Special Committee on Cooperatives Committee on July 25th, 2012

[The Chair, Conservative, Blake Richards]

Thank you, Mr. Payne.

We'll move now to Mr. Harris. You have the floor for the next five minutes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you to all of our witnesses for being here today.

Before I start, I would like to move a motion having to do with committee business.

Mr. Chair, I'd like to serve notice of motion at this time that we intend to bring forward a motion that the Special Committee on Cooperatives invite the Minister of Agriculture to appear before the committee before August 30, 2012.

The clerk will be receiving an email shortly, in both official languages, with that motion, to be discussed later.

Once again, thank you for being with us. I have a number of questions, and I will start with you, Mr. Brun. You will be hosting the summit, which will get under way on October 7, 2012. Could you briefly explain why you decided to take on that role?

[Bernard Brun]

Thank you for your question, Mr. Harris and your interest in the summit.

As I mentioned in my presentation, the UN has declared 2012 the International Year of Cooperatives. So every country is invited to contribute and attend. In Canada, Desjardins Group is by far the biggest financial cooperative, with its nearly 6 million members. We had an opportunity to take part in certain events, but upon further reflection, we decided to do more. In the spirit of cooperation and coordination, rather than inviting just Saint Mary's University and the International Co-operative Alliance, we opted to invite the world to Canada so everyone could see how cooperative development had taken hold and grown here. It also provided an excellent springboard for requesting specific studies on how the cooperative movement has developed, on how this business model has evolved and on how it could benefit the economy and contribute to financial stability. In short, instead of taking part in a local event, we tried to create a cooperative-minded event that would bring Canada and the international community together. This kind of summit has never been put on before, its the first of its kind in the world. We are extremely proud and we hope it will be a resounding success.

[Dan Harris, NDP, Scarborough Southwest, ON]

I know we are looking forward to taking part and learning about best practices around the world, not just here at home. We hope the committee will hold off on its report until we have had a chance to attend the summit and read the documentation you have prepared. I think it's wonderful that you have already made a number of recommendations in your presentation and I have some questions about that.

Your third recommendation calls for a transfer of the statistical data compiled by the Rural and Co-operatives Secretariat to Industry Canada. Why are you recommending that?

[Brigitte Gagné]

First off, as you know, the Rural and Co-operatives Secretariat was the idea of the Conservative Party a few years back. Since then, the secretariat has been working with cooperatives, who see the organization as the gateway to the federal government. The fact that all the secretariat's resources have been cut significantly has repercussions. In particular, the statistics we used to rely on in order to understand the big picture and the state of Canada's cooperative movement will virtually disappear.

As I understand it, some of the statistical information compiled in 2010 is on hand, yet we cannot even access it because there isn't anyone who can work on it and convert it to an appropriate format. For us, that information is vital because it represents the only statistical data that exists in Canada that can tell us how big the country's cooperative movement is. That's all we have. So, of course, it has to be accessible. What's more, the federal government spent a lot of money on developing an entire data processing system for this specific purpose. We consider it vital that this data live on.

[Dan Harris, NDP, Scarborough Southwest, ON]

I fully agree with you.

Both your first and third recommendations mention Industry Canada. Yesterday, someone suggested that farming cooperatives be transferred to Industry Canada. Would that be better in your eyes?

[Brigitte Gagné]

That idea has actually been bouncing around for a few years now. I can recall a standing finance committee a few years back when I was asked the same question.

Because of the way the cooperative movement is evolving, the purpose it serves in an extremely diverse range of sectors and the momentum it is gaining within Canada's economy, the movement is no longer concentrated in the agricultural sector. It has spread everywhere: finance, funeral services, health care, fisheries, natural resources, forestry and so on.

It is clear then from that diversity of sectors that the movement is not just agriculture-based. Cooperatives need a gateway that provides for dialogue with the federal government. And it has to line up with the very nature of the cooperative movement. We saw Industry Canada as a department that would have the ability to address the needs of cooperative enterprises.

[The Chair, Conservative, Blake Richards]

Thank you.

We'll now move to Mr. Boughen for the next five minutes.

[Ray Boughen, Conservative, Palliser, SK]

Thank you, Chair.

Welcome to the panel. I join my colleagues in thanking you for being with us this morning.

I have a couple of questions. First, Mr. Adams, does your organization work with other national groups, like Ducks Unlimited? Do you have any partnership arrangements there, or any kind of liaison between your group and others here in Canada?

[Kip Adams]

Yes, sir, we do. We work with Ducks Unlimited. We work with the National Wild Turkey Federation, Rocky Mountain Elk Foundation, and numerous other non-profit wildlife conservation organizations, as well as state, provincial, and federal organizations.

We don't have a specific liaison to work with those other groups in Canada. I serve as our director of education and outreach, so I would facilitate that role. But yes, we work closely with many of those other groups on numerous issues.

[Ray Boughen, Conservative, Palliser, SK]

Thank you.

To the panel now, across Canada there are different mutual groups, including credit unions and co-ops. Do you see anything in terms of a national theme down the trail within the next five to ten years, where we would maybe have an organization from one of the provinces establish themself in other provinces and become part and parcel of the financial landscape of the country in terms of.... The Royal Bank is everywhere. The Canadian Imperial Bank of Commerce is everywhere. Do you see mutuals also taking that role across the country, being financial institutions that one can plug in anywhere in Canada—yes, no, maybe?

[Bernard Brun]

Yes, absolutely, but probably not in the way you were mentioning, like the Royal Bank of Canada.

As I mentioned in the introduction, the Desjardins Group already has close to $200 billion in assets. It is quite a large financial institution and active throughout Canada through its caisses populaires or subsidiaries.

We are also providing services and products to other credit unions. Don't underestimate our intercooperation together, as it's one of the characteristics of co-ops. We try as much as possible to work together. Within Desjardins we even have a special team to discuss and be in continuous contact with the credit unions to see how we can work better together, how we can offer those services. But at the same time, the purpose of a caisse populaire or a credit union is also to remain grass-rooted in its community.

That's why I always mention the way we work, which is more through a network. So it would be a network of caisses populaires or credit unions under a federation. We believe that a large part of the success of Desjardins is because its federation has real, effective power over the whole network. In the rest of Canada there are centrals in every province, but you have some that are active in more than one province. For example, Central 1 is a central that is active in British Columbia and Ontario.

So you will see, I believe, a lot of evolution on the credit union side and the caisse populaire side in the upcoming years.

[Ray Boughen, Conservative, Palliser, SK]

Right. Good.

Madam, what's your vision?

[Brigitte Gagné]

For the other cooperatives outside of the financial system, I would say that they have the same challenge as any other enterprise, which is the international market and opening markets. They have to be extremely strategic and begin to think outside of their own primary vision, I would say. For example, you will have Agropur here this afternoon. You can ask them. They are now in Brazil. They are looking at different ways of maximizing their work, doing business, and extending their market. La Coop fédérée is the same. It is now in Ontario, New Brunswick, and central Canada.

So all of our cooperatives are thinking strategically to position themselves inside an international market.

[Ray Boughen, Conservative, Palliser, SK]

Okay.

How's the time, Chair?

[The Chair, Conservative, Blake Richards]

You have no time left.

[Voices]

Oh, oh!

[The Chair, Conservative, Blake Richards]

We will move now to Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Chair.

And thanks to the witnesses.

It's interesting to hear, because the credit union I belong to, FirstOntario in the province of Ontario, obviously started out as an auto workers' credit union, with one branch. And now I think it is the third or fourth largest in the province and has moved along. In fact, their ex-CEO, Mr. Lahey, is here this afternoon. He is now the CEO of Alterna.

Madam Gagné, and I believe Monsieur Brun, as well, talked about this idea that folks are innovating and changing, because in many places, at least on the financial side or the credit union side, many small industries would have had a one-branch credit union. Whether that be places like Ferranti-Packard, for instance, that used to be open in St. Catharines and is now closed, that credit union had to find a place to go when those employees no longer had a place to work. They ended up merging with different ones. I think they went to Meridian, actually, which is the largest in Ontario.

You started to talk about innovation and the sense that the visions, perhaps, and the mission statements are changing, especially on the financial side. But I think you were also alluding to the sense that the visions, and perhaps the mission statements, were changing on the non-financial side of cooperatives. They are looking at a broader picture that, yes, can sometimes be within a province and sometimes not, and in fact, I think, can be international.

I'm interested as to how policy-makers can help with that type of innovation for those who wish to choose it. Cooperatives are about decision-makers on the ground deciding that they wish to change their vision. They are not about having someone tell them that they must change their vision. It's the opposite view of for-profits or the investment style whereby someone at the top says that we're going to buy this or go buy that. Cooperatives are grassroots organizations that say, “What do the members want to do?” Basically, if you change your vision, you go and ask your members what they want to do.

Are there things we can help with when members decide that they want to change that vision? Or should we just leave you to do it on your own?

I'll certainly take an answer from whomever.

[Bernard Brun]

I'll just make a short comment, if I may.

I don't believe that the credit union, and I can speak for Desjardins, is changing its mission. We're not changing our vision. Our vision is still to contribute to the economic growth of the members and the community to support the community. We do that, of course, through financial services, because this is what we do. But we still maintain the same focus. We're just adapting, probably, the way we react and how we interact with the other caisses populaires. We have the challenge of how concentrated we will get, how many caisses populaires we want to keep, and how we will stay grassrooted and connected within the community. That is part of the challenge. But as for the mission we have, we're still clearly focused on that.

I can say that Desjardins has $200 billion in assets, but we made $1.5 billion last year. Let's say that over the last year, we gave back an average of $0.5 billion to the community. It was through sponsorships, directly to the members, etc.

To go back, it's always the same mission, but the challenge of the way we will reach that goal, of course, is changing through time.

[Réjean Laflamme]

There are two parts to that answer. Firstly, let's consider the local aspect. As far as innovation goes, we're dealing with sectors where the cooperative movement used to have no presence. That means sectors such as wind energy in Ontario and home health care services for Canada's aging population. Those are major sectors that did not exist before. New sectors such as these have come on the cooperative scene in a big way, because of the movement's desire to meet the population's needs.

Now, let's consider the international side of things, which, by the way, we will be discussing at the summit in Quebec City in October. How can cooperatives work together more on the international stage? We were just talking about agriculture. The world's biggest farming cooperatives are actually coming to Quebec City and will discuss the possibility of doing business with one another because there hasn't been much of that so far.

Every country has sort of done its own thing. The Europeans are working on legislation to allow for European cooperatives. So you won't have just French cooperatives or British cooperatives, but European cooperatives. Perhaps we'll reach a point where we need something similar in Canada. Cooperatives could operate in the U.S., Europe and elsewhere.

[The Chair, Conservative, Blake Richards]

Thank you very much.

[Malcolm Allen, NDP, Welland, ON]

It's always reassuring to know that the mission statements aren't changing—

[The Chair, Conservative, Blake Richards]

Sorry, Mr. Allen—

[Malcolm Allen, NDP, Welland, ON]

—even though the adaptability has to change as far as the bigger and broader picture goes. My good ear did hear the tweep, tweep, tweep of his button over there, so that's my time.