Good afternoon, everybody, first of all, and thank you for inviting us here.
I am the executive director of the Co-operative Housing Federation of Canada, and I also serve as the vice-president of the housing group of the International Co-operative Alliance.
I'd like to talk, to begin with, about cooperative housing and the roles that cooperatives have played in housing Canadians over the past generation. Then I'd like to also make a few remarks about cooperatives generally and their role in the Canadian economy and what I think might be a reasonable and practical role for the government going forward.
You should have in your documents something called Co-operative Housing in Canada. It will have, probably in a more logical order, most of what I'm about to say and more. I'm just going to confine my remarks to a brief overview.
Almost all of the housing cooperatives in Canada have been created on a non-profit, affordable rental model. They began in the early 1970s under three government programs as a response to increasing concern that the model for housing Canadians affordably using public funds, while well-intentioned to begin with, was not serving the purpose it was intended to serve. It was creating, instead of communities, ghettos and no-go areas, and the government felt—with some persuasion from our sector and others—that it was time to look at a different model.
Cooperatives were initially used to create affordable, mixed-income communities—fairly small, not the monolithic, 100% targeted communities that are typical of public housing projects and unfortunately typical of public housing blight.
Over the years there were three major federal programs. The first one was delivered in 1973. The last one was cancelled in 1992. They delivered more than 60,000 units of cooperative housing under those three programs.
In addition, there was a significant program in Ontario that ran for 10 years, lasting from 1986 to 1995, and there have been smaller but effective programs in Quebec and British Columbia. These are unilateral programs, which have altogether delivered approximately 100,000 units of cooperative housing in this country.
By and large it has been very successful. Cooperatives are businesses, and in some cases these cooperative businesses have struggled, but by and large they've been very successful at doing two things: first, being sustainable businesses; second, housing Canadians affordably and building a sense of community, not merely within the co-ops themselves but in the communities in which those co-ops are situated. Typically, members of co-ops are not merely engaged civically in their own co-ops but are also engaged in the broader community; you'll find that many people coming from cooperative housing backgrounds have run for civic office, have held civic office, and have played very important roles of different kinds in our communities.
Unfortunately, cooperative housing right now is not well advantaged by the way governments spend money on housing. The federal government is out of the housing business. I am not back here today suggesting that it get directly back into the retailing of housing programs, but I do urge the government to continue to fund affordable housing development and to make sure that funding is sustainable and can be depended on by the provinces and territories. It is up to me and like-minded people to persuade the provinces and territories to spend some of that money on cooperative housing development, because our own members are anxious to see more.
That's essentially the model of co-op housing that has developed in this country, rather in contrast to some of the European models, which have favoured what we call the “equity” model of co-ops. I'm going to talk briefly about that. You have a one-pager that I prepared.
There is very little equity co-op housing in Canada. The job that an equity co-op model might do has been mostly done by condominiums. But there is now an increasing desire by a couple of provinces to look at equity co-ops as a way of delivering affordable home ownership programs. As probably no provinces are open to using federal transfers to develop affordable home ownership programs, they want to do that and are looking at the equity co-op model described in this piece—and I won't go into any detail with you—as a way of doing it.
We think it's a logical way to do it, because what we're looking at here is first-time home owners with no experience of home ownership. This is a way for them to work together to make sure they understand and learn the risks and responsibilities of home ownership. We are going to be working with a couple of the provinces to see how that is adaptable.
In the United Kingdom right now they are looking at what is called a “shared equity” model. House prices remain very high in large population centres in the U.K., as is the case in Vancouver, Toronto, Montreal, and Calgary, and I could keep going down the list.
The shared equity model is a way for people who can't raise enough capital through mortgages to become outright owners right away to access home ownership. Shared equity typically involves a partial ownership model, and then essentially renting the rest of your housing from a housing association with the option to increase your equity stake up to 100%.
We think that potentially has possibilities here as well, perhaps with the adaptation of what's called a multi-stakeholder co-op. It's not merely the members, in this case of a housing co-op, who are entitled to run for governance positions; it's perhaps people from the community with different kinds of skills to bring along, but always in a minority position so the actual members of the co-op who are receiving the benefits of membership are still in control.
That's what I want to say about housing cooperatives. I will say it's been a great success story. It's been a community builder. We would love to see more. We would love to see this committee recommend that there be more.
I want to turn briefly to a couple of the objectives of the committee itself. One of those is to identify the strategic role of cooperatives in our economy. You've probably heard this already today. I know CCA has been here. The fundamental difference is that we're talking about people-centred cooperations—people-centred rather than profit-centred.
I'm not here to call profit a dirty word; by no means am I doing that. If the focus is on the people who either supply or use the services, you're going to have an enormously adaptable model that helps to create jobs and sustainable growth, but in the concept of values. I think there's no better time than now for us to be looking at a corporate model that offers a values-driven alternative to some of the practices of the free market over recent years.
The subject of banks came up just before I began my remarks. I won't say that Canadian banks have been terribly bad. They haven't been terribly bad compared with the European ones. It's interesting to observe what's happened very recently in Britain with the interest-rate-fixing scandal at Barclays Bank. What's happening there is a flight of bank deposits into cooperative banking institutions.
I think more and more you're going to see people looking, not to displace the traditional free enterprise capitalist model—I think rumours of its death are being greatly exaggerated—but to finding alternative models that do focus on people and the things that matter, as I said, like jobs and like growth.
I don't expect the government to guarantee co-ops. I don't expect the government to guarantee co-op jobs. I do think there should be a level playing field for cooperatives in the Canadian economy.
That brings me to a remark I heard from Professor Watson, who was supposed to be here today but unfortunately is not. I would like to have met him. Essentially what he said was that cooperatives work and they don't need any additional or favourable support from government.
I remember Mr. Bélanger agreed with that, and I agree with Mr. Bélanger. They don't. But before we start getting into that, I think we need to determine exactly what a level playing field means.
If anybody is under the impression that there are significant breaks through the Canadian tax system and direct grant systems to private enterprises of all kinds, then we need to rethink it. I have a partial list of what is offered by way of breaks to tourism, to the auto industry—remember the bailouts—and to the oil and gas sectors.
Generally speaking, you can find—through the tax expenditure report of the Government of Canada, which the finance department released this year on January 9—the amount of money put out by way of so-called tax expenditures, essentially tax breaks that assist different parts of the economy according to what are considered to be the economic strategic interests of the country.
I'm not going to comment on whether those are real strategic interests. That's for others to decide. What I am saying, though, is that co-ops deserve a fair place at the table. If business is going to be assisted, then there's no reason that co-ops shouldn't be assisted as well. In particular I'd like to see some of the benefits provided by way of resources from Industry Canada also made available to cooperatives.
I would say this is an extremely good time for the Government of Canada to consider the creation of a centre for excellence in cooperative enterprise. It would be a remarkable and fitting legacy for the International Year of Cooperatives, 2012.
Thank you.