Thank you, Mr. Chairman.
Mr. Chairman, committee members, my name is Bryan Inglis, and I am vice-president of the agricultural division of Co-op Atlantic. I'm very pleased to be here today to represent my organization in front of the House of Commons Special Committee on Cooperatives.
This year, Co-op Atlantic celebrates its 85th year of operation. Our roots date back to 1927, a period of economic hardship when farmers needed a better and more profitable way to market their livestock. Federal and provincial agricultural fieldmen, as they were called, provided guidance and support from the beginning to lift farmers out of poverty by using the co-op model. Very early on, our founders' vision was one of an interprovincial cooperative organization that would meet the needs of both producers and consumers. Co-op Atlantic focused on understanding the needs of its members and acting proactively to find solutions.
Today Co-op Atlantic continues to partner with growers, producers, processors, and suppliers by developing reciprocal business arrangements whereby all functions of the supply chain remain local and strengthen our local economy.
Co-op Atlantic operates in five provinces in Atlantic Canada and is engaged in four business sectors: agriculture, food, energy, and social housing. Last year our sales were over $600 million, and as a combined system with retail and wholesale, we were over $2 billion. Our agricultural sector operates four feed mills, a poultry processing plant, and a commodity brokerage service for eastern and western Canadian farmers. We have 15 country farm stores, a wholesale farm supply business, and we're a member of Cooperative Research Farms, which is an international agricultural research group for feed.
The food sector, which we are very much involved in, provides procurement and marketing services to our retail member co-ops, as well as to small, independent retail business owners in Atlantic Canada. We're also a member of one of the largest food-buying groups: UGI.
Our energy sector operates 41 gas bars, 13 co-op energy stores, and bulk fuel storage and delivery operations.
Our fourth sector, which we don't talk enough about, is our housing sector. Co-op Atlantic manages 1,700 housing units, and these include housing cooperatives, non-profit housing, and housing for the elderly, the disadvantaged, and low-income families. We also provide management services for other housing groups in Atlantic Canada.
In the Atlantic Canada region, cooperative organizations number more than 750 in total, and together they provide 12,000 direct jobs. To give you a sense of the current realities of the Atlantic Canadian economy, which I'm sure you're aware of, I'd like to share the following.
Public spending reduction is a reality in all of our provinces. Federal government spending cuts will lead to employment reductions in Atlantic Canada, and this could represent as many as 2,300 jobs. The unemployment rate varies between 9.5% and 13%. More regulations will create new challenges for workers to qualify for EI.
Agriculture is facing international competition and deregulation, which will continue to put pressure on the economic viability of our farms. Young and educated workers are continually seeking opportunities outside our region. The aging population fosters the need for specialized health and housing services. Depopulation of rural communities in Atlantic Canada is taking place in favour of urban centres. Aging rural communities in Atlantic Canada are struggling to maintain essential services. Finally, urban centres are straining to meet ever-increasing infrastructure and social needs.
Due to these economic realities, we believe that cooperatives can play an important and strategic role. Given that cooperatives are enterprises that seek to meet member and community needs, which can be both economic and social, they're ideally positioned to meet the needs of both rural and urban communities. When conditions worsen, citizens look for opportunities to work together to come up with workable solutions.
Cooperatives can appropriately address the following emerging needs: employment, through the formation of worker co-ops where private businesses are pulling out or business succession and ownership transition is difficult; stability for the agricultural sector; continued provision of retail and banking services left behind by large corporations in an increasing number of communities; home care for the elderly who wish to remain in their own home as long as possible and not be a burden to the public health system; social housing solutions for the elderly, the low-income, the disadvantaged, and those with special needs; and solutions for energy generation to complement the services of major public utilities and to assist individuals in reducing their energy consumption.
Co-op Atlantic supports the Canadian Co-operative Association's recommendation to forge a new government-cooperative sector partnership. In our Atlantic region, the federal government agency responsible for creating opportunities for economic growth is ACOA. We recommend that ACOA be given an expanded role to support cooperatives.
Citizens prefer solutions that are locally owned and controlled. Co-ops are the ideal form of business enterprise for these initiatives, and as such, they deserve the same level of consideration, attention, advice, and support as conventional businesses.
We recommend that the federal government establish support for co-op business initiatives. The federal government could follow the Quebec example, where they have established a funded cooperative regional network called CDR, which provides expert advice to individuals forming and developing cooperative businesses. It also provides assistance to start-up and expanding cooperatives in order to access government and private funding.
Another example is in Newfoundland and Labrador. They provide training to economic development agency personnel in support of business initiatives emanating from cooperatives and equal status for access to funding programs. Economic development officers must come to view cooperatives as a legitimate form of business in today’s changing business environment.
Co-op Atlantic supports the Canadian Co-operative Association’s recommendations regarding access to federal funding programs. We recommend that the federal government provide the same access to capitalization programs for cooperatives as for private and shareholder cooperatives.
Some provinces have introduced legislation to provide incentives for citizens to invest in community development projects through the creation of community economic development investment funds, commonly known as CEDIFs, in some provinces. We recommend that the Canadian government look into this financial instrument to stimulate community investment.
While on the subject of capitalization, one cannot overlook the fact that during the recent market financial crisis, cooperative shares did not lose any value, since they are owned locally by the people who use their products and services and have a long-term commitment to ensuring the success of the business endeavours.
The federal government should encourage the development of a cooperative curriculum for schools and educational institutions in recognition of this valuable form of business and social enterprise.
I will conclude my presentation by reminding the committee that cooperatives have played a significant role in growing the economy of Atlantic Canada. Now is not the time to take your foot off the gas pedal. We must find ways to grow the cooperative sector to strengthen the Atlantic economy.
I would like to leave you with a reflection from Joseph Stiglitz, former chief economist for the World Bank and Nobel Prize recipient in economics. Mr. Stiglitz clearly stated that to achieve a more equitable distribution of wealth and to experience sustainable growth, nations need to find a balance between markets, government, and the social economy—that is to say, cooperatives.
I want to thank you for your attention.
I'll be very happy to answer any questions as we go along.