Evidence of meeting #3 for Special Committee on Cooperatives in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cooperatives.
A recording is available from Parliament.
NDP
Hélène LeBlanc NDP LaSalle—Émard, QC
I don't understand why there would be three Conservatives: Mr. Preston, Mr. Butt, and now Mr. Hoback.
Conservative
The Chair Conservative Blake Richards
Just to be clear, the order of questioning in the second round is based on the principle that we follow in the agriculture committee. The principle is that every member has a chance to speak. The second round of questioning concludes with two Conservatives, as there are more Conservatives than there are opposition members. Then what happens is that the third round of questioning and any subsequent rounds follow the same order as the second round. If you noticed, the second round began with a Conservative member. That's the reason.
Mr. Hoback, you have four minutes, and then Madame LeBlanc, I'll give you four as well.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair. Hopefully we have everything straightened out here.
Brother Michael—I'm going to call you brother, since you're an evangelist on cooperatives—your membership, when I buy a membership in your organization, is approximately $30,000. That's what you said. When I sell it 20 years from now, is that value $30,000? Can I get the money back if I pass away? How does that work?
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
You can get your money back. Certainly, the element of a cooperative is that the par value stays the same. If a share is worth $17, it will be worth $17 when you retire. Where your investment comes back is in your return on your dividends.
Conservative
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
Yes, there is. Some of our larger farmers would have up to half a million dollars invested in the cooperative. They have their base capital, and then their patronage stays, and then it gets paid out as well.
Conservative
Randy Hoback Conservative Prince Albert, SK
When you're talking about the assets and the security required for acquiring capital, who takes priority in the security of your assets? Does the membership take priority over the banks, or does the bank have priority?
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
Banks right now have priority, but we are actually in the process of changing the governance model and creditor-proofing to ensure that our members are not left high and dry in case something happens. We're doing it now, in the years of plenty, so that we understand the rules and obligations.
Conservative
Randy Hoback Conservative Prince Albert, SK
Right now, the way it sits, it's not a security issue. There are assets. The assets have a market value.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
Absolutely, there are assets.
Conservative
Randy Hoback Conservative Prince Albert, SK
It comes back to, then, understanding what those assets are. Is there a proper understanding in the banking sector of how the membership works, and are you leveraging that message?
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
No. We have the same financial institution. So for the last seven years, we've been educating them. I think they know a little bit better, but it also depends on organizational change and when I have to re-educate.
Conservative
Randy Hoback Conservative Prince Albert, SK
Okay, so when a new manager comes in, you have to start all over again. It's like the farm as much as anything. Bob would agree with me on that. It seems like you have to educate them about your business.
Have you used credit unions or those types of entities, the cooperative styles?
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
We have not used credit unions, because, as I said earlier, we couldn't get enough dollars. It was too large.
Conservative
Randy Hoback Conservative Prince Albert, SK
The volume was too big. All right.
We've talked about these 18 million members who belong to cooperatives. What type of role are you playing with your membership to educate them on exactly how they can go out and educate the general population on the value of cooperatives?
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
For Gay Lea, in the year 2012, if you purchase our product, we are starting to use other IYC and cooperative logos. We have a genuine, not just generous, website. We have links to our fellow cooperatives. In fact, I was talking to The Co-operators Group only two weeks ago about doing some cross-branding.
Conservative
Randy Hoback Conservative Prince Albert, SK
The co-op brand itself is out there. People understand co-op, but they might not necessarily understand what's behind what a co-op actually is.
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
I think Britain does a better job of having a singular co-op brand, and I think there is a model there for Canada to be able to follow.
Conservative
Conservative
NDP
Hélène LeBlanc NDP LaSalle—Émard, QC
Mr. Chair, I am going to share my time with Mr. Bélanger.
But first, I would like to ask Mr. Barrett a question.
Succinctly, can you tell us how cooperatives such as yours vitalize or keep rural communities dynamic all across Canada?
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
In Ontario we have two plants within what I would call metropolitan Toronto. They have been there for decades. But if you look, we have plants in Guelph, in Ivanhoe, which competes with St. Albert, and in Teeswater. I am not much of a betting man, but I would tell you that those sites, if they belonged to other organizations, would be shut down. You're only talking perhaps 100 jobs in Ivanhoe, 100 jobs in Teeswater, 110 jobs in Guelph, but those are substantial economic contributors to those communities. If you walk down Teeswater, half the stores are empty. The grocery store is one that we helped to set up as a cooperative. It is still struggling. That is an important economic contributor.
I can ship the milk to Guelph, but we are there because we are committed to rural sustainability. Our members live in that area, and we're certainly a vital part of those communities. They would be shut in a heartbeat if they were owned by somebody else.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Thank you very much, Ms. LeBlanc, for being fair. I wish the chair would have done the same. Thank you kindly.
Mr. Chair, I just want to let you know that I will be bringing up in the business section the notion that we may want to consider, as a committee, inviting to appear before us the economic development agencies of the Government of Canada, with what we have heard today, to see how they view co-ops. It might be of significance and of importance for us in our work. And I also believe that the secretariat in agriculture might be of significance, if we could get the person responsible before us. I just want to let you know I'll be bringing those up in the next round.
Mr. Barrett, is there an equivalent co-op structure for the dairy farmers in other provinces to Gay Lea Foods? Are there others in Ontario, first of all?
Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
There are other smaller cooperatives. We are by far the largest. There is Organic Meadow, etc., and St. Albert, for example. They are distant.