Thank you.
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.
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.
2:20 p.m.
President, Alberta Federation of Rural Electrification Associations (AFREA)
Thank you.
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
By the way, Mr. Chairman, there was this matter of uniqueness. I don't want to belabour the point, but I've been advised by someone that there is such a co-op in Ontario, of all places. It's a rural electrification one. I don't know if our analyst could dig that up. It would be useful, especially with the ongoing negotiations and the discussions with the Premier of Alberta. I would like my premier to have a little leverage, at least, on the energy front.
On FCC, I found it rather untoward that they would come to us, without having consulted their board, and respond to a July 10 comment similar to one you've made. I'm of the view that any solid association should welcome a review. It was over 10 years ago that they were given the mandate they have. I hope that the Parliament of Canada will review their mandate, because we're hearing things here that I think need to be looked into.
I wanted to ask a question. I did a bit of digging. And I have to give these numbers, because I found them astounding. The top five banks in the country—we know who they are—in 2011, gave their senior staff $8.87 billion in bonuses. It was $8.3 billion in 2010. It was $8.2 billion in 2009, and believe it or not, in 2008, it was over $7 billion. That was the year we had a....
How does the credit union world treat bonuses, sir?
2:20 p.m.
President and Chief Executive Officer, Mountain View Credit Union Limited
They exist. I certainly wouldn't deny that. They're not as profound or as substantial as what I might suggest our counterparts in the chartered banks may be privileged to receive, but they do exist. It's based, typically, on the performance of the credit union and how well it has done in a number of different areas, not just financially.
2:20 p.m.
Liberal
2:20 p.m.
President and Chief Executive Officer, Mountain View Credit Union Limited
Again, with 34 credit unions in Alberta, there are 34 different plans. There may not be 34 variable plans or bonus structures. I do know that my colleagues, my peers in similar-sized credit unions, participate in a bonus program, or a variable compensation program. In size, it would be maybe 15% to 35%, depending on performance, of your base salary.
2:20 p.m.
Conservative
The Chair Conservative Blake Richards
Thank you very much.
We'll move now to our second round of questioning. First up we have Mr. Boughen.
2:20 p.m.
Conservative
Ray Boughen Conservative Palliser, SK
Thank you, Mr. Chair.
Let me say welcome to our guests who are with us this afternoon. We appreciate your taking the time to share your knowledge with us. As a number of my colleagues have said, this is a learning curve for all of us in terms of what's happening with co-ops and credit unions.
Starting with Robert, I'm looking under crown corporations in your handout. I see that there are different percentages here. You have 5%. For Farm Credit, outstanding ag debt is 25%. Two provincial institutions hold another 20%, or close to 20%, for ag financial services. That's 50% of the dollar. Where does the other 50¢ go?
2:20 p.m.
President and Chief Executive Officer, Mountain View Credit Union Limited
I would have to suggest that the chartered bank system has a piece of that pie as well—probably the bulk of that, probably 40%, and then there might be private lenders as well.
2:25 p.m.
President and Chief Executive Officer, Mountain View Credit Union Limited
Just to note, the credit union system holds 5%, Farm Credit Canada 25% , and the other two provincial crown corporations 20%.
2:25 p.m.
Conservative
Ray Boughen Conservative Palliser, SK
Thank you.
You mentioned that the FCC is a competitor of your operation, and I'm sure there is some competition there. We heard a number of credit unions state that people come to them to facilitate a loan when there is no one else to turn to, that the other financial institutions haven't been there for them but the credit unions have.
How do you respond to that, given what is happening with Farm Credit Canada?
2:25 p.m.
President and Chief Executive Officer, Mountain View Credit Union Limited
I think our experience with Farm Credit Canada is more that they are out there actively seeking new business and they're approaching our members. They're offering some incredible deals, 10-year terms, at fixed rates, below market rates, with 100% financing. We just cannot with those aspects from a regulatory perspective and prudent business practices. It's not a question of our turning a farm member down; it's more that of Farm Credit Canada approaching our membership actively.
2:25 p.m.
Conservative
Ray Boughen Conservative Palliser, SK
Okay.
Thank you for that.
Merv, when we talk about what's happening with rural electrification, what services do you supply that other operations in the province aren't able to supply in terms of electrical operations?
2:25 p.m.
President, Alberta Federation of Rural Electrification Associations (AFREA)
Some of the REAs buy and sell their energy. Others contract with EPCOR or Direct Energy, and they supply the energy part. The other thing is that the REA I'm with is also one of the partners in Corridor Communications. We got into it with the hope that we could read our meters using that, but because we live in hilly country, it's very hard to do. We were one of the first ones to do the airplane flyover, and we read our meters from 3,000 meters in two hours.
2:25 p.m.
President, Alberta Federation of Rural Electrification Associations (AFREA)
The gas co-op beside us does the same thing. We actually are working with them.
2:25 p.m.
President, Alberta Federation of Rural Electrification Associations (AFREA)
It's 100%. It's the most accurate one.
As for other services, other than building the line to them, we own the line to the house.
2:25 p.m.
Conservative
Ray Boughen Conservative Palliser, SK
With this high-tech and all these innovations, are you able to keep your cost per kilowatt hour down, or has that escalated somewhat?
Dan's going to tell us about that.
2:25 p.m.
Vice-President, Alberta Federation of Rural Electrification Associations (AFREA)
Actually, the REA I'm in, which is different from Merv's, was the first utility in Alberta to get into the wireless reading.
Prior to that, we had contracted a meter reader, which would read a meter every other month and were about 85% to 90% accurate. Now we've replaced them with the new meters. We had a total payback within 13 months and a major cost savings. Rather than hiring the contractor and paying the cost of the meters and the investment and the interest on that investment, we read the complete REA, which is just over 8,000 services in a few hours once a month.
The members are very happy. The costs are down. Accuracy is there, as they're getting billed for what they're using, and there is no estimating being done any more. It's one of the best investments made in that area.
2:25 p.m.
Conservative
2:25 p.m.
Conservative
2:25 p.m.
Voices
Oh, oh!