Evidence of meeting #5 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 video is available from Parliament.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Thank you.
My second question is for Ms. Gagné. We know that insurance mutuals have a long history in Quebec. In fact, Promutuel Lotbinière will soon be celebrating 160 years in business, even longer than Confederation. Could you speak to the overall financial shape of Quebec's insurance mutuals? Are they doing well? Are they sound?
Executive Director, Conseil canadien de la coopération et de la mutualité
That is a good question.
Mr. Laflamme, can you answer that?
Assistant General Manager , President, Federation of Funeral Cooperatives of Québec, Conseil canadien de la coopération et de la mutualité
Overall, Quebec's mutuals are in excellent financial health, whether we're talking about the Promutuel network, which you mentioned, La Capitale, SSQ, Mutual Management Corporation or the others. There are more than 50 of them in Quebec, and over 100 across Canada. Obviously the challenges that the life insurance sector is going through right now are making life tougher for those companies.
The Union of Canada Life Insurance mutual in Ottawa went under because it experienced some difficulties. Because of the very low interest rates, it is actually quite difficult for life insurance mutuals to maintain reserve levels. In contrast, though, homeowner's hazard insurance mutuals and farm insurance mutuals are performing extremely well. Quebec has insurance mutuals in the agricultural sector. They are in excellent financial shape.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
How much of the global insurance market belongs to Quebec mutuals? Is it 20% or 40%?
Assistant General Manager , President, Federation of Funeral Cooperatives of Québec, Conseil canadien de la coopération et de la mutualité
It's about 15%.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
I want to come back to Desjardins Group. You spoke about the size of the network. Did you say it supports 35,000 jobs in Quebec, or is it more?
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
So that means 45,000 jobs across the entire caisse network and the confederation.
Director, Government Relations, Desjardins Group
That applies to the entire consolidated group.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
I don't have a lot of time left, but could you tell me about the caisses, the federation and the confederation, just to remind me how the whole structure works?
Director, Government Relations, Desjardins Group
I will describe it briefly. Visually speaking, Desjardins Group's structure is similar to an hourglass. Members make up and own the caisses. The caisses have certain governance and decision-making instruments. Representatives ultimately elect the president of Desjardins Group. All the caisses are grouped together under a single federation.
What's more, this cooperative network owns a series of share-capital subsidiaries to serve all the other market niches and financial sectors: life insurance, property and casualty insurance, securities and trust services.
Roughly speaking, the hub of the structure is the federation, which is not your average central body in the general sense. The federation has very real powers when it comes to the Group's policies. One thing that I would say has defined Desjardins Group and contributed to its cooperative growth is that it has all these small entities operating separately and independently, while at the same time coming under a network that is overseen by the federation. And that federation has a real say in the Group's main policies. Because of that principle, the Group is able to thrive and move to another level. Oftentimes, the challenge that cooperatives have is being able to grow and move beyond a certain plateau.
Conservative
The Chair Conservative Blake Richards
Thank you.
We'll now move to Monsieur Bélanger for five minutes.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Thank you, Mr. Chair. Good morning ladies and gentlemen.
My questions are for Mr. Brun. I want to start by saying I appreciate your brief and the supporting documentation you provided.
Desjardins Group is one of the three hosts of the 2012 International Summit of Cooperatives being held in Quebec City. Is anyone allowed to attend or is it by invitation only?
Director, Government Relations, Desjardins Group
The event is supposed to be completely open. The International Summit of Cooperatives was the brainchild of the academic sector, the business world and the International Co-operative Alliance.
Liberal
Director, Government Relations, Desjardins Group
Everyone can attend. It is open to everyone.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
That's what I wanted to know.
Mr. Laflamme, I noticed that you were also the president of the Federation of Funeral Cooperatives of Québec.
Would you be able to send us some information on the federation? How many cooperatives does it represent? How many members does it have? How did it come about? It seems to be mostly based in Quebec. But I know that a cooperative has recently established itself in Ottawa, and it has 500 members. Could you provide the committee with those details?
Assistant General Manager , President, Federation of Funeral Cooperatives of Québec, Conseil canadien de la coopération et de la mutualité
Yes, it would be my pleasure.
There are 26 cooperatives in Quebec, and 15 members outside Quebec. The cooperatives have a large presence in Prince Edward Island. In fact, the province has seven funeral cooperatives. New Brunswick and Nova Scotia have some as well. As you said, one has been established in Ottawa, and it will open its doors in a few weeks.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
We could in fact access those services at some point.
Three things were mentioned briefly this morning, and none of them had come up, or barely, in previous meetings, either in witnesses' presentations or questions and answers.
The first was the study done by the Mallette firm, which showed that cooperatives were not receiving fair tax treatment under the integration principle. That is an important issue that we need to get to the bottom of, but I won't have enough time this morning, Ms. Gagné. So I am going to ask you to provide the committee members with either a copy of the study or an explanation given that it does seem rather complex.
The second issue had to do with business transfers. Because of Canada's changing demographics, the private sector has a generation-based ownership transfer crisis on its hands. The fact that the cooperative movement could provide some solutions that would otherwise not be accessible is extremely valuable. If possible, could you, or others who may be following us, provide us with some information or suggestions in that regard? I think the committee should take those under consideration.
The third, and somewhat sensitive, point was the whole issue of demutualization. I want to hear your thoughts on the matter, straightaway.
As for Mr. Adams, other committee members can ask him questions because I won't have enough time.
Assistant General Manager , President, Federation of Funeral Cooperatives of Québec, Conseil canadien de la coopération et de la mutualité
We submitted a brief on mutualization to the finance minister. We are against insurance company demutualization in Canada. And if it were to ever happen, we would want the minister to make certain that the collective wealth that has been built up over a period of more than 160 years remained within the cooperative movement.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Would you mind sending us a copy of that brief, Mr. Laflamme?
Assistant General Manager , President, Federation of Funeral Cooperatives of Québec, Conseil canadien de la coopération et de la mutualité
Not at all.
Executive Director, Conseil canadien de la coopération et de la mutualité
We will definitely send you the Mallette study this afternoon.
As for business transfers, another study was done recently. We know this is a special challenge for the cooperative movement. While it is challenging for traditional businesses, it is quite serious for the cooperative movement. We are taking a hard look at the issue with the help of researchers in the field. We can definitely send you the study this afternoon.