Special Committee on Cooperatives Committee on July 27th, 2012

[Dale Ward]

I was just going to add that in trying to determine the level of uptake there may have been of these various programs, it might be a question that could be addressed through some of the associations, the Canadian Co-operative Association or the individual provincial co-op associations that may attract that money. But from Assiniboine's perspective or from Credit Union Central of Manitoba's perspective, we wouldn't have that data.

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

We could also ask our analysts to do that.

[The Chair, Conservative, Blake Richards]

Thank you very much.

We'll now move into our second round of questioning, and up first is Mr. Payne.

You have five minutes.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chair. And I want to thank all the witnesses for coming today.

Certainly I want to talk to a few of my constituents, the Red Hat Co-op, surprisingly enough, and I want to welcome Doyle and Albert to our video conference on cooperatives.

I know you talked about the 52 shareholders, but maybe you could give us a brief outline of the kinds of assets that the Red Hat Co-op currently has?

[Albert Cramer]

That's a question we weren't thinking about either.

This year alone we put up a new facility. We doubled our size. We spent $4 million on a new building. We spent $2 million on new equipment to package our cucumbers. It's all done robotically now, so it's a pretty neat piece of equipment. As a co-op, of course, we can do that collectively. So in terms of assets, I would say $10 million, maybe more.

[LaVar Payne, Conservative, Medicine Hat, AB]

Did your membership add additional funding in that, or did that come right out of the general reserves of Red Hat?

[Albert Cramer]

The way the cooperative runs, of course, we don't have a whole lot of reserve in the co-op. The banks fund it. We just get loans for it, and it's paid for with every packaged product that goes through there.

[LaVar Payne, Conservative, Medicine Hat, AB]

Just in terms of your packaging, I know you must have started out trying to sell your products to some of the local grocery stores. Could you just tell us what your process was to expand that, and how far do you reach across western Canada?

[Albert Cramer]

Our product goes a lot further than locally. We're into Saskatchewan, Manitoba. We go into British Columbia also, but not as much, because they have their own cooperatives and greenhouses there. But it goes all over western Canada. With that type of product and that volume, the odd time we even go into the U.S.

[LaVar Payne, Conservative, Medicine Hat, AB]

So you actually have been very successful. I'm certainly glad to hear that. I knew of the expansion. Of course, I've been able to talk with some of you folks over the last couple of years.

One of the things I understand is that you have a certified safety program, a traceability program. Maybe you could tell us a bit about that and how it has impacted your business.

[Albert Cramer]

Right now, with the traceability, if I pick a cucumber out of my greenhouse and it goes to Manitoba, they can link it right back to my greenhouse. That's how far the traceability has gone. We needed to do that for the stores and for all our customers, but it's come at a huge cost to us, too. We've probably spent $300,000, $400,000 to put this all into place, and I don't believe that we had a whole lot of federal or provincial funding to do this. So it's been at a huge cost to the co-op, yet by the same token, with the food safety that's in place now, we need to do that. I think we're probably right up to anybody's standards.

[LaVar Payne, Conservative, Medicine Hat, AB]

Was that a requirement of the grocery stores—the Loblaws, the Safeways, the Costcos, or the other co-ops that you may sell to?

[Doyle Brandt]

Yes, especially Costco. They're actually coming out with their own audit. Through the CanadaGAP program we are being compliant and meeting the recommendations. Every year the recommendations are pushed to a new level for food safety, and, of course, if we don't comply with the retailers' demands, they just don't buy from us. So we do comply, because we need the market. At the same time part of the problem is that we can't pass on the cost to the consumer, because the competition in the marketplace is quite stiff. We have lots of competition from B.C. so—

[LaVar Payne, Conservative, Medicine Hat, AB]

I'm sorry to interrupt, Doyle, but I have only about 30 seconds left and I just wanted to get another question in.

You talked about temporary foreign workers. I understand that is an issue. On the farm, labourers can be hired, and as I understand it, certainly the greenhouses are considered under farm labour, so you are able to bring in temporary foreign workers to help in the greenhouse.

How would you see that benefiting the Red Hat Co-op if it were available?

[Doyle Brandt]

Was the question about how the foreign workers benefit the greenhouse?

[LaVar Payne, Conservative, Medicine Hat, AB]

I know that temporary foreign workers are brought into the greenhouses under the farm labour. How would temporary foreign workers help the Red Hat Co-op in terms of their employee base and being able to continue to produce and grow?

[Doyle Brandt]

We are actually bringing foreign workers into the Red Hat Co-op now, but the problem is we can't bring them in under farm status, so there are different rules and regulations. What we want to see as a cooperative is that Red Hat Co-op is recognized under farm status, the same as our greenhouses, because it's an extension of our greenhouse. We're just not being recognized at the Red Hat as farm. That's what we'd like to see, because the Red Hat Co-op is farm, but they won't allow us to bring in workers under the farm status. They consider it a packaging facility and they consider it to be commercial. That's the concern we're having right now.

[The Chair, Conservative, Blake Richards]

Okay, thank you very much.

We'll now move to Madame Brosseau.

You have five minutes.

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

Great.

I would like to thank you all for being with us this morning. It's always a pleasure.

I guess a recommendation of the Red Hat Co-operative would be to have recognition under farm status so that you could have temporary foreign workers working in your greenhouses. Is that correct?

[Doyle Brandt]

Yes. We would like them to recognize the Red Hat Co-op as a farm entity, because co-ops for farmers are farm entities. That's our concern. Make the cooperative recognized under farm status. That would alleviate a lot of our problems right now.

I hope that answers your question.

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

How many workers do you have come in to work in your greenhouses?

[Doyle Brandt]

We have roughly 105 acres of greenhouses here. There are at least two workers per acre. In some of the greenhouses, such as Albert's greenhouse, they actually have about three to four per acre, because they grow under lights. We have well over 200 workers in our greenhouse industry, and we have probably 200 in our packing facility right at this moment.

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

Okay, thank you very much.

I just wanted to speak with the Federation of Alberta Gas Co-ops.

On the Government of Alberta website, it states:

Grants are provided to rural gas co-ops to help defray the cost of installing natural gas services. These grants can be related to the installation of individual gas services on existing infrastructure, upgrading of the infrastructure to maintain gas supply or for the securing of a new gas supply and related facilities.

I'm just wondering how you assist in administering these grants.

[Peter Harty]

Each co-op has its own administration. If they take on new customers, they have to submit an application to the government saying how many new customers they expect to install that year. The government then monitors it. At the end of the year, they have to submit their final numbers showing how many they installed and what the cost was. There's a base price a co-op has to absorb, and then the amount in excess of that is split on a 25%-to-75% basis. Once all your paperwork is completed and all your easements are in place, they issue a cheque for that portion of your costs for the year before.

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

I imagine that you have a good relationship on the municipal and provincial levels. What is your relationship with the federal government? Do you have a lot of dealings with the federal government?