Evidence of meeting #7 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 credit.
A video is available from Parliament.
Financial Officer, Canadian Worker Co-operative Federation
Basically a worker cooperative is an employee-owned enterprise that is democratically operated following the cooperative principles incorporated under the cooperative act.
Conservative
Michelle Rempel Conservative Calgary Centre-North, AB
Out of curiosity, because we're talking about raising awareness, does that create any issues with regard to governance, or hiring, or management issues? How does the cooperative model deal with hiring and firing employees?
Financial Officer, Canadian Worker Co-operative Federation
One of the first things you learn when you join any cooperative is that you're there based on responsibilities and obligations to the cooperative. Anybody in any kind of cooperative, whether it's a credit union or a worker cooperative, can be kicked out of the cooperative.
So you separate out the governance functions from management functions and your work functions. However, I might be working as a meat packer in the grocery store and I might actually be the chair of the board of the worker cooperative. Within that cooperative development process, people really have to learn how to take hats off and on and understand the roles and responsibilities and those sorts of things.
When we say it's a more complicated structure, we all know.... It may not be pleasant, but it's simple to work with a boss who tells you what to do. But in terms of a worker cooperative, you'll have bosses and you'll have very different kinds of management structures within worker co-ops. Some are very horizontal and some are very conventionally hierarchical.
Conservative
Michelle Rempel Conservative Calgary Centre-North, AB
So in that situation, if someone were to exit—they were terminated or whatnot—would they retain their membership in the cooperative or would the cooperative buy it out? How does that work?
Financial Officer, Canadian Worker Co-operative Federation
Essentially what happens is that when you join the cooperative, you make an investment into the cooperative. Basically you do that with par-value shares. You then get your profits built up over the year, which are, I would note, taxed as earned income. Unlike a corporation, when I get my profits from the worker co-op I'm actually paying earned income tax on it. It may be retained as shares in the cooperative, and then when I leave the cooperative the cooperative buys back all of my shares that I've built up through my initial investment and my profit-sharing.
As I said earlier, there's no capital gains because they're par-value shares when they're issued to you. You purchase them after tax, and you receive them without any tax benefit.
Executive Director, Canadian Worker Co-operative Federation
I would just add that if you are fired, essentially then you would be removed from the membership at the same time. If you quit, then you would also be removed from the membership. You have to be working in the worker co-op to be a member.
Conservative
Michelle Rempel Conservative Calgary Centre-North, AB
I'm not sure if you spoke to this already, but do you see examples of unionized worker cooperatives?
Executive Director, Canadian Worker Co-operative Federation
There are some, although not a very high percentage.
Executive Director, Canadian Worker Co-operative Federation
In Quebec there are paramedic cooperatives. I think there are eleven of them around the province, and they're all unionized. They were previously a different kind of enterprise and they were unionized. Now they're unionized worker cooperatives.
Are there any others we can think of?
Financial Officer, Canadian Worker Co-operative Federation
There are not many in Canada.
Executive Director, Canadian Worker Co-operative Federation
There are not very many in Canada. In the U.S. there are more. It's more common there, for some reason.
Here, I don't know if I can think of other examples.
Conservative
Michelle Rempel Conservative Calgary Centre-North, AB
No, I was just curious. I think it's a business model that not a lot of people are familiar with.
Conservative
Michelle Rempel Conservative Calgary Centre-North, AB
Ms. Goussaert, you had spoken earlier about group development sometimes being an impediment to the development of cooperatives or their ongoing maintenance, and you mentioned the patience and resources that are needed to do that. How do cooperatives overcome that barrier when they're being formed?
Executive Director, Manitoba Cooperative Association
There have been a lot of resources available. There's support from their co-op associations. Co-op federations sometimes will assist. There's a lot in terms of setting up your governance model, training on what a co-op is and what your roles and responsibilities are.
Peter talked about it really well in terms of separating the functions. Often co-ops will start in small communities where you have somebody who owns one business down here, and another business, and they're all on the same board. How do you reconcile that for the betterment of the co-op as opposed to your own personal interests? That's what it is to govern, right?
That's the piece that takes a lot of time, and it is a time thing. That's where co-ops perhaps have not been as quick to move on a lot of initiatives, because they have to take the time to build the group dynamic before launching.
Conservative
Conservative
Conservative
Michelle Rempel Conservative Calgary Centre-North, AB
He's from my neighbouring riding, too, you know. There's no love.
Conservative
The Chair Conservative Blake Richards
I would like to thank all of the witnesses for their contributions.
The meeting is now suspended.
[Proceedings continue in camera]