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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.

On the agenda

MPs speaking

Also speaking

Claude Carrière  Associate Deputy Minister, Agriculture and Agri-Food Canada
John Connell  Associate Assistant Deputy Minister, Strategic Policy Sector, Department of Industry
Jeremy Rudin  Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
Denyse Guy  Executive Director, Canadian Co-operative Association
Marion Wrobel  Vice-President, Policy and Operations, Canadian Bankers Association
Stephen Fitzpatrick  Vice-President, Corporate Services and Chief Financial Officer, Credit Union Central of Canada
Nicholas Gazzard  Executive Director, National Office, Co-operative Housing Federation of Canada
Frank Lowery  Senior Vice-President, Senior Counsel and Secretary, The Co-operators Group
John Taylor  President, Ontario Mutual Insurance Association
Michael Barrett  Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
Bob Friesen  Farmers of North America

11 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Thank you, Mr. Chair.

If I remember correctly, your organizations, and perhaps you, presented at the pre-budget hearings. It's good to see you all again.

Mr. Wrobel, I want to give you a very quick chance to talk about the earned bonuses. What would the average salary be of the CEO of a bank? Just give me a quick number, not including bonuses, just salary. Would it be $500,000?

11 a.m.

Vice-President, Policy and Operations, Canadian Bankers Association

Marion Wrobel

In Canadian banking it's not much higher than that.

11 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Okay. Well, let's say it's $400,000. On top of that...when you get into the bonus area, you get into the area of millions.

11 a.m.

Vice-President, Policy and Operations, Canadian Bankers Association

Marion Wrobel

Compared to banks in other jurisdictions, Canadians tend to be very modestly paid. There are standards that have been pointed out by the financial stability—

11 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

I understand all that, sir. My question was fairly simple. It is in the millions when they get into the bonuses, compared to the rest of the banking community.

11 a.m.

Vice-President, Policy and Operations, Canadian Bankers Association

Marion Wrobel

Senior executives in large institutions tend to be well paid.

11 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Thank you.

We've heard this morning from witnesses, and even from government members, about the success of cooperatives.

Ms. Guy, I appreciate the recommendation in your remarks, talking about the summit in Quebec in October. Being a temporary member of this committee, filling in for Mr. Allen, who is taking advantage of me, I believe that parliamentary committees need to take full advantage of their sources and significant opportunities like this one.

One of the issues for me on some of the legislation, Bill C-38, for example, which came before the finance committee, is that we felt we didn't have the opportunity to do our due diligence, the due diligence that Canadians expect. I hope the committee will take advantage of that opportunity.

You made some recommendations in reports. In fact, both of your organizations, combined with some others, made some recommendations in the pre-budget hearings. It looks to me like the government didn't really take advantage of that advice. What's your view of that?

11 a.m.

Executive Director, Canadian Co-operative Association

Denyse Guy

Three recommendations were in the budget bill. One was a tax credit similar to what's happening in Quebec for cooperatives. The second was support for the capital fund, and the third was the renewal of the cooperative development initiative.

We know that the cooperative development initiative got cut. I may say that it was a very successful program in many ways. What I'm hearing a lot is that the large, established cooperatives don't need support. But the focus of this particular initiative was on small, emerging cooperatives. If you look at the last program, which started in November 2009 and will continue to March 2013, it was a $16 million program that created 181 co-ops. It created 1,158 new jobs, and we estimated it cost about $9,715 per job. So that's a pretty cheap way of creating employment in Canada. Certainly, in all parts of this country, that particular program was very successful.

I would say that of all of our three “asks”, not one of them has been responded to at this point.

11 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

How significant do you think the cuts that went on at CDI and then to the rural and cooperatives secretariat will be to cooperatives out there?

11 a.m.

Executive Director, Canadian Co-operative Association

Denyse Guy

The cooperative development initiative is very significant in infrastructure, not only in supporting emerging cooperatives but also in small amounts of money that went to all the francophone and anglophone provincial associations to provide staffing, in terms of expertise to be passed on, in terms of cooperative development.

So there is going to be a huge loss in infrastructure for co-op development at the grassroots. When we look at the studies, we see that one reason why there are successes in cooperative development is that there is this specialized co-op development strategy.

11:05 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

In your remarks you expressed the concern that there might have been a lack of understanding by government officials when they looked at this. Again, I would suggest that the summit would be an opportunity for people to gain a better understanding.

I'm really concerned, because when I asked previous witnesses if they were planning on making these cuts in due course, prior to the austerity measures the government started to put in to meet the goal of deficit reduction...and it's concerning because these—

11:05 a.m.

Conservative

The Chair Conservative Blake Richards

Your time has expired, Mr. Marston.

11:05 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Well, I'm concerned my time has expired.

11:05 a.m.

Voices

Oh, oh!

11:05 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Thank you.

11:05 a.m.

Conservative

The Chair Conservative Blake Richards

We'll move now to Mr. Boughen.

July 10th, 2012 / 11:05 a.m.

Conservative

Ray Boughen Conservative Palliser, SK

Thank you, Chair.

Welcome to the panel. I'll add my voice to those of other colleagues and thank you folks for appearing today on a warm, summery, blue sky, “I'd rather sit there than be in here” kind of environment. But we're glad you're here.

We've heard what's happened with your various operations and your institutions. My question to each of you is, what do you see in the future? We see economic upheaval. We look across the planet and we know we don't live on an island—what happens in Spain and in other parts of our planet affects all of us in one way or another. How do you look at that in terms of what's going to happen, probably—and maybe not, but certainly a change will occur in the financial institutions you represent. How will they deal with these changes on the horizon?

11:05 a.m.

Vice-President, Policy and Operations, Canadian Bankers Association

Marion Wrobel

One thing we saw coming out of the global financial crisis was that the Canadian banking system is very resilient. We asked ourselves what the reasons are for that.

We think that in Canada we have a combination of things. We have good policy, generally, with respect to banking. That's come in place over a number of years. We have good, prudent management and practices. We have institutions that are well capitalized. We have a pretty good regulatory regime, and the advantage here is that we have a single bank regulator, and that's important. We have strong supervision. I think with all of that combined we saw the strength of the Canadian banking system.

Now going forward, because there's this concern that we don't want this to happen again, we see this huge regulatory onslaught. We have a number of new initiatives put in place since 2008–09. In magnitude, they are strong and they are coming in at a rapid pace. I think it's important to look at all of that and try to make sure that new regulatory initiatives actually achieve what they are meant to and they don't have negative and unintended consequences.

My colleague, Mr. Fitzpatrick, talked about compliance and the burden of compliance on small institutions. The Government of Canada wants to enhance competition in financial services. It wants to attract new entry, and often the entry of small institutions. We have to ask ourselves whether all these new regulatory initiatives are making it more difficult for new entrants to come into the market.

So we have to balance off that safety and soundness, which we should never ignore, as it's a really important part, but make sure we have a competitive financial system.

11:05 a.m.

Vice-President, Corporate Services and Chief Financial Officer, Credit Union Central of Canada

Stephen Fitzpatrick

I'll answer second, then, and continue the flow.

We would agree with some of the comments Mr. Wrobel has made on the regulatory burden. We think of it more in terms of things such as FINTRAC, for example, to which there are millions of filings every year. In 2010 there were more than 20 million filings. Only 500 of them were actually followed up on for action, and we don't know whether any of them materialized into anything.

Things such as that you have to question. We don't question the purpose; we question the effectiveness of that kind of approach, especially when.... I could use the example of Surrey Credit Union in Prince Edward Island. It has 10 or 12 employees and has the same requirement as VanCity in Vancouver or the Royal Bank of Canada when meeting those FINTRAC requirements. This has a disproportionate effect on the administrative costs in that credit union. As far as the burden we work under is concerned, that would be the challenge we face.

Perhaps this is an answer to an earlier question as well. We embrace the rules that are coming in concerning enforcing the safety and soundness of financial institutions in Canada. Mr. Wrobel is right that the Canadian banks did quite well and the Canadian credit unions did very well also. There were no failures as a result of the economic crisis in Canada. That speaks to both the regulators and the organizations that were regulated and the way we operated.

11:10 a.m.

Conservative

The Chair Conservative Blake Richards

Thank you. The time has expired on that round.

Madame Brosseau, you have the next round.

11:10 a.m.

NDP

Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC

Thank you very much.

I think we all can agree that co-ops really help people: they lift people out of poverty; they promote gender equality. I haven't heard a bad thing about co-ops, so I don't really understand why we're cutting funding to them.

Has the Canadian Co-operative Association had a meeting with the Minister of Agriculture concerning the three recommendations that remain?

11:10 a.m.

Executive Director, Canadian Co-operative Association

Denyse Guy

Do you mean with Mr. Ritz? No, we have yet to have that meeting.

11:10 a.m.

NDP

Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC

Were efforts made to...? I guess efforts were made.

11:10 a.m.

Executive Director, Canadian Co-operative Association

Denyse Guy

Certainly efforts were made.

11:10 a.m.

NDP

Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC

Nobody from the office...?