Special Committee on Cooperatives Committee on July 10th, 2012

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

You do not know or you cannot tell me?

[Claude Carrière]

I don’t know. If I knew, I could tell you.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I can tell you that, in your case, the answer is no. The people have been trying to meet for four years now, but they have still not managed to.

What about the Minister of Finance?

[Jeremy Rudin]

For the moment, at least, there are not an enormous number of cooperatives in the financial sector that are under federal jurisdiction. Having said that, the minister is interested in this, of course.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

What about the Minister of Industry?

[John Connell]

The answer is the same.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I looked at the guide published by the government that basically talks about programs accessible to cooperatives. But there were none involving the Department of Finance.

That brings me to this question: Are there any policies in your respective departments that specifically address cooperatives? If so, would it be possible to provide an example to all the committee members?

[Claude Carrière]

For the moment, there are no programs meant specifically for cooperatives. But the cooperatives have access to programs, particularly under the Canadian Agricultural Loans Act.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I understand that. But there are no policies intended specifically for cooperatives?

[Claude Carrière]

Let me continue. In fact, the cooperatives have access to a larger margin of credit than other agricultural producers.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Once again, we can say that there aren’t any policies guiding all of that.

[Claude Carrière]

Not specifically, no.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

And what about the departments of Industry and Finance?

[John Connell]

The sole exception is the Canada Cooperatives Act itself, and the legislation and framework that is there. We'll maintain that legislation but no programs per se for co-ops.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Okay.

We already know for Finance.

But according to you, Mr. Carrière, it is a competitive and profitable commercial structure. All parties and all governments combined, is it a government policy to support the sectors that are deemed to be commercially competitive and profitable in other areas, such as small business, for example? Are the programs intended for small business?

[John Connell]

Yes, there are. I think we are driven by assessments of where there are marketplace gaps. So when you say, “Do we support profitable enterprises?”, we'll carry out assessments and analyses pointing to areas where businesses may face weaknesses or there are structural gaps that prevent them from achieving their full potential. So in respect of small business policy, we find that there are financing gaps. In some cases you get entrepreneurs at early stages of their business development that can't get access to the financing they need to grow and prosper.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

So ipso facto, if indeed we do that for areas where we have identified gaps in the small business sector, would it be plausible to believe that the government would also consider doing so for co-ops where there may be gaps, such as in the initial financing or other areas?

I'm sure we'll find out through the presentations today.

[John Connell]

Yes. The sole comment I would make in response to that is that we do have programs for which co-ops are eligible. For example under the CSBF pre-program we've lent about $9 million to co-ops since 2004.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Not designed for co-ops—

[The Chair, Conservative, Blake Richards]

I'm sorry the time has expired.

We'll now move to Ms. Gallant.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

All of my questions will be through you to the witnesses.

I'd like to start at the beginning, insofar as the financial aspects of cooperatives are concerned. Would you start by comparing and contrasting banks versus credit unions and co-ops?

I hear the word “credit union” and “co-op” interchanged, so could you also briefly outline the legislation that governs each?

[Jeremy Rudin]

I'd be glad to.

A credit union or a caisse populaire is a cooperative financial institution. It is owned and governed by its members, and it provides a range of financial services.

A typical credit union provides a subset of the financial services that a large bank would, so deposit and savings accounts, loans to consumers, mortgages, personal loans. A number of them are active in commercial lending or in agricultural lending as well, but it varies. All of the existing credit unions and caisses populaires that directly serve the public are incorporated under provincial statutes and regulated by provincial bodies.

That said, as we were just discussing, two years ago we created a legislative framework for cooperative financial institutions to be established under the federal jurisdiction and to be able then to be active across the country—for example, to have branches in more than one province.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Okay.

What are the differences in the financial instruments that each has to offer? Are there certain instruments that credit unions are not allowed to provide?

[Jeremy Rudin]

Again, for existing credit unions that are governed under provincial regulation, I wouldn't be able to tell you, although there are representatives from the credit union system here, what restrictions they face. In the federal scheme, the business powers of a federal credit union will be the same as the business powers of a bank. It's the organization's structure and the governance that vary.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

With respect to safety and a person's savings, or the stability of the loan itself, what are the differences? Is an individual's money more safe in a credit union or in a bank?