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.
President, Fédération des coopératives de développement régional du Québec
The tax aspect can be developed. It does not cost the government very much money, has a multiplier effect and is very helpful to cooperatives. All the tax aspects are not insignificant. Earlier, we were talking about a federal cooperative investment plan that would constitute an incentive for cooperative investors to inject money into their company. This is a major contribution that does not cost very much if we consider the output.
I do not know if you have another answer to propose.
Conservative
The Chair Conservative Blake Richards
Do either of you have a very brief response to that? We've gone a fair bit over time, so if it's very brief, I'll allow it.
President, Board of Directors, Agropur cooperative
I will be brief. There are always bankers who can loan money and investors that can come forward, but financial assistance is always welcome. Sometimes, the assistance asked of the government is used for start-up purposes in order to ensure that new companies and cooperatives have the support they need. I think that we can also look at the situation from this perspective. The help that was available in the past was welcome.
Conservative
NDP
Malcolm Allen NDP Welland, ON
Thank you, Chair.
Thank you to our friends who are here today to talk to us.
As my colleague, Madam Freeman, said earlier, it is about choices.
I thank you for your recommendation 8, which talks about a renewal of a program. I have to agree with my friend, Mr. Lemieux, that it's not about taking something away, but about something that's coming to an end.
Do you want to do it again?
Mr. Preston and I agree that there are our lovely spouses who we put as number one. When you had that first dance with your soon-to-be spouse, you wanted to have another dance with that soon-to-be spouse. It seems to me that this is a program that when we had our first dance with it and saw how wonderful it was, why wouldn't we dance again with it rather than simply say no?
But it is about choices. If we renewed it for 10 years and we sold the gazebos, we'd have the money. But it seems to me that somebody built gazebos instead and spent tens of millions of dollars building gazebos rather than four million dollars a year for the next 10 years, which would have given us a program that's renewable. So it is about those choices.
From what I've heard from you this afternoon and what we've heard in the past two days—and my colleagues across the way have actually agreed—it seems that that you're successful in more ways than just being profitable. You actually keep jobs in communities and create jobs in communities where jobs have been lost. Members of a cooperative won't usually vote their jobs to Mexico or to China, but companies whose share value might drop a tiny bit in a quarter or two quarters will, because they have to appease the shareholder, who isn't necessarily the worker. In a cooperative on the other hand, in your case at Agropur, your dairy farmers aren't about to vote to have your dairy sent somewhere else to process their milk when they're actually still here. Rather than say they'll send the dairy somewhere else and make it cheaper, perhaps getting a cheaper quart of milk as a result, they're saying, I'm part of it and I'm not actually going to vote ourselves away.
This brings us back to this whole issue of why, if it's a successful model, as I think everyone here has said it is—though it's obviously not the only model, the only thing we should do in an economy—we wouldn't take that success and try to emulate and nurture it so that we can improve and expand it? Would we not want to do that as policy-makers, from your perspective? I recognize that you have a vested interest, which is okay, as we can take it from that perspective, but wouldn't that be something you'd want to encourage us to do as policy-makers?
You're free to jump in or not.
I can certainly make a question of something else or I'll just make another statement.
It's okay. I'm not trying to trap you, by the way.
President, Board of Directors, Agropur cooperative
I think that we live in a democratic country. In my humble opinion, cooperatives democratize the economy. I somewhat agree with you. I did not have the opportunity to respond to Mr. Lemieux's questions.
Wealth is created by Canadians, the cooperatives that are in place and Canadian companies. Ms. Bédard spoke about the sustainability of these companies. Many cooperatives will celebrate significant anniversaries in the next few years. We want to continue to be present in each of our sectors, to ensure our sustainability and to continue to create jobs for our children and grandchildren.
Our company made a business decision recently. Had we considered only the financial aspect, we would have chosen to sell part of our company to foreigners. However, we reassured our managers and confirmed to them that we wanted to keep all of our dairy sectors.
Our democratic life is very real. We consult our members every five years. During the year, we contact over 2,000 of our members who participate in this consultation. In 2002 and 2007, they reiterated their willingness to continue to be present in all dairy sectors. They wanted our company to continue to work under the cooperative model. This assured them that, no matter what happened economically, this company would be there to process their milk. This is an insurance for them and for future generations. A cooperative is a heritage received from previous generations. We want this cooperative to continue so that future generations can benefit from it.
I am not among those who are in favour of demutualizing and selling sectors. In 10 or 20 years, our children and grandchildren will ask us why we made that decision. I think that we need to look at the long term and keep the profits and the wealth in Canada. We need companies to pay taxes and create high-quality jobs and we need the expertise to remain in Canada. I am convinced of this. Sometimes, I find myself preaching to the choir, but I believe in this. It does not take anything away from other companies or from their development models. We are not saying that the cooperative model is the only one that should exist, but I believe that it has its place.
Conservative
The Chair Conservative Blake Richards
I'm sorry, Mr. Allen, your time has far expired.
We'll be moving now to Mr. Payne. You have five minutes.
I'm just going to caution all members. I've been pretty lax this afternoon. But please do not take advantage of it, because I don't want to have to start cutting everybody off right at five minutes, okay?
Conservative
Conservative
LaVar Payne Conservative Medicine Hat, AB
I hope you're as generous with me as you have been with everybody on this committee.
First of all, I just want to say thank you to the panel members for coming. It's important.
I don't think there's anybody on the committee, on either side, who has said that cooperatives have not done a great job here in the country, all across Canada. Certainly it's been a really good model to see, certainly for producing jobs, and for the membership, obviously, for producing some profits as well as long-term survivability.
First of all, I just wanted to ask a couple of questions of Agropur. I was listening to your presentation. You talked about having 27 plants in Canada. In what regions are all of those plants?
Corporate Secretary, Vice-President, Members Relations, Agropur cooperative
They are in Quebec, Ontario, British Columbia, and Alberta.
They are in Quebec, Ontario, British Columbia, and Alberta.
Conservative
LaVar Payne Conservative Medicine Hat, AB
Okay. Thank you.
I think I heard Mr. Bélanger say something about your purchasing a facility, a production plant, in Alberta.
Conservative
Conservative
LaVar Payne Conservative Medicine Hat, AB
Oh, in Lethbridge. Excellent.
The reason I'm asking is that I'm from Alberta. I'm glad to hear you're investing in our part of the country. That's a very positive sign.
One of the other things is that in the fourth paragraph of your presentation, on page three, you say that Agropur provides financial support to these cooperative to promote recognition and so on.
What type of financial support were you suggesting that you provide? Is it marketing? Is it cash? What comprises the financial support?
Corporate Secretary, Vice-President, Members Relations, Agropur cooperative
We receive a number of types of support but mainly support for provincial or national organizations, whether it be the Conseil québécois de la coopération et de la mutualité or the Conseil canadien de la coopération et de la mutualité. As Ms. Ferland said, we contribute to the government partnership program to promote the development of cooperatives. We are not part of a specific sector. Rather, we are there to support organizations that support the development of cooperatives.
We also support SOCODEVI, an international development cooperative, which has been around since 1984. This organization helps us to live by one of the cooperative principles, which is that of promoting international co-operation. At Agropur, we engage in international development in this manner by supporting the development of cooperatives in other countries.
Cooperatives are a powerful tool for supporting communities. Because we believe in our business model, we do what we can to support it. However, as I indicated in the brief, there is a limit; Agropur is a company and must therefore ensure its profitability and sustainability.
Conservative
LaVar Payne Conservative Medicine Hat, AB
Okay, thank you.
You also talked, on page 6, about reinvesting in infrastructure.
Could you tell us what kind of funding you've provided for infrastructure? What kind of investments have you made for that?
Corporate Secretary, Vice-President, Members Relations, Agropur cooperative
We have factories. We have to repair and maintain them and ensure that they have the most up-to-date technology. These are capital expenditures we make to invest in our infrastructure so that we are always on the leading edge and remain competitive. That is what we were talking about here. Now that time has passed and given Agropur's strong financial position, Agropur is able to depend on itself to do this.
However, there are development projects for which we need financial help. We get the support we need from various banks or financial institutions.
Conservative
The Chair Conservative Blake Richards
You have about two seconds, so I think I will stop you there, Mr. Payne.
We will now move to Mr. Butt.
We have you for five minutes.
Conservative
Brad Butt Conservative Mississauga—Streetsville, ON
Thank you very much, Mr. Chairman.
Not being someone who has a lot of background in agriculture, I would be interested to know a bit more about the range of services that your cooperatives are providing and what the difference would be....
This is one of the things I'm struggling with too. I was in the property management business before I became a member of Parliament. I worked for an organization that was a collective of landlords or owners of rental apartment buildings. We could never get government to understand whether we were a business or a residence, because we were housing people. When I used to lobby municipal and provincial governments—I never lobbied the federal government in my previous life—it was often difficult for government officials to understand whether we were a business or were providing a residential service to people and managing their homes.
How do you look at cooperatives? You talk about their being a business, but you say they are different. What are the differences between being involved with a co-op versus being a traditional private sector company? For instance, what is the difference if you're a dairy farmer doing it on your own and not being part of a cooperative versus being in one? What would you say are the fundamental differences between operating as a co-op versus being a regular private business operating with a traditional private business model?
Corporate Secretary, Vice-President, Members Relations, Agropur cooperative
A cooperative is an association of people who create a company to meet a need. The need may be economic, cultural or of some other variety. In the beginning, there is a connection if we consider the basis for the cooperative and the reason for its creation. Basically, members of a cooperative help build capital, make decisions and share the cooperative's surplus earnings. They are connected to their cooperative. They help to work toward the cooperative's goal, the reason for which the cooperative exists.
When these four elements are combined, we have a cooperative. These elements do not exist in an investor-owned business, for example. An investor-owned business can certainly be managed in a democratic manner and can make a profit, but it does not share the profits it makes as a result of the reason it was created—to meet a consumer need. It does not share its profits with consumers. It shares them with its shareholders.
In our case, our shareholders are our users. They have the desire to meet the need for which they created the cooperative. They also find answers to problems within their organization. There is a therefore a connection between the reason the cooperative was created and the people to whom the money goes. The money goes to those who created the cooperative in order to meet their needs.
I do not know if my answer was clear, but the difference is democratic management, the sharing of the profits with those who created the cooperative. What I am saying may be a little bit philosophical, but it is relevant. It is part of the cooperative values and principles.
Conservative