Thank you.
Unfortunately, there's been one recent change that has hurt the capacity of worker co-ops to capitalize themselves through member investment. The measures regarding self-directed RSPs in the 2011 budget have rendered co-op shares ineligible for RSPs for members who hold more than 10% of any class of shares issued by the cooperative. This has eliminated a pool of members' capital that used to be available to help capitalize their co-ops. Many worker co-ops have fewer than 10 members. Whereas it used to be perfectly fine to hold more than 10% of a class of shares in a co-op within an RSP, if under $25,000, it is no longer acceptable. If an individual is affected, there are very high penalty taxes—even higher than for deliberate fraud in some cases. We believe these provisions are putting jobs at risk.
CWCF objected strongly last summer to the Ministry of Finance regarding these changes, as did CCA, CCCM, the Canadian Institute of Chartered Accountants, and the Canadian Bar Association. We implore the federal government to revoke these measures enacted in the 2011 federal budget.
Our fourth and last point is business succession using worker cooperatives. As we are sure you understand, there's a wave of business-owner retirements coming. The Canadian Federation of Independent Business has estimated that number to be 200,000. Although the process is already under way, we are currently witnessing only its earliest beginnings, and retirements should reach their peak between 2017 and 2020. This phenomenon will also likely manifest itself earlier in rural areas.
The social and economic risk is substantial and many companies risk closure, as a result of which tens of thousands of jobs could disappear. However, we also know that a solution is available, namely, that the employees of these companies can mobilize to save their jobs and communities by creating worker cooperatives. In Europe, this process is already well under way. The European Commission, and particular countries within the European Union, are actively encouraging the cooperative solution in the transfer of companies to their employees.
We strongly feel that the Canadian government needs to develop programs and approaches similar to those elsewhere so we can maintain locally owned jobs and services. Specifically, any development in this area should ensure that employee-owned co-ops are included and supported as one of the key options.
I will now turn it back to Peter Hough to give an example of a conversion and to conclude our presentation.