Special Committee on Cooperatives Committee on July 26th, 2012

[Andy Morrison]

Because our members operate in the territories, we have a lot of dealings with the governments in the territories, in the Northwest Territories and Nunavut. We have less direct, day-to-day contact with the federal government, although the programs we—

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Some would say that's a good thing.

[Andy Morrison]

No comment.

We deal with government, depending on what the issue is. If it's the development of our financial literacy program, it's the Financial Consumer Agency of Canada; if it's transportation, the freight subsidy program relating to perishable nutritious foods, it will be Aboriginal Affairs and Northern Development Canada.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

At this point I don't want to look at the chair.

[The Chair, Conservative, Blake Richards]

You'd probably better not, because now I'm going to cut you off. Unfortunately, your time has just expired.

We'll move now to Monsieur Bélanger for five minutes.

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

Thank you.

Welcome, gentlemen, and thanks for being here.

Mr. Tully and Mr. Huard, I gather from your presentation that you have some integration or vertical integration in some of the areas of business. Can you give me a very short sample of that on the petroleum side?

[Vic Huard]

Actually the petroleum side is the best example, because that is our most vertically integrated part of our business.

We're involved everywhere, upstream, midstream, and downstream.

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

Do you refine?

[Vic Huard]

We do.

We are the owner of our wholly owned subsidiary, the cooperative refinery complex, legally named Consumers' Co-operative Refineries Ltd., in Regina, Saskatchewan. That refinery has been in operation now since 1935, and it's—

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

What's your supply? What do you refine?

[Vic Huard]

We refine Canadian-based crude stocks, mostly from—

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

From the oil sands?

[Vic Huard]

Yes: 40% of the feedstock into our refinery comes from the Canadian oil sands.

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

I don't want to pry into your plans here.

[Vic Huard]

No, that's fine.

I'm shocked this has come up.

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

Right.

I don't know if there's a growing consensus, but there's certainly more talk of Canada developing its own capacity to refine, as opposed to just shipping bitumen away. Is that something you would encourage in the co-op model, in particular?

[Vic Huard]

I'd say we've encouraged it. This year, in the next few weeks, we will be bringing on stream our section five expansion of our refinery complex, which is going to increase our current refining capacity from 100,000 barrels a day of input crude to 145,000 barrels a day of input crude over the coming months. As I said in our presentation, we're all in. We've made that expansion. It's a huge priority for us.

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

This is with your members' resources?

[Vic Huard]

Correct. We've self-source-financed the majority of this project. In recent months we did in fact go out and get a syndicated financial instrument to allow us to—

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

I'm almost tempted to ask if Peter Lougheed is a member, but I won't.

[Vic Huard]

I'm sure he's envious.

Do you know what? Peter Lougheed is in fact a member of the Calgary co-op. I will say that. I do know that.

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

Okay, I appreciate that. I look forward to learning more, as we have.

You mentioned something, Mr. Tully, about the lack of knowledge of co-ops. I hope this committee will put a bit of a dent in that. I hope for anybody listening over the last couple of days, today, and tomorrow, and perhaps when our report comes out, that indeed we'll have made a minor contribution to growing the knowledge of co-ops in Canada.

For the Arctic co-op, you mentioned the Arctic Co-operative Development Fund, created in 1995. How does that link to the CDI?

[Andy Morrison]

It doesn't. The Arctic Co-operative Development Fund is a stand-alone financial arm of the cooperatives of the Northwest Territories.

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

In which the Government of Canada participates?

[Andy Morrison]

It participated when we were incorporated. It is run completely and totally by the cooperatives in the Arctic. It is an extremely successful financial arm—