Let me share with you an example of one of these funds. The Arctic Co-operative Development Fund was established in 1986 to provide financial services to cooperatives across Canada's Arctic. This is a self-managed fund of pooled financial resources, owned and controlled by the cooperative businesses accessing the capital. It started with an investment of $10 million and has grown to over $45 million today, and this almost exclusively in Inuit and Dene communities across the north.
Another example is the smaller Tenacity Works worker co-op fund. This is an investment fund whose purpose is to create new, and to expand existing, worker-owned cooperatives in all regions of Canada. The fund is owned and operated by the Canadian Worker Co-op Federation. Funds are used to invest in worker co-ops across Canada.
Both of these funds received financial assistance from the federal government in the beginning, and both have been important to meet the significant needs for financing in their respective sectors. However, these funds are too small and targeted too specifically to come close to meeting all of the needs for social financing in the co-operative movement in Canada. There is an enormous potential in the co-op sector to meet a wide variety of needs facing Canadians today, such as home care; housing, especially for seniors; business succession; renewable energy, and other areas. However, additional co-op-friendly capital is needed for this potential to be realized.
So with this in mind, the cooperative sector made the decision to launch a national cooperative development fund. Financed by the cooperatives and mutual sector, the Canadian Cooperative Investment Fund is designed to help cooperatives access capital they might not find elsewhere. It will be a fund that is knowledgeable about cooperatives and mandated to structure investments appropriate to cooperative principles and the role of capital in cooperatives.
The fund is a loan fund that will provide financing consistent with the co-ops' needs to leverage other financial institutions and government programs to provide the main portion of the capital. The fund will operate in a financially responsible manner that will generate adequate levels of savings and increase member equity over time.
The goal of the fund is not to replace or replicate any of the current financing sources within the co-op sector, or accessible to it. A group of investors made up of Vancity, The Co-operators, Assiniboine Credit Union, Affinity Credit Union, Connect First, Arctic Co-operatives Limited, the Canadian Worker Co-operative Federation, and Desjardins have already pledged $20 million.
The fact that our investors are ready to accept a very low rate of return on their investment to stimulate economic development is a clear indication of its social financing impact. So here we have an example of co-ops coming together to develop a fund to promote cooperative development in Canada that is also promoting social enterprises through a social financing model. These co-ops don't need to do this. And more importantly, these co-ops are not doing this to make a profit, but rather they are doing this guided by their co-operative principles.
I'm sure that many of you around the table will think that the idea of an investment fund that is funded by the co-op sector is a good idea. You are also probably thinking, if this fund is funded by the co-op sector, why should the federal government be involved? We think that the federal government has a role to play in putting capital to work alongside this investment, that neither side should be doing this alone but, rather, partnering to encourage this sort of investment.
The two previous funds are examples of where a modest investment by the government alongside the sector's contribution has established viable, long-lasting investment funds to help the members. We see the same promise with a national fund for all co-op sectors.
This is also the advantage of using the co-op model when leveraging social financing. Co-ops are driven by their members and serve their needs. The members have an invested stake in the co-op whether it is not-for-profit or for-profit. Remember, people coming together for a common reason form co-ops. Often it is because they are looking for a particular service that is not being offered by the private or public sector. That is why co-ops are often talked about as being part of the third sector. The members of the co-op drive the agenda and drive the innovation that creates the environments for social financing. Without your members, there is no need for social financing.
ln our view, the best matrix you could ever have to evaluate the success of a co-op is the members that have become involved and believe in the services provided.
Another social financing model that is currently being used is that of the pay-for-performance contracts. A wonderful example of this sort of model is le coop de services à domicile, or home care co-op model in Quebec. This is a very successful model, and the Quebec provincial government is very pleased with the results. These co-ops offer many services to seniors and people with disabilities, such as home care, house cleaning, personal assistance, aid with medication, and so on.
ln Quebec, the government established in 1997 the financial assistance program for domestic help. The goal of this program is to support the poorest clients. For example, a person with an income of $15,000 or less per year will have the right to assistance of $13 per hour for services rendered, while a person with an income of over $40,000 per year would receive a maximum of $4 per hour for services rendered. The goal is to allow people with less income to have access to quality services.
The home care co-ops are non-profit, multi-stakeholder co-ops. The client, the partners in the community, and the employees are all members, which means they are also shareholders. This approach helps keep the costs much lower than could be provided by the public or private sector.
This particular model benefits the provincial government because it provides cost-effective services across the province, but also because it can collect taxes through jobs that are otherwise often paid under the table.
Because of the flexibility of the cooperative model and the empowerment of the members, this cooperative model has become a leader in social services in Quebec. Here we see another example of how people are coming together to meet their common economic, social, and even cultural needs through a jointly owned and democratically controlled enterprise.
ln closing, I hope and trust that the committee will see the benefits of the cooperative model when considering its report. I have been able to touch only on a few examples today, but there are so many more great stories out there. As I have already said, social financing is not a new idea. Co-ops have been doing it all along. It is in our DNA.
Thank you, Mr. Chair.