Good morning and thank you for having us.
I represent the Canadian Worker Cooperative Federation, and I want to remind you first that the UN proclaimed 2012 to be the International Year of Cooperatives. The UN accordingly recognizes the importance of cooperatives in economic development. I would also like to thank the federal government for supporting this UN initiative.
The Canada of today, especially rural Canada, owes much of its development to cooperatives. You may often hear about agricultural cooperatives, cooperative banks and credit unions, but we represent a third family of cooperatives, worker cooperatives.
First, I want to give you a brief explanation of what makes a worker cooperative, so that you can understand the difference between us and other cooperatives. Second, I would like to talk about the potential. Third—and this is especially important—I would like to talk about our focal point, the issue involving business transfer. About 200,000 companies will change hands over the next 10 years. The country will experience a shortage of business owners. In the regions, this could have disastrous results. However, the cooperative would be the ideal solution to this problem in the regions. This is a solution called for and encouraged by the European Commission in all the European countries.
I'll try to explain briefly what a worker cooperative is. Most people are not familiar with this concept. We, the cooperatives, share the same way of doing things. We are democratic businesses that operate somewhat like Parliament does: one person equals one vote.
However, the essential purpose might differ depending on the type of cooperative involved. For example, if a plant produces cedar shingles and is the property of private business owners who have invested in the company, the logic governing its management is that of maximizing profits in order to maximize dividends. That's the business logic at play. They strive to buy cedar—the raw material—as cheaply as possible, sell cedar shingles at the highest possible price and pay their employees as little as possible.
However, if this same company was the property of a forest cooperative—this could be the case in Quebec—the logic governing its management would be completely different. It would still be the same plant, with the same number of employees and the same equipment, but the logic behind its management would be to buy from wood suppliers at the highest possible price. So, they would always try to sell cedar shingles at the highest possible price and keep the payroll as low as possible.
If, on the other hand, this plant was located in Sweden or England, for instance, and was owned by a consumers' cooperative, the logic behind its management would be different yet again. The goal would be to ensure that consumers can buy cedar shingles as cheaply as possible. What all these cooperatives have in common is that workers are always losing out. In this case as well, the point is to pay the employees the lowest salaries possible and to purchase cedar wood as cheaply as possible.
This is where the worker cooperative concept comes in. Our cooperative is not a plant; we are professionals. However, if the plant were the property of workers, the logic governing its management would once again be different, as would its essential purpose. Its purpose would be to protect the workers' jobs, to provide them with the best working conditions, the best possible social benefits and the highest possible wages. To achieve this, the plant would try to buy the wood as cheaply as possible and sell cedar shingles at the highest possible price. The logic is somewhat different.
I'll now talk about the potential involved. I say and have often written that worker cooperatives can realize their full potential under modern and current economic conditions. Why is that? There are two major trends that are currently influencing the markets.
First, we, in the global north countries, have to work with salaries that are always higher than in the global south countries, the emerging countries. That's why we must always strive for high value-added products or products with high value-added intelligence. This absolutely requires very motivated workers who use all their intelligence in their work in order to succeed. This is a natural component of worker cooperatives, since they are owned by workers. They know that the profits belong to them. Consequently, it is in their best interest to remain constantly mobilized. A worker cooperative has the highest rate of potential productivity, which is especially favourable to the creation of what I call a smart business, which meets modern standards.
The second trend, which is currently not found in all regions but is in my region—I'm from Quebec City—is that we have been at full employment for years. Things are going very well, but the major issue is a manpower shortage. Tens of thousands of positions are not filled. We are experiencing genuine manpower shortages. The region is faced with the challenge of retaining and attracting workers. How does one keep and attract employees? Once again, the worker cooperative concept is very relevant, since it really enables employers to attract the most workers and retain them.
It works based on Maslow's hierarchy of needs. The basic personal needs, the psychological needs of self-fulfilment are satisfied within the worker cooperative. I could talk to you about this for a long time. I gave a 45-hour course on the topic. Regardless of that, I will stop here.
Before I yield the floor to my executive director, I will talk about the issue involving the transfer of 200,000 businesses. The Canadian Federation of Independent Business pointed out this risk almost 10 years ago. This unique phenomenon, which will manifest itself suddenly, will result in a bell-shaped curve. I am talking about business owners who will retire. It was assumed that the curve would peak around 2015, but I believe this will happen around 2017 or 2018.
There is currently a sufficient number of business successors, but within three or four years at the most, there will be a shortage. This will result in the closing of businesses. The situation will be much more serious in the regions because there will be few incentives there. The cooperative will be the only appropriate solution. The European community has understood this. The European Social Fund has been providing funding in places like France, Italy, Spain, Belgium and England for programs aimed at facilitating company takeovers and bail-outs by salaried employees.
This is basically what we suggest. The worker cooperative system could enable us to save jobs and businesses, and maintain the economic base in the regions.
I will now yield the floor to Hazel.