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Evidence of meeting #6 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 co-ops.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Lyndon Carlson  Senior Vice-President, Marketing, Farm Credit Canada
Rob Malli  Chief Financial Officer, Vancouver City Savings Credit Union
Michael Hoffort  Senior Vice-President, Portfolio and Credit Risk, Farm Credit Canada
Glen Tully  President of the Board, Home Office, Federated Co-operatives Limited
Vic Huard  Vice-President, Corporate Affairs, Home Office, Federated Co-operatives Limited
Andy Morrison  Chief Executive Officer, Arctic Co-operatives Limited
John McBain  Vice-President, Alberta Association of Co-operative Seed Cleaning Plants
Shona McGlashan  Chief Governance Officer, Mountain Equipment Co-op
Margie Parikh  Vice-Chair, Board of Directors, Mountain Equipment Co-op
Neil Hastie  President and Chief Executive Officer, Encorp Pacific (Canada)
Kenneth Hood  President, Kootenay Columbia Seniors Housing Cooperative
Darren Kitchen  Director, Government Relations, Co-operative Housing Federation of British Columbia

2:35 p.m.

Conservative

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?

2:40 p.m.

Vice-Chair, Board of Directors, 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.

2:40 p.m.

Conservative

Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON

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

2:40 p.m.

Conservative

The Chair Conservative Blake Richards

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

2:40 p.m.

Conservative

Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON

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

2:40 p.m.

Vice-Chair, Board of Directors, Mountain Equipment Co-op

Margie Parikh

It is the model that many cooperatives use.

2:40 p.m.

Conservative

Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON

Okay.

2:40 p.m.

Conservative

The Chair Conservative Blake Richards

Thank you. I appreciate the brevity there.

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

July 26th, 2012 / 2:40 p.m.

NDP

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.

2:40 p.m.

President and Chief Executive Officer, Encorp Pacific (Canada)

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.

2:40 p.m.

NDP

Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC

Enable it.

2:40 p.m.

President and Chief Executive Officer, Encorp Pacific (Canada)

Neil Hastie

Yes, that's right.

2:40 p.m.

NDP

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?

2:40 p.m.

Vice-President, Alberta Association of Co-operative Seed Cleaning Plants

John McBain

This would be our sixtieth year in January 2012.

2:40 p.m.

NDP

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?

2:40 p.m.

Vice-President, Alberta Association of Co-operative Seed Cleaning Plants

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.

2:45 p.m.

NDP

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.

2:45 p.m.

Vice-President, Alberta Association of Co-operative Seed Cleaning Plants

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.

2:45 p.m.

NDP

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?

2:45 p.m.

Vice-President, Alberta Association of Co-operative Seed Cleaning Plants

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.

2:45 p.m.

NDP

Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC

Thank you very much.

2:45 p.m.

Conservative

The Chair Conservative Blake Richards

Great. Thank you.

We will move to Mr. Boughen.

2:45 p.m.

Conservative

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?

2:45 p.m.

Vice-President, Alberta Association of Co-operative Seed Cleaning Plants

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.

2:45 p.m.

Conservative

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?