Special Committee on Cooperatives Committee on July 26th, 2012

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

What are the sources of the funds?

[Andy Morrison]

We had an initial capital injection from various levels of government in 1986, and we have grown that. Initially, it was $10.2 million in capital; to the end of 2011, we have provided financing of more than $525 million to cooperatives across the Arctic since 1986.

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

Wow. Was all that self-generated?

[Andy Morrison]

Self-generated, reinvested—

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

That's a hell of a return for a $10.2 million investment.

[Andy Morrison]

It is a fabulous return. We're very proud of it.

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

You should be.

One of the biggest tasks, I suppose, is transporting goods from the southern part of the country to the northern part, if you will. Do you own or do you anticipate owning the means of transport, as a co-op?

[Andy Morrison]

The bulk of the product we ship to the north we ship by air, and we ship from multiple destination entry points to the Arctic. The infrastructure costs of owning an airline or owning multiple airlines is prohibitive. We partner with airlines across the Arctic, so we do not anticipate owning airlines. We did at one point in time own an aircraft, but it was just not the best use of capital. But we are the majority partner in a shipping company, Nunavut Sealink and Supply Inc., which ships product by sea. As we speak—

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

I have to stop you there, because I've got 12 seconds left.

I'll maybe put a question in quickly. There's a moving away of the aboriginal community into urban centres from reserves. Does that affect at all your business and your activities?

[Andy Morrison]

People are moving, in some respects, from smaller communities of the north to some of the larger communities, but the population generally is growing right across the north, so it is—

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

It's strictly limited to the north, then?

[Andy Morrison]

That's where we operate, correct.

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

Thank you, sir.

[The Chair, Conservative, Blake Richards]

Thank you.

We'll move to our second round of questioning now, and up first we have Mr. Payne. The floor is yours for the next five minutes.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chair.

I thank the gentlemen for coming to tell us all about the very successful co-ops that we've heard about from other organizations.

I want to start off with Federated Co-operative. I understand, of course, that the fuel piece is a very important aspect. If I might just ask in terms of the fuel, are you providing fuel to Calgary co-op and also to the Medicine Hat co-op?

[Vic Huard]

We provide fuel to all of our member retails. In fact, the primary mission of our co-op refinery complex is first and foremost to supply fuel to our cooperative retailing system members.

[LaVar Payne, Conservative, Medicine Hat, AB]

I buy most of my fuel from either of those two organizations when I travel back and forth to Calgary.

[Vic Huard]

Thank you.

[LaVar Payne, Conservative, Medicine Hat, AB]

Well, I'm a member. Actually, my wife is the member. We consolidated at one point in time.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Is there a conflict of interest, Mr. Payne?

[LaVar Payne, Conservative, Medicine Hat, AB]

What? The dividends are good.

Anyway, I just wanted to touch on this, Mr. Huard. You did talk about the amount of dividends that the individual retail stores were giving, I believe. I thought I heard you say a million dollars, but I—

[Vic Huard]

Oh, no. Over the last five years it was $1.1 billion in cash.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay, because $1 million didn't make any sense.

[Vic Huard]

I'm sorry. Perhaps I misspoke. I'm sorry if I misspoke. Thank you for pointing that out. It was $1.1 billion.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay. I thought it was much larger, because I know the amount of dividend that my—