I want to thank you very much for giving the Canadian Co-operative Association the chance to present to you today.
The 9,000 cooperatives and credit unions in Canada have over 18 million members and $376 billion in assets, and they employ over 150,000 people.
We are particularly pleased to be here this year because 2012 has been declared by the United Nations to be the International Year of Cooperatives. We want to thank the Government of Canada for its consistent support for this UN year. We will be launching the international year on November 29 at our parliamentary reception and across Canada on January 12 in 12 locations.
We are also happy to be presenting here this week because it is Co-op Week, an annual event aimed at recognizing the contribution of cooperatives. The theme of this year's Co-op Week is the same as the theme of the international year: “Cooperative Enterprises Build a Better World”.
In his Co-op Week message to CCA, Prime Minister Harper noted:
Co-operatives have helped many people and organizations find solutions to social and economic challenges in their communities, and this special week offers Canadians a chance to express their appreciation for the benefits that co-operatives provide.
Recently the cooperative model is back in the news. For example, in the U.S., in the recent health care debate, and in the U.K. around public policy, there is talk of how to use the co-op model on a wider and more effective basis.
During the recent years of economic downturn, co-ops generally did well around the world because they are community-owned, make profits that go back into communities, and have set reasonable levels of staff pay, including that for CEOs. Just two weeks ago, out of the top 100 employers featured in The Globe and Mail, three were cooperatives. In Saskatchewan, 11 of the top employers were cooperatives and mutuals.
Cooperatives generally last much longer than investor-owned businesses, as a 2008 Quebec government report and a new B.C. study have both shown. But they often need help in getting started.
This is why we are proposing three legacy budget projects for the international year. All of them are partnerships between the co-op sector and the federal government; thus, for moderate amounts of government funding or foregone taxes, substantial amounts of capital can be leveraged.
But it is not only capital that will be leveraged. One of the fundamental principles in the co-op sector is that of self-help; of communities and groups of people pulling themselves up with their own sweat equity. This is the working principle that built an oil refinery in Regina in the depths of the crisis of the 1930s, a federation of co-ops in Nunavut and the Northwest Territories in the 1960s, and more than 800 credit unions across Canada since 1900.
These three projects are backed by many prominent cooperative organizations, including the Credit Union Central of Canada, Desjardins, Co-operators General Insurance Company, and the Co-operative Housing Federation of Canada.
The first project is a federal cooperative investment plan based on Quebec's Régime d'investissement coopératif, which has existed since 1985. It would provide a federal tax credit for co-op members and employees who invest in producer—that is to say, agriculture, fishery, forestry—and employee-owned cooperatives. Such a plan at the federal level is estimated to cost between $17 million and $20 million per year and would produce $120 million per year of new investment across Canada. This is a plan that the Canadian Federation of Agriculture has consistently ranked as one of their top priorities.
The second project is a cooperative development fund, which would be co-funded by the federal government and the co-op sector, that would provide large and medium-sized capitalization loans to new and emerging cooperatives. This sector is requesting a one-time federal government contribution of $70 million, after which the fund would be self-sustaining. This federal contribution would leverage important contributions from the cooperative sector.
In 2008 the federal government commissioned PricewaterhouseCoopers to examine the model for this new fund, and they concluded that the potential impact of the fund is positive and will assist emerging and existing cooperatives to grow and expand.
These two projects were endorsed by the House of Commons finance committee in your December 2009 pre-budget report.
The third project, the last one, is a permanent and expanded federal cooperative development initiative. This is a program that provides grants and technical assistance to new and emerging cooperatives, and we hope can help also in providing solutions to business succession when new employee- and community-owned businesses can provide an alternative to the closure of family owned firms.
This program was started in 2003, renewed in 2009, and goes until March 2013. This program is managed by the two national cooperative organizations. Since 2009, 521 groups have applied for project funding, 140 projects have been funded in the last three years, and over 346 cooperatives have been created through another arm of the program. It has also helped to leverage additional resources from provincial governments and our own charitable fund.
In conclusion, I would say that cooperative enterprises can indeed help build a better Canada.
Thank you very much.