worker co-op basis.
There's a third example of where you'll find a lot of worker co-op applications, and that's in the area of employee buyouts of larger businesses structured as worker cooperatives. One well-known example in Canada would be the worker co-op buyout of Algoma Steel in Sault Ste. Marie quite some years ago. It saved the business and it saved the jobs until the point when there was an upturn in the steel market. That particular type of employee buyout was led by the trade union--in that specific instance, the United Steelworkers.
So there is a definite history of union-led employee buyouts structured as worker cooperatives.
In terms of our budget requests, I am going to repeat some of the remarks already made by my colleague from the CCC. They bear repeating, because these are budget requests that all the national cooperative organizations have worked out together.
As our first point, we recommend that in budget 2007 the federal government announce the creation of a federal cooperative investment plan designed to encourage investment in cooperatives. A CIP would provide a tax credit to those who invest in agricultural co-ops and in co-ops owned by employees. This would significantly assist the cooperatives in raising capital for their businesses. The resulting influx of capital would be used by cooperatives to expand employment, increase economic activity, and branch out into other value-added businesses.
As our second budget request, we're recommending that the 2007 federal budget reconsider the cuts to the social economy initiative announced by ministers Flaherty and Baird on September 25, 2006, and roll out the social economy in all parts of Canada.
My last point, also mentioned by my colleague from CCC, is that we are recommending that in the 2007 federal budget the government signal its intent to develop a new public-private partnership with the cooperative sector, designed to strengthen Canada's grassroots network of co-op enterprise and community entrepreneurs.
Essentially, we did have a five-year, $15 million co-op development initiative. There was a technical assistance component of $1 million a year. It was split up by 17 different francophone and anglophone associations across the country. The program has just been totally oversubscribed.
The other component of that co-op development initiative was to provide help for start-up cooperatives in the area of feasibility and business plan development. By the time we got to the end of the two years of the five-year program, we had already received requests for the entire amount of money.
So we're looking for a dramatic expansion of that program, based on the track record of what the additional existing program achieved.
Thank you very much.