Special Committee on Cooperatives Committee on July 24th, 2012

[Pamela Folkins]

Under our organization, we operate within the bylaws where you have opportunity for share capital and loan capital. We've grown from $2,500 in 1975 up to $700,000, and I mean, that's members' equity. That's from profits made from doing business through their organization. They make a decision every year as to whether they wish to reinvest it or leave it with the organization and receive a small interest rate to reduce operating costs.

So it's the membership-based concept and working together to maintain their organization.

[LaVar Payne, Conservative, Medicine Hat, AB]

Just to follow up on the logging piece there, was any of that reinvested in new machinery and equipment to make things more—

[Pamela Folkins]

Those moneys are members' equity. That does not include the general reserves or anything like that. For any outside-the-box activity, you can access the general reserve moneys but it must be approved by the membership at their AGM.

[LaVar Payne, Conservative, Medicine Hat, AB]

What other kinds of things does the logging organization do to help their members besides marketing their goods?

[Pamela Folkins]

The majority is marketing, and secondly it's the management of their properties. That's the main focus.

So it's looking outside the box. It's marketing outside of the local area to survive. I mean, marketing is the main factor.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay.

Thank you.

[The Chair, Conservative, Blake Richards]

Thank you. Time has expired.

Mr. Allen, you have the floor for the next five minutes.

[Malcolm Allen, NDP, Welland, ON]

I thank you very much for including me, Mr. Chair, but actually we should go to Madame Brosseau. We haven't actually gotten to Madame Brosseau yet; we seem to have jumped by her.

[The Chair, Conservative, Blake Richards]

Okay. I had you next on our list, but if you'd like to share with....

[Malcolm Allen, NDP, Welland, ON]

It's been switched around?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Yes. Sorry, Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

It's okay. I'm used to one, two, three, four.

That's fine. We'll go this way.

[The Chair, Conservative, Blake Richards]

Are you going to take this, then?

[Malcolm Allen, NDP, Welland, ON]

Sure. I'd be happy to.

We're very cooperative on this side. We like to share.

Ms. Kelderman, earlier on you were talking about your ATM that was down there. The credit union that I've belonged to since I was about 12 actually came up with the first debit card. You could use it in ten different locations in the city of St. Catharines, primarily around the GM plant, because they were auto workers' credit unions at the time. You could actually go and use what eventually became the debit card. They actually had one of those going back some 28 years ago, or almost 30 now, I think.

When we look at cooperatives, it seems that across the country credit unions are successful, and they are fairly plentiful across the country. But if we look at Ontario, especially when we start to look at large urban areas, we see fewer co-ops beyond the financial pieces. We see it in the insurance business. We certainly see it in the credit union business. We don't necessarily see it in other businesses.

We certainly won't find any trees in Mr. Butt's Mississauga area for forestry, and you won't find them in my end, Ms. Folkins; certainly I have a woodlot, but we don't have someone like you in terms in being able to have a cooperative. I live in the Niagara Peninsula, and we don't actually have any of those.

If you take an area like the Hamilton-Niagara area, which used to be a heavy manufacturing area, do you see opportunities for co-ops? We talked this morning about industrial co-ops in other places across the world, in the Basque region in northern Italy, for instance, where there might be opportunities for cooperatives to actually do things in very urban settings, where we see private enterprise as the primary player versus co-ops, which tend to be, in certain parts of this country, more rural players. Do you see any opportunities to come into places like Niagara, where jobs have been lost in the tens of thousands, and for co-ops to play a major role beyond the credit union, mutual fund, mutual insurance piece?

[Dianne Kelderman]

The co-op model is not something that's ”up here”, beyond the residents of the community. If the residents of the community want to come together to respond to an economic challenge, to deal with an economic opportunity or a social challenge or opportunity, then the co-op model can be a perfect fit for that.

So I would say yes, the opportunities exist in every region, in every community across the country. For example, we're working heavily right now in the forestry sectors of Nova Scotia with Bowater and NewPage, two very significant issues for us right now. We are working with the communities to see if there is a community response.

Really, the co-op response is simply another name for a community response. If the residents, the constituents of a community, want to come together and be a part of the solution, are willing to invest in that, are willing to give their time, their energy, their treasure to be a part of it, then I think it can fit any and all opportunities in any region.

[Malcolm Allen, NDP, Welland, ON]

You're right. I agree, in the sense that we certainly have cooperative housing. We have the basic sorts of pieces that we see, but we don't have a history of cooperative enterprises, in the sense of actual industry jobs, etc., beyond the finance.

How will we inculcate that? How will we help communities understand that there are opportunities? All of you are here telling us about the disconnect between the government and you as enterprises, but how do citizens who have lived in a certain area, who are disconnected from co-ops, in a very...? They don't learn it in school, although Mr. Whiting was talking about a kind of JA program for co-ops, which I think is an absolutely marvellous thing.

Young folks going through school today, whether they are going to college or university or coming out of high school, don't know anything about a co-op. They don't even understand that the credit union is a co-op in a lot of ways. They don't quite connect that it's a credit union. They can get a better chequing deal than in the bank. It's not a co-op to them. It's much later in life that they maybe understand that.

How do we find a way to make the connection for communities?

[Dave Whiting]

When co-ops first got going, people didn't know anything about them. When the movement started in Antigonish with Moses Coady, people didn't know anything about it. He went out and taught them. He brought it over to the island even.

You've just got to know your history. If you want to know where you're going, look at where you've been. It can be done. It's been done. Co-ops didn't appear out of the air. People created them. Once you learn about them, then you can create them, and they can cover anything.

[The Chair, Conservative, Blake Richards]

Okay. Thank you very much. Time has expired.

We will now move to Mr. Lemieux, for five minutes.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you very much, Chair.

Thank you very much for your testimony today. I think it's been excellent.

There are a couple of points I want to touch on.

Pamela and Dianne, you both did a really good job of highlighting the success of cooperatives in your respective domains.

Dan, I think you made the comment, “That's why the government should keep funding them.” But we're in difficult economic times. The government is operating in a deficit.

I was thinking about cooperatives, and you mentioned about the decision-making, the good, strong decision-making processes they have, the good decisions they make. I'm almost convinced that if you had a strong and healthy cooperative that was operating in a deficit, they too would have to make very difficult decisions on getting themselves out of deficit. I think that's really all we're seeing here. I just wanted to make that comment.

I think what's more important than the CDI program is the fact that cooperatives communicate to Canadians the successes you were talking about, Pamela and Dave were talking about, and other witnesses have been talking about. Even though Canadians may be members of cooperatives, they don't necessarily know about the strength, the resilience, the growth of cooperatives throughout Canada, and the important role they play.

I also wanted to address one other point, and that is about government programming. I think you were talking about wanting to be treated fairly with businesses and to have that kind of respect shown to you. I want to ask a few questions about some other government benefits, to see if you benefit from them.

Pamela, you were talking about, for example, the wood industry. When we, as the government, lowered the corporate tax rate to where it is now, did co-ops benefit from that? Do your co-ops benefit from a lower corporate tax rate?

[Pamela Folkins]

In an ideal world, that should have happened. In New Brunswick, dealing with large pulp and paper companies and sawmills, I think that a lot of support for the corporates has helped them to survive. A lot have not.

The unfortunate thing is that it didn't filter down through, so—

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

It would have. If the province raised taxes or—

[Pamela Folkins]

No, no. Big business ends up being helped. For the small guy—and I'm saying we're the small guy—it didn't filter down through. So the corporates get richer—

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

It's for anyone who's not a small business. Anyone who's not a small business would pay the corporate tax rate. Anyone that's below—is it the $500,000 threshold now?—would pay the corporate tax rate. It would have to have filtered through.

The province is responsible for its own rate, but the federal corporate tax rate.... It's not just big banks; it's any business, cooperatives included. If they're above the $500,000 threshold, they're paying corporate taxes.

[Pamela Folkins]

I'm sorry. I misunderstood.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

That's okay.

I was going to ask the same question to Dianne.

In your experience with your members, would they benefit from that?