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.
3:55 p.m.
NDP
Hélène LeBlanc NDP LaSalle—Émard, QC
In your brief, you thoroughly discuss the role of governments that can support emerging cooperatives.
Thank you very much.
4 p.m.
Conservative
4 p.m.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Thank you Mr. Chair.
I want to thank the witnesses for joining us and for their very nice presentations.
I would like to take advantage of Agropur being here to talk about its international component. We have heard from many cooperative representatives who have operated in their province and in Canada, but Agropur is active internationally. You have plants in the United States and Argentina. As a large cooperative, what has made you develop that international component?
4 p.m.
President, Board of Directors, Agropur cooperative
You need to understand that we operate in the dairy sector and under a supply management system. That system requires that we produce enough to meet Canadian consumption needs. If you think back, you'll recall that Agropur was initially a regional company that became provincial and then Canadian because of the rationalization of all those companies, either in processing or retailing.
A major rationalization process has taken place on both sides. As a result, today, three major players process from 75% to 80% of all of Canada's milk. Agropur is one of those players, as we mentioned in our brief.
In addition, we have clients on both sides of the border. Although the border between the two countries is impervious, especially in the U.S., our clients work on both sides of the border, and that also enables us to follow them.
Also, we don't think it's important to be big in order to become big. Our expansion is based on being able to maintain a balance of power against other major world players. Regardless of whether we are in a supply management system or another more open system, like in the U.S., companies' sizes force us to move in that direction if we want to continue developing. Those who have failed to do so in the past have disappeared. There are some glaring examples. Many companies—both cooperative and private—no longer exist.
We want to ensure the company's sustainability. We have been around for almost 75 years. We want to ensure the company's sustainability for the benefit of our members. We also want to make sure that, regardless of what happens in terms of market changes, our cooperative is financially strong and has a network of plants ready to process our members' milk. We want to provide them with assurance that they will have a place to process their milk.
4 p.m.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Has the Agropur cooperative model given you a competitive advantage in your acquisitions abroad?
4 p.m.
President, Board of Directors, Agropur cooperative
I think we are all subject to the same trade rules. I will speak on Agropur's behalf, as I am not a spokesperson for all cooperatives.
Agropur operates in a specific environment—that of the dairy sector. Whether companies are cooperatives or not, they face the same challenges, which consist in meeting clients' needs. With regard to development, we have the same concerns and obligations in terms of competitiveness. We must first make sure that the company is healthy. Financial soundness is a prerequisite for ensuring a company's development.
In a way, we are lucky because members are currently leaving almost $580 million in capital in the cooperative to support its development. That capital is redeemed over time. However, dairy producers who are members of Agropur allow their cooperative some leeway so that it can develop.
In some cases, that is easier in a merger of two cooperatives. Agropur is the cumulative result of mergers or acquisition of over 125 companies. There is a lot of movement.
4 p.m.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
The efforts and capitalization of all of Agropur's members help it become more financially sound.
4:05 p.m.
President, Board of Directors, Agropur cooperative
Of course, we do use traditional loans, bank loans, and so on.
4:05 p.m.
Conservative
4:05 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Thank you, Mr. Chair.
Are any of the companies you've acquired since the beginning cooperatives?
4:05 p.m.
President, Board of Directors, Agropur cooperative
That was mostly the case in the beginning. Nevertheless, the most recent acquisition—in 2004—involved a western Canadian cooperative.
4:05 p.m.
President, Board of Directors, Agropur cooperative
That was an acquisition, even though we are talking about a cooperative, as they did not want....
4:05 p.m.
Liberal
4:05 p.m.
President, Board of Directors, Agropur cooperative
Members have to agree. Depending on how big the investment is, the board of directors has some leeway in managing the cooperative.
4:05 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
I just wanted to make sure I have understood the financial aspect properly.
Ms. Bédard, during your presentation, you said that $482 million was given out in patronage dividends from 2007 to 2011. Does that account for all of the surplus?
4:05 p.m.
Corporate Secretary, Vice-President, Members Relations, Agropur cooperative
No.
4:05 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Every year, 25% of that $482 million was paid out in cash. That was the dividend percentage, and the rest was capital. After some time, portions of capital remained. If I have understood correctly, out of that $482 million, from 2007 to 2011, $230 million went to the members.
4:05 p.m.
Corporate Secretary, Vice-President, Members Relations, Agropur cooperative
The source is not the same, but I would say that is correct. Ultimately, our members received a total of $230 million over five years.
4:05 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Roughly, what percentage of Agropur's total surplus does the $482 million account for? Are we talking about a third, a half or two thirds?
4:05 p.m.
Corporate Secretary, Vice-President, Members Relations, Agropur cooperative
It's more than that. I think it's 65%.
4:05 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
So two thirds. Thank you. I will come back to this later.
My next question is for Ms. Ferland from the Fédération des coopératives de développement régional du Québec. Could you tell me roughly what percentage of activities has taken place in urban areas, compared with rural areas, in Quebec?
4:05 p.m.
President, Fédération des coopératives de développement régional du Québec
That's a good question. I don't have the exact answer. I think there are more cooperatives in rural areas in general, but I don't know what the exact percentage is.
4:05 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Allow me to ask you another question.
Canada has become urbanized to a large extent since the 19th century. The same goes for Quebec. Therefore, I assume that situation is evolving. With that in mind, has the urban activity level been increasing or decreasing over the last five years, for instance?
4:05 p.m.
President, Fédération des coopératives de développement régional du Québec
It has not been decreasing, but I don't have the exact data with me.
Some areas of activity only develop in urban settings. Take, for instance, the cultural cooperative sector. There aren't many cultural cooperatives in small villages, but there are in Quebec City and Montreal. That sector has developed a lot in urban areas.
In addition, many cooperatives are now starting up in immigrant communities, as well.
The cooperative approach is very adaptable. It is based on a need, which varies depending on the environment.
