Special Committee on Cooperatives Committee on July 27th, 2012

[Robert Marshall]

Yes, we do with other credit unions and then with Concentra as well. So we'll get involved with either buying tranches of mortgage pools or we'll participate in a syndication on a large funding arrangement.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay.

I did note that you did talk in your opening remarks about your contribution to the community. I wonder if you could give us a little more information about your investments in the community and how they have helped. I don't know if it's all the communities that you serve or just portions thereof.

[Robert Marshall]

We have a number of different initiatives that we get involved with on an ad hoc basis. In the small town of Beiseker, for example, we donated $25,000 I believe to part of a building project that they were doing for the community. Every year we commit to funding or sponsoring and bidding on 4-H sales, so we'll be there and we'll pay double what a calf is worth. But that's okay, as we're doing it for all the right reasons.

We have an annual charity golf classic, where just the other day we were able to donate $18,000 to a local hospice in one of our communities. It's those types of things that we're continually doing each year. Some of it's ad hoc, and some of it is certainly planned and prepared for.

[LaVar Payne, Conservative, Medicine Hat, AB]

Certainly we've heard those kinds of things from other credit unions and cooperatives that I think are really helping all the communities they serve throughout the various parts of the country.

I'd just like to go to Mr. Rockel, or Mr. Astner, on something.

You did say that you could only service farms, so there are no small hamlets or villages or anything that might be part of your district that you can serve?

[Merv Rockel]

You're right. In our agreement, we cannot serve hamlets or small towns. But we can serve subdivisions and, hopefully, they don't become hamlets or towns.

[Voices]

Oh, oh!

[LaVar Payne, Conservative, Medicine Hat, AB]

That's a good way to get around that I think.

Potentially you could grow your business.

[Merv Rockel]

To some extent, yes we can.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay.

What percentage of the grid does the federation own or operate overall?

[Merv Rockel]

It's 3% of the people, or 1% of the consumption of energy. As for the number of miles of line, I haven't got those figures.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay. I know there's a bit of a controversy going on about the expansion of the grid, so to speak, in Alberta. I'm just wondering whether you are involved at all in that process or are having input into it.

[Merv Rockel]

We did a presentation to the transmission committee, and our philosophy is that we have to have a reliable system, that it's really important. In rural Alberta, if a storm comes through, the last people who will get hooked back up will be those in rural Alberta. Therefore, we rely much more on a reliable transmission system than maybe the people in the cities.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay.

Go ahead.

[Dan Astner]

Just further to that, the federation has asked for representation on a lot of government committees. Currently, we sit on a cost-monitoring committee of the transmission system—on the expansion of that. The Alberta government looks at the federation for input from a consumer's voice, and the rural electric associations have a voice. They probably have more knowledge of the electrical system than the average consumer. So even though we're a fairly small number, they recognize that we are the end users and they listen to what the impact is on us.

[Merv Rockel]

We're knowledgeable end users.

[The Chair, Conservative, Blake Richards]

Thank you very much.

That concludes the second round of questioning. We do have a little bit of time remaining, so we can move into a third round.

First up there, I have Mr. Preston, and you have the floor for the next five minutes.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Thank you very much. I don't often get two chances. This is great.

I'm going to talk a little bit about governance. I'll leave it open to both of you.

Mr. Marshall, you said you have 11 units and are about to have 12. I take it you're opening in a new community.

[Robert Marshall]

Yes, we are, in Langdon, a town of 3,400 people just outside of Calgary, which has no financial institution today.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

When you go to make an expansion like that, I'm sure it's relevant even to your group, as a one member, one vote type of group. How do you get to a new place? You probably don't have many members in Langdon. Or do you have members in Langdon who are driving to one of your other branches, and are members somewhere else? How do you convince the people at Olds, for example, to say, “That's a great idea. Let's open up in Langdon and spend a whole pile of money building a new branch.”

[Robert Marshall]

Well, this is where we come back to our governance model. It's really our board of directors, who represent our members, whom we sit down with. We collectively build out our strategic plan and understand where our growth opportunities are. Are they things that we really want to go after? If it is something that's near and dear to our heart and we see it as a good decision, then how do we go about doing that?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

I would assume that occasionally the answer is no.

[Robert Marshall]

Yes, it is.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Obviously, in the one person, one vote system, for us, there were enough yeses so we're here. But one day maybe that will be the opposite and we might not be. The same happens in your business decisions.

Mr. Rockel, Mr. Astner, is it the same thing in your business? When you put forward something, how often does the membership just say, that's just too big of a risk for us, or we're growing too fast?

[Merv Rockel]

I'll tell you about an incident. We got involved in the meter reading and we thought we'd have opposition to it. People came to us and said, “Thank God we don't have to...”. The member would read the meter and send the information to the office.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Right, send the little card in.