Thank you very much for inviting us to appear before the Special Committee on Co-ops to represent the worker cooperative movement.
Thank you for inviting us to appear before this committee.
And that's the last French I'll speak.
My name is Hazel Corcoran, and I am executive director of the Canadian Worker Co-operative Federation.
Worker cooperatives are employee-owned businesses, and generally small businesses that operate according to the cooperative principles. Worker co-ops are a form of collective entrepreneurship whereby people come together to become entrepreneurs in a co-op framework. They are present in many different industry sectors, such as forestry, IT, food production and services, fair trade, and more. Examples include: Taxi Co-ops; the Multicultural Health Brokers Co-op of Edmonton; the Big Carrot Natural Food Market in Toronto; La Siembra Co-operative in Ottawa, which makes Cocoa Camino chocolates and is one of our most popular members; Promo-Plastik of St. Jean-Port-Joli, Quebec; and Just Us! Coffee Roasters Co-op in Wolfville, Nova Scotia.
Today, there are about 350 worker cooperatives in Canada employing over 13,000 people. An estimated two-thirds of these are in Quebec. The Canadian Worker Co-operative Federation is their national, bilingual federation and it includes many members in Quebec. CWCF provides services, including support for start-up and ongoing management, a small worker co-op investment fund called the Tenacity Works Fund, research, and an RRSP program that allows our members to invest in their own businesses.
We have four main points to present: first, the distinction between the established and emerging sectors; second, the challenge of capitalization; third, the problematic changes in the RRSP rules; and fourth, worker co-ops and succession planning.
Our first point is that the co-op sector is neither monolithic nor homogeneous. There are the large, well-established parts of the sector, such as the credit unions, the large consumer co-ops, agricultural co-ops, UFA, etc. In contrast, worker co-ops and other emerging-sector co-ops are basically small business start-ups or conversions that have no operational ties to the established cooperatives. These two broad categories bring completely different sets of needs and present distinct opportunities to Canadians and warrant a different understanding by government.
To become involved with a credit union or large consumer co-op, one simply has to take out a membership and start using their services and buying their goods. To start a worker co-op, one must develop a market-driven business, develop the legal structure, and help develop the worker-members all at the same time. This is not an easy task and is best accomplished with the support of an experienced co-op business developer.
It is also important to note that many of the larger and very successful co-ops did receive this kind of support at their start-up stages 40, 50, or even more than 100 years ago. The challenges for emerging co-ops are exacerbated by the fact that lawyers, accountants, and others are usually not familiar with this business model. In parts of the world where knowledgeable support is made available for worker co-op starts-ups through direct government support or favourable regulatory environments, the sector has hundreds of thousands of employees and tens of thousands of worker co-ops. So although our sector has been one of the fastest growing co-op sectors in Canada, we think it still has huge potential for employment creation in the future.
I would now like to have our financial officer, Peter Hough, present about our second point, capital.