Special Committee on Cooperatives Committee on July 25th, 2012

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

That's true.

I would like to mention something to Mr. Chair and the researchers. I am talking about another area we have not studied, I think, and we may not consider. I am talking about cultural cooperatives.

If you get the opportunity, you could maybe send us a few names of cultural cooperatives. If we don't have time to summon them to the committee, some of us may at least be able to meet with them. I would be happy to do that.

My last question is for the Agropur representatives. You made a worthwhile recommendation. What you said is very different from what we have heard before. I will read it to you. You said, madam, that job creation should not necessarily be an investment criterion. You said that productivity should be one of the main criteria in assessing assistance. Could you tell me more about that?

[Serge Riendeau]

May I answer.

That is constructive. This is not a criticism, but often, when we look at requests for financial assistance, be it for foreign companies that come to invest in Canada or in one of the provinces....

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Yes, yes.

Mr. Riendeau, I will read it:

[The Chair, Conservative, Blake Richards]

I'm sorry, Mr. Bélanger, the time has expired. I was allowing the witness to finish his answer there.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I just wanted to read the sentence, because it is the one that's rather crucial:

You wrote, and I quote: “Job creation should not be the main factor to be considered in connection with financial assistance, because this adversely affects Canadian companies, whether they are cooperatives or not.”

That sentence jumped out at me.

[Serge Riendeau]

Okay, the....

[The Chair, Conservative, Blake Richards]

You'll have to make sure to keep it as brief as possible, because the time has expired.

[Serge Riendeau]

I will answer quickly.

That element of the questions should be properly identified. I will try to make sure we understand each other without giving you a specific example.

Job creation is often one of the main criteria considered when it comes to providing financial assistance to attract a company to Canada. We are simply saying that the government should check whether wealth is being transferred rather than created.

Very often, in the case of companies that want to set up in Canada, we are talking about a market transfer, as opposed to real job or wealth creation.

Sometimes, that also makes companies that invest in or buy a Canadian company use rationalization. The important positions—in R & D—have already been created in other countries, and that is not necessarily taken into account in the calculations.

We must look at the big picture when the government invests, whether we are talking about a grant or assistance for a new company that wants to set up in Canada. Sometimes, it's good that new companies are coming here, but a broader picture of the situation may be needed.

That is more or less the message we want to send.

[The Chair, Conservative, Blake Richards]

Thank you very much.

We went pretty significantly over time there. I did allow it, but I just ask members to be careful, as we move on, to try to stick at least fairly closely to the time.

I will move to the second round of questioning now.

Mr. Preston, you have five minutes.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Thank you very much.

I may get back to that last bit, but I wanted to ask some other questions first.

You mentioned that in general, rural Canada or rural areas may be more impacted by cooperatives, or cooperative enterprises, than urban, but you gave some great examples of some urban enterprises, cultural enterprises, that are now working in a cooperative sense and moving forward that way too.

I come from a rural area of southern Ontario, and we really do see the value, from a cooperative point of view, replacing enterprises that may otherwise have been there and that we would no longer have. I think we saw some examples yesterday, whether it was a credit union starting up because the bank was leaving a community or those types of things. So we really do see the imperative to rural Canada, the fill-in that cooperatives bring.

You mentioned also the success rate of cooperatives—which we keep talking about and I'm quite pleased that we're repeating for those who may be watching this—including the successful start-up rate at five years or ten years, or even one or two years, versus the standard corporation or sole proprietorship or any other form of business start-up, and how much more successful cooperatives are at the benchmarks you've mentioned.

I keep asking this question, because I really want to get it in a bottle, if I can: what's making them more successful than the start-ups of regular businesses? I do some mentoring from an entrepreneurial point of view, and if we can try to capture some of this....

But I think you hit it on the head—and I'm going to give you credit here, although maybe I heard it earlier today and it didn't sink in—that cooperatives are based on a need, and then the business forms around the need, whereas an awful lot of other businessmen.... Even me, if I have an idea and I start a business based on that idea, I'm not sure there's a need. I just think I'm better, maybe, or hope that at the end of the day I'm better than the other guy who is in the same job as I am. But cooperatives start with an advantage when they are starting with a need. Something is missing, so cooperatively people get together and address that.

Would you say that's a fairly good assessment of why cooperatives are more successful? I mean, it's pretty hard to fail if you're filling a need. If there isn't a need, it may be harder.

[Francine Ferland]

Thank you for your question. I would say it could have several answers. I will look at it from a very specific standpoint.

Cooperatives are created to meet a need. The closing of a company with 25 employees in a village of 1,000 has a much greater impact on its community than the closing of a company with 500 employees in Montreal or Toronto. People will join forces to try to relaunch that company and keep its services.

An example of local services was provided this morning. I have another example for you, if you have time for it. People will use that service because they see its impact on their community.

A cooperative is a company, but it is more than just a company. It is a company that affects its surroundings and is anchored in its area. It is a catalyst of change for its community. Yes, people are going to use it.

Let's say, for instance, that people lose a service, such as the last grocery store in their village. If those people join forces to keep that service, they will certainly use it, even if they know they will pay a bit more than they would at a big store 100 km away. They know that, without the store, their municipality would lose its vitality. Cooperatives' survival rate is attributable to the fact that they are created to meet a people's need, but also to the usefulness people see in it.

In addition, it belongs to them.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

And, as a question to our friends from Agropur, the same thing happens.... I would assume that a number of years ago, Agropur started as a good thought of some dairy farmers getting together and cooperatively creating a business. You're still in that business.

Are dairy farmers still your only members? Can anybody be a member of Agropur other than someone who has a dairy farm?

[Serge Riendeau]

Currently, Agropur's only members are dairy farms.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Okay. Great.

But you've grown. You're now into—

[The Chair, Conservative, Blake Richards]

I'm sorry, your time has expired. Was it a very brief question?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

No, it wasn't. It would never be a brief question, Chair.

[Voices]

Oh, oh!

[The Chair, Conservative, Blake Richards]

Of course not. Well, then, I guess you'll have to wait until the next chance you have. But thanks for the honesty.

Madame Brosseau, you have five minutes.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Thank you for your presentations. Once again, I want to point out how useful they have been.

We know that 2012 is the International Year of Co-operatives. We know that the CDI will be abolished. It will be increasingly difficult to create and start up new cooperatives. In addition, the data from the Rural and Co-operatives Secretariat will no longer be available.

I think I have listened to your testimony carefully. You feel that new cooperatives will have a hard time and that those budget cuts will harm cooperatives or, perhaps, the creation of future cooperatives.

[Francine Ferland]

When a positive program that supports development is abolished, there are some repercussions, of course. Unfortunately, the rest of Canada will be even more penalized than Quebec. We in Quebec are lucky to have a partnership agreement with the provincial government that supports organizations like ours, the Fédération des coopératives de développement régional du Québec, which in turn support cooperative development.

When it comes to local services, people tell themselves that they will lose their last grocery store and decide to create a cooperative. However, they need support because they can't afford to pay someone to conduct a feasibility study, pay a tax expert to have a look at the programs, and so on.

CDRs, which are partially subsidized, help that group of promoters acquire specialized services and set up a legally correct cooperative, with proper rules, and so on.

The federal Co-operative Development Initiative provided tremendous support for development and served as leverage with other provincial boards and other provinces—francophone and anglophone, as it applied to both languages. Unfortunately, it appears that the initiative has not been renewed. That's sad news and is not what cooperatives would want. However, if the Canadian government has another proposal, we would certainly welcome it.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

I remain positive when it comes to that. Many people have told us about their cooperative since yesterday. I think this report is an opportunity to enhance Canadian cooperatives and think about the future. We need to know what we can do so that we can support them and consider the future. The federal government and Canadian cooperatives must establish a strong relationship.

I am thinking of Quebec, where the cooperative movement is really dynamic. Could the federal government adopt similar measures to boost the Canadian cooperative movement? I think that's possible.

[Francine Ferland]

That is our greatest desire. If the federal government were to adopt similar measures, the domino effect would certainly be considerable.

During my presentation, I briefly discussed business succession. We see a lot of company relocation in our regions. They are bought out by foreign entities and, a few years later, they are closed, unfortunately.

The cooperative approach provides an alternative for keeping those companies in our regions—in Quebec and across Canada. The federal government could create a program for supporting job maintenance and company anchoring in our regions, instead of allowing foreign takeovers.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

My question is for the Agropur representatives. What is the main difference between your cooperative and a private company? What would you say is the biggest difference?

[Lorraine Bédard]

Agropur is a cooperative. So we are talking about a people's association, which is managed democratically. It has a board of directors made up of members.

The way the cooperative is managed is not different from the way another company is managed. However, certain fundamental values permeate our organization. We have an associational life that helps us maintain a connection between our member base and our company.

I think that's a success factor that allows our company to continue growing in its owners' interest.

[The Chair, Conservative, Blake Richards]

Thank you.

We'll move now to Mr. Lemieux for five minutes.