Special Committee on Cooperatives Committee on July 26th, 2012

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

But neither do many small companies, right? They don't do an IPO either. If they're small, they haven't got anything to offer. Investors wouldn't be....

I think when you have a new start-up, they have the same challenges. They're perhaps a slightly different flavour, but they have the same problems with access to capital. You don't have any track record. You don't have anything to show. You don't have anything someone can put their hands on if something doesn't work out well. I think it's a challenge that's shared by anyone who has a great idea and wants to commercialize it and run with it.

I'm interested in knowing how you grew financially.

You're buying from another co-op in the United States, which is great—to see co-ops working together. You're buying goods at a particular price that you then sell to members, and you return money to your members.

You must have put aside money for expansion, for growth. Not all of our profits went back to...? I'm assuming that you must have a fund. We've had a number of cooperatives say they have a reserve for expansion and growth, and they build that reserve every year. They use that reserve to help them. They still need to seek additional funding, but that is what they start with. Is it the same with Mountain Equipment Co-op?

[Margie Parikh]

Yes.

We are not profit-driven, but we aim to create a surplus. That surplus goes back to the members in terms of a patronage return, and we use some of that capital to grow: provide more member services, purchase our products, do our Ottawa renovation. Beyond what we need to grow for our members, we return directly to our members.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Right. Is that a model you'd recommend to other cooperatives?

[The Chair, Conservative, Blake Richards]

I'm sorry, time has expired. If it's a yes or no answer, I'll allow it.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

I just wondered if that's a model you would recommend to other cooperatives.

[Margie Parikh]

It is the model that many cooperatives use.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Okay.

[The Chair, Conservative, Blake Richards]

Thank you. I appreciate the brevity there.

Madame Brosseau, you have the floor now for the next five minutes.

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

Thank you very much.

I'd like to thank you all for being here and sharing your stories of success.

Mr. Hastie, what you were talking about really made me think of a group I met in my riding. They're called SIT. It's a group that's been working for about ten years and they help integrate people who have maybe had trouble finding work, have had difficulties in their life, and they work now. They get contracts with bigger businesses and they recycle things. I went to their warehouse and I was amazed, absolutely amazed. What they do is so sustainable economically and for the environment. We all have TVs. At the end of the term, what do we do with them, right? What they do, and they just transform this, I think is amazing.

I was just wondering if you could talk a little bit more about what you do out there.

[Neil Hastie]

That's a great connection to the engagement piece, and that's serving a social need as well within the communities. That very much is part of the sustainability formula: the economy and the environment and communities. There are other examples like that. We have some examples of not-for-profits who operate what we call a bottle depot, where you take back your empty beverage containers. They employ disadvantaged citizens to work within the bottle depot.

Those are examples that do exist in a number of circumstances, but they are small in number. I think probably Saskatchewan, not surprisingly, has the largest commitment to that in its network of bottle depots, where they employ exclusively those with disabilities. They have 75 depots that employ exclusively people with disabilities. There are those kinds of natural connections. What we need is to create the chemistry that makes the connection happen. It has to be an organized activity, it's got to be organized under a structure, and that's of course where in fact something like the Cooperatives Act represents that potential structure that will empower those things to occur.

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

Enable it.

[Neil Hastie]

Yes, that's right.

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

That's amazing. Thank you.

Mr. McBain, I just had a few questions. This has been going on for about 50 years, the cleaning plants in Alberta?

[John McBain]

This would be our sixtieth year in January 2012.

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

How has it changed over the last 60 years? I think at one point you had a few hundred cleaning plants, and right now you have about 70?

[John McBain]

Yes, we now have 71 members in our association.

A lot of it has changed because we have lost a lot of the provincial and municipal involvement in our plants. When we first started 60 years ago we were able to access grants from the province and from the municipalities, as well as the memberships. We have lost that revenue, and a lot of the plants. As they've aged, maybe we haven't really kept up with some of the technology. Now, as agriculture is getting a little more money in it, we're looking at upgrading and some plants are trying to do some catch-up.

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

Okay. I guess with the introduction of a hybrid canola and the plant breeders' rights, that has meant the farmers are purchasing more seed and they're not cleaning as much also.

[John McBain]

With the canola, and stuff like that, that's been pretty well taken away from the seed plants. That's all done by the big companies now, the Bayers and the Monsantos.

As far as plant breeders' rights are concerned, those varieties are grown by some of the seed growers, and those seed growers can use the local seed plants to clean those seeds. So we are still involved with the plant breeders. We're cleaning up the varieties of grain all the time. So that's where a lot of the newer technologies come in, with the colour sorters and this sort of thing to try to keep the varieties pure.

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

It's really important to invest in research and innovation, I guess. Do you have a lot of money to invest? How does that work? How do you try to keep up with the coming changes and try to keep ahead? Is that a problem for you?

[John McBain]

Yes, it is a bit of a problem.

Basically, plants will try a new system. The one seed plant at Bashaw, about three years ago, put in the first colour sorter. By the end of this year, 30-some plants will have colour sorters installed. One plant will try something, and then everybody shares the information. If they can use it in their plants, then they look to invest in that kind of technology.

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

Thank you very much.

[The Chair, Conservative, Blake Richards]

Great. Thank you.

We will move to Mr. Boughen.

[Ray Boughen, Conservative, Palliser, SK]

Thank you, Mr. Chair.

Welcome to our panellists and to our individual person, Mr. McBain.

I have three questions I'd like you folks to deal with this afternoon. The first one is for you, John.

I'm wondering how many plants are really necessary in the seed-cleaning business. We know that the technology has brought forward different techniques and strategies to speed things up and make them more efficient. Is that true for the seed-cleaning business?

[John McBain]

Last year we cleaned a little over 33 million bushels in our 71 plants. This year we are going to be quite a ways above that, because more of these plants have put in colour sorters and that sort of thing.

The biggest thing is that we've had a big problem with ergot in our wheat. In the one plant that is quite close to us, at Beiseker, their volumes went from over 600,000 bushels to 1.8 million bushels in just over the year and a half after they put in their colour sorter.

If we can get these technologies and stuff, there is a huge demand out there.

[Ray Boughen, Conservative, Palliser, SK]

Thank you.

When I look at the outdoor equipment operation, certainly you folks at Mountain Equipment are capturing most of the buying market, I would suggest, at this time.

I'm interested in your thoughts, Margie. I have the feeling that you're saying that there is a place for government to help co-ops get going. They put money on the table. There are three levels of government: municipal, provincial, and federal. Which level of government do you think should be involved in getting start-up funds in place for new co-ops coming on?