House of Commons Hansard #18 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was co-operatives.
John Finlay Liberal Oxford, ON
Mr. Speaker, pursuant to Standing Order 36, I have a petition signed by 135 constituents of Oxford who request that the Criminal Code be reviewed and amended to correct and clarify the sections pertaining to public nudity.
John Duncan Reform Vancouver Island North, BC
Mr. Speaker, I have a petition from the Courtenay area in my riding. These members of the Fish and Protective Association want 40 problem seals culled from the Puntledge River due to their predation of fish stocks.
The petitioners call on Parliament to advise DFO to implement the original plan which would allow the local native band to cull the 40 problem seals. This has the support of the majority of the community.
The Fish and Protective Association obtained 2,300 signatures on a separate petition to demonstrate support.
Jim Abbott Reform Kootenay—Columbia, BC
Mr. Speaker, I have in hand 100 signatures of people who state that we, the undersigned, the citizens of Canada, believe our national parks belong to all Canadians with our first priority to ensure the cost for Canadians and their families to use and enjoy the parks remain affordable, draw to the attention of the House that we are concerned about the increased entry fees to our parks.
There was a lack of public consultation on the new fee structure. The petitioners believe the standard fee of $2 for all passenger vehicles or $25 for a yearly pass should be set for entry into all Canadian parks.
John O'Reilly Liberal Victoria—Haliburton, ON
Mr. Speaker, pursuant to Standing Order 36, I have the pleasure to present this petition regarding public nudity.
Howard Hilstrom Reform Selkirk—Interlake, MB
Mr. Speaker, I am pleased to present two petitions signed by 100 of my constituents in the Selkirk and Beausejour districts.
The petitioners ask this House to support Motion No. M-300 and to retain section 43 of the Canadian Criminal Code. These Canadian parents wish to ensure that Canada continues to recognize the right and responsibility of parents to bring up their children according to their own beliefs.
Deborah Grey Reform Edmonton North, AB
Mr. Speaker, I wish to present a petition pursuant to Standing Order 36. The petition comes from the Christian Booksellers Association of northern Alberta.
The petitioners say that we should not have to pay a tax to read. They say that the GST is the first federal tax in Canadian history to apply to the Bible and other reading material. They say that taxing reading material is unfair and wrong, that literacy and reading are critical to Canada's future and that removing the GST from reading material would help to promote literacy in Canada.
They urge Parliament to remove the GST from books, magazines and newspapers, and they ask the Prime Minister to carry out his party's repeated promise to remove federal sales tax from reading materials.
Of course I would take it one step further. It seems to me, and I was convinced, that they wanted to remove the GST, scrap, kill it, abolish it from everything, so I think this would be a great idea.
PetitionsRoutine Proceedings
The Acting Speaker (Mr. McClelland)
The Chair will take this opportunity to advise members that when they are presenting petitions it would greatly help the Chair if everyone who wants to present a petition would rise. That way we can spot members and call them in some sort of order.
Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, I ask that all questions be allowed to stand.
Questions On The Order PaperRoutine Proceedings
The Acting Speaker (Mr. McClelland)
Is that agreed?
Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.
Lyle Vanclief Liberalfor the Secretary of State (International Financial Institutions
moved that a ways and means motion respecting the imposition of duties of customs and other taxes, to provide relief against the imposition of certain duties and taxes and to provide for other related matters, be concurred in.
Lyle Vanclief Liberalfor the Minister of Industry
moved that Bill C-5, an act respecting cooperatives, be read the second time and referred to a committee.
Mr. Speaker, it is a pleasure to stand in the House today to make some comments at the second reading stage of the Canada co-operatives act.
This bill will help federally incorporated co-operatives to grow and prosper here in our new competitive economic environment. As members will know, I have been involved in the business of farming all of my life. In my new role as minister of the crown I wear a number of hats, including one with the word “co-op” on it.
Co-operatives have made a tremendous contribution to Canada's economic and social development and we must ensure that they continue to do so.
I express my appreciation to the Minister of Industry and his departmental officials who were instrumental in shaping the co-operative legislation before us today. Officials in our respective departments worked closely in developing policy for this legislation. They worked very closely as well with the Canadian Co-operatives Association and Conseil canadien de la Co-opération. These two organizations played a key role in the development of the legislation.
I know from personal experience the importance of co-ops to the lifeblood of the country. Four out of ten Canadians are members of co-operatives, including credit unions and caisse populaires. Co-operatives are an important vehicle for community based economic development. They are locally based and provide services locally. With so many co-operatives located in rural communities, the co-operative sector has a very significant role to play in maintaining and enhancing the quality of rural life.
Co-operatives emerged first in rural communities in response to an inadequate supply of goods and services at affordable prices. Agricultural producers used the co-operative model to market and process their production.
Stimulated by European immigrants, co-operative creameries were founded and formed by dairy farmers in the maritimes, Quebec and Ontario in the 1870s and 1880s. Co-operatives have been around for a long time.
In western Canada the first co-operatives were formed at the beginning of the century by agricultural producers influenced by American co-operative leaders. Today the biggest non-financial co-operatives in Canada in terms of revenues are agricultural co-operatives. In 1996 eight of them had revenues greater than $1 billion. It has been estimated that co-operatives account for 47% of the market share for poultry, 57% for milk and 59% for grains.
With industrialization people from rural communities across Canada moved to urban areas and brought with them to the urban areas their institutions including co-operatives. Today a majority of co-operatives are located in urban areas. These include housing co-operatives and credit unions.
Over all Canada's 10,000 co-ops employ about 136,000 people, with total assets of more than $155 billion. Co-operatives are a potent force across a wide range of economic sectors from agriculture and fishing to housing, to retailing, to public services.
Many co-operatives are governed by provincial law, but 50 co-operatives under federal jurisdiction conduct business in more than one province and are among the largest co-operatives in the country.
The grassroots partnership inherent in co-operatives can play a major part in achieving genuine lasting economic growth in our cities and in our rural communities. Co-ops are major economic engines in Canada with the top 50 co-operatives increasing their workforce by 5% in 1995. The co-operative movement reaches into every sector of the Canadian economy. Consumer co-operatives, mainly retail enterprises, had more than three million members and $6.4 billion in revenue in 1995.
Perhaps more important the co-operative movement is tightly woven into the social fabric of the country. For example, service co-operatives are a growing part of Canadian communities in the areas of child care, housing, health, community development, fine arts and cultural services.
Worker co-operatives, mainly small and medium size enterprises, are becoming well established and give Canadians more control over their jobs and an opportunity to open viable businesses. In some cases they have helped keep business ventures alive in the face of closures or layoffs.
Another example is aboriginal co-operatives which have played an important role in the economic development of native communities. With more than 20,000 members they are the second largest source of employment in the north after government.
The legislation before the House today provides co-operatives with the tools they need to continue their long history of contributing to the economic and social make-up of Canada. Under the revamped legislation co-operatives would be given a modernized framework similar to the legislation governing other federal corporate and financial institutions and eliminating needless red tape.
For example, incorporation procedures would provide for an approach closer to the Canada Business Corporations Act. Under this new co-operative legislation, however, enterprises would have to certify that they operate on a co-operative bases.
Co-operatives will be better equipped to compete with other businesses by having more flexibility in the make-up of their boards of directors. They will also have new opportunities to raise capital.
Under the new legislation a co-op will be able to issue investment shares to non-members. This will allow co-operatives better access to equity financing while maintaining control of co-operatives in the hands of its members.
Putting co-operatives on an equal footing with business corporations through modernized corporate governance rules requires a strengthening of co-operative principles in the legislation. Co-operatives unite voluntarily and pool their resources in pursuit of common economic interests.
They embrace co-operative principles which centre around concepts of democratic control, equality, equity, education and concern for community. The decisions of co-operatives reflect the interest of the communities in which they operate.
These essential features will be strengthened and enshrined by reinforcing the requirement that a co-operative must be organized and operated on a co-operative basis.
Co-operatives are a powerful form of business organization which contributes in a very significant way to economic growth, job creation and prosperity of communities across the country.
Modernized legislation will equip these co-operatives with the legislative and regulatory authority needed to take advantage of options designed to strengthen their ability to prosper and grow in an evolving economy.
Co-operatives have already made an important contribution to rural Canada and to the economic renewal of our rural communities. This is a key priority of the government, a commitment we have been delivering on since we took office.
We are helping rural Canadians access information technologies and the information needed to develop a vibrant, self-reliant and innovative business sector. In part this is to provide rural Canada with the tools it needs to take greater charge of its future. A new Canadian co-operatives act is another important tool to help make that happen.
Co-operatives will continue to play an important role in promoting jobs and growth in the future as they have in the past. For my part I intend to be a strong and effective voice for the co-operatives sector in the federal cabinet and to do all that I can do within my department and my jurisdiction to help position this sector for sustained growth into the next century.
Canada Co-Operatives ActGovernment Orders
The Acting Speaker (Mr. McClelland)
Before we resume debate, by agreement the House leaders made it possible for the hon. member for Regina—Lumsden—Lake Centre to speak next. We would then go back to the regular rotation.
Bob Kilger Liberal Stormont—Dundas, ON
Mr. Speaker, I rise on a point of order. In the spirit of co-operation the member for Regina—Lumsden—Lake Centre will have the normal allocation of time that he would have if he was in his normal place of rotation, which would be 20 and 10. The spokespersons for the official opposition and the Bloc would retain their 40 minute allocation in their usual rotation.
Canada Co-Operatives ActGovernment Orders
The Acting Speaker (Mr. McClelland)
The Chair thanks the the government whip for clarifying the situation.
John Solomon NDP Regina—Lumsden—Lake Centre, SK
Mr. Speaker, I am very please to say a few words about Bill C-5.
It is quite fitting that we were speaking about co-ops. In the spirit of co-operation I express my appreciation to the Reform Party, the Bloc Quebecois and the Liberal Party for allowing me to speak first due to a prior commitment.
I also express my appreciation to the leader of the New Democratic Party for assigning me the critic areas of small business, western economic diversification and co-ops. All these areas are of great interest to me. I have been a business person and a member of the co-op and credit union movement for 27 or 28 years. That is a long time for a young person like me. Of course I joined the credit union and co-operative movement many years ago.
Bill C-5, an act respecting co-operatives, is the reincarnation of Bill C-91, tabled in March this year, which died on the order paper with the dissolution of parliament.
Its reintroduction this fall marks another accomplishment in a very active year for the co-op movement in Canada, one in which we celebrate the 10th anniversary of the Canadian Co-Operative Association founded by the former Co-operative College of Canada, which was very prominent in the province of Saskatchewan, and the Co-operative Union of Canada on September 24, 1987.
Also this spring in the Saskatchewan budget the NDP government of Roy Romanow announced significant new resources and a new focus on co-op economic development after some months of consultation and work with the co-op movement in Saskatchewan.
This summer in Vancouver the World Council of Credit Unions recognized the Canadian Co-operative Association for its outstanding work in assisting in the development of credit unions around the world.
As the minister stated, 14 million Canadians are members of a co-op, a credit union or a caisse populaire. Some 10,000 co-ops in Canada employ about 135,000 workers often in regions of the country or economic sectors that have been ignored by the traditional market economy.
Some producer and marketing co-operatives have been very successful. Some 17 of the top 500 revenue producing companies in Canada are registered as co-ops. In 1995, 617,000 people belonged to agricultural co-ops alone. They are very significant players in the economy.
These 617,000 people in agricultural co-ops generated $16 billion in sales and handled 40% of total farm cash receipts in the areas of grains, oilseeds, dairy products, eggs and poultry, livestock, fruits and vegetables.
Co-ops also make a contribution to their communities inspired by unique needs identified in the far corners of our country. Many members will acknowledge, as we do in Saskatchewan, that the co-op sector is one of the three major engines which drive our economy: the private sector, the public sector and the co-op sector.
We have always used the co-op sector in western Canada and other parts of the country as an instrument to achieve economic objectives where the private and the public sectors have failed or were not interested in pursuing those objectives in those areas.
I am very proud that we are dealing with the issue today and providing the co-ops in many ways with the modern instruments and utensils they require to meet the modern challenges facing us.
I raise some examples of co-ops. The Co-op Radio in Restigouche provides radio service in French for Acadians and local employment for northern New Brunswick. A co-op named Imagine That, an artists' marketing co-op in Duncan, B.C., helps local artisans sell their work to the growing tourist markets on Vancouver Island.
Arctic co-operatives work to meet the challenges of a remote economy and marketplace that exist north of the 60th parallel. The Mountain Equipment Co-op, started by a group of university students, has grown into a successful and popular consumer retail co-op operating in four of the country's largest cities.
Prairie Dog Alternative News in my home town of Regina is providing an alternative voice to the mainstream media. Its ownership is growing more concentrated by the year. We are very pleased to see that alternative prosper in Regina, Saskatchewan.
One of the two provinces where co-ops have been most at home is my home province of Saskatchewan. The other is Quebec. The Saskatchewan Wheat Pool founded by farmers in 1924 has grown into one of the largest grain handlers and agricultural co-ops in the entire world with annual sales in 1996 of $3 billion and gross revenues in the order of $4.24 billion, up from $2.8 billion just two years ago.
The Saskatchewan Wheat Pool is the largest co-op in Canada, followed by Federated Co-ops in Saskatoon. The Saskatchewan Wheat Pool is also the biggest corporation by sales in the province of Saskatchewan and the 35th largest company by revenue in the entire country.
As I said, the extent to which the co-op sector contributes to economic development in our country may be unappreciated by the general population. As one of the three engines it is a very key sector.
The contribution of the co-op sector has always been well understood in my home province of Saskatchewan and has certainly been appreciated by the New Democratic Party and our predecessor, the Co-operative Commonwealth Federation.
In particular I extend our congratulations on the occasion of National Co-op Week held just last week and International Credit Union Day held on October 16.
Bill C-5 represents quite an accomplishment for the co-op sector in Canada and puts it on the leading edge internationally. In 1996 the Canadian Co-operative Association, in co-operation with the conseil canadien de la coopération, presented a model bill to the federal government intended to update federal legislation regulating co-ops.
The Canadian Co-operative Associations Act, 1970 is thus receiving its first overhaul in almost 30 years and the resulting statute will in all likelihood serve as a model for coming changes in provincial statutory regimes for the co-op sector in years to come.
The two main thrusts of the bill are to offer some flexible financial alternatives to co-operatives so they can continue to operate successfully in the modern competitive global marketplace and at the same time to provide work to strengthen the cornerstone of the co-op sector's vitality, which of course is the rights of its individual members.
The federal statute applies to non-financial co-ops operating in more than one province. Only 51 of the 7,300 non-financial co-ops in Canada are affected, but some of them are the largest in the country. It modernizes the regulatory framework for incorporation, structure and organization of co-ops and permits co-ops to issue investment equity for the first time in order to tap new resources and new sources of capital. It also incorporates the revamped 1995 International Co-operative Alliance statement of co-operative principles into an updated definition of what makes an organization a co-op under the act.
Finally, a number of requirements have been modified to modernize the corporate statute law for co-operatives that are federally registered, and this complies with the Corporations Act in many respects.
As spokesperson for co-ops in the NDP I met with a number of officials with respect to this issue, Industry Canada, the co-operative secretariat at agriculture Canada. I have had consultations with the Canadian Co-operative Association, with prairie pools, with Federated Co-ops of Saskatchewan, with the president of the Saskatchewan Wheat Pool, Leroy Larson, representatives of the Alberta Wheat Pool and the Sherwood Co-op, among many others.
However, some sectors of the co-op movement, in particular in Atlantic Canada and some of the smaller co-ops in Saskatchewan, are not in full support of this bill. The differences exist between the smaller co-ops that support the traditional service to members co-op model and the larger co-ops that support the business model of co-ops.
When the bill is referred to committee, which we support, these issues have to be vetted, discussed and heard by the committee members. The NDP requests of the minister that the committee invite witnesses from both viewpoints so that we can understand more fully the differences they have with respect to this bill. No doubt we will hear more detailed views at that time.
I take this opportunity to acknowledge the vitality and maturity of the co-op sector of our economy and to recognize the active contribution co-op employees and members make to our communities.
On behalf of the New Democratic Party caucus I am pleased to offer support for referring this bill to committee for further review.
Eric C. Lowther Reform Calgary Centre, AB
Mr. Speaker, before I address Bill C-5 I would like to encourage all occupants of the chair to continue to maintain the decorum that we have had in the House and continue to set the high standard that you are. I would even encourage you to elevate this standard as need be. So please pass those comments on.
As I understand Bill C-5 this bill was actually prompted by the co-operative associations themselves. They recognized the need for change in its industry. They recognized the need to be increasingly competitive. They are competing against larger entities with smaller management hierarchies, with less bureaucracy. They are competing with large entities that are very customer focused and front line driven. They have to achieve some measure of increased efficiency if they are to survive.
They also realized they needed access to investment, investment dollars and capital. They also realized that in order to eliminate some of their redundancies in their operations they had to amalgamate, consolidate and knit themselves together so they could be more efficient to survive.
The co-operatives through all of this were dealing with reality. I want to speak about dealing with reality for a minute. I would really like to encourage our government today to take a lesson from what the co-operatives have been doing and start dealing with reality.
Recently the finance minister toured the country celebrating that soon we would have a balanced budget. It is wonderful to celebrate that, but it has been more than 27 years coming.
He presents it as if we are there, we have arrived, everything has been done. He is not dealing with reality. We have a $600 billion debt in this county and many of us do not realize it but we are sitting on an interest rate time bomb that could go off at any minute.
I can remember a day in Canada when interest rates were almost 20%. When they came back down to 12%, we all breathed a sigh of relief. We have a debt that has an interest rate of around 7% or 8%.
I think the likelihood of those interest rates going down is very small. The potential for them to go up is real. I read recently that there is already pressure to move in that direction.
Here we are celebrating almost having a balanced budget and yet we are sitting on an interest rate time bomb that could blow away that balanced budget in a second and we will never see the days of surplus. But we are not dealing with reality. We are celebrating an almost balanced budget.
How much is the interest on a $600 billion debt? It is $45 billion a year. How much is that? I cannot conceive of that much money but let us put it into perspective so that Canadians can understand.
We talk so much about the importance of secondary education. Forty-five billion dollars would pay for 4 million young people to go through a four year degree program. That is how much that is and we pay that out in interest every year.
We talk about the need for health care. There is a lot of talk from the other side of the House about how we do not want two tier health care. The best way to achieve that is to make sure there is a very strong basic health care system.
Forty-five billion dollars in interest on this huge debt, if we did not have to pay that, that amount of money would pay for every hospital in Canada including the ones that are being forced to close to operate for two years.
That is how much this is costing us, yet do we have a government that is dealing with reality like the co-ops are? No, we get a throne speech with 29 new spending initiatives. I heard lately it is 31.
Canadians are crying out for less government, not more government. We are asking the government across the floor to hear this.
There is something else that the co-operatives demonstrated. They demonstrated they have the ability to plan for the future. They realize that they need to gain capital so that they can build a secure future for themselves.
The government should allow Canadians the same privilege. Again I do not see it listening. Instead, what do we get? We get a Canada pension plan that has been there for 30 years that people have been paying into for 30 years. Where is the money? Nobody seems to know where it is.
The money that goes into that plan by young people and people working today is the same money that goes out of that plan to people who are collecting. It is a flowthrough system. There is no pot of money available. There is a $560 billion unfunded liability there. It is a flowthrough system.
Canadians are even losing faith in this system. For all the great rhetoric we are getting from across the floor, a recent study done in Maclean's magazine showed that 66% of Canadians said this program will not be there when they need it. They have lost faith in this program. What is the government's answer? Its answer is to give us more of a plan that did not work, not just a bit more but 73% more.
It will go from taking 5.85% from our cheques to 9.9%, effectively 10%. That is a 73% increase in a plan that has proven to not work. That is the largest tax increase we have seen. That is 10% off the income of every Canadian, your money flowing into a system that does not work.
What troubles me about this on top of everything else is that the young people of our country who have become trained and are eager to work and build a future for themselves are faced with 16% to 17% unemployment. We have a government that increases payroll taxes by 73%, further shortcircuiting the chance for these young Canadians to build a future in Canada.
The government has an answer for us. The answer is another government appointed investment board to manage the money that is contributed. If it is consistent with the track record of most government appointed investment boards, I can see why Canadians do not have much faith in it.
The question that should be asked by the members on the opposite side is whose money is this. This money is earned by Canadians. It is not a tax. It is meant to be there when they need it at retirement age. Let them own it and manage it. Within successful private financial institutions that are professionals at managing money, they cannot do worse than the government has done in the last 30 years. It is not possible to do worse than that. Even modest evaluations with conservative interest rates prove out that there is a three to fourfold greater benefit derived by going through private institutions than going through a government run investment board, taking the critical moneys that Canadians earn and further shortcircuiting the hopes of our young people to obtain a job in this country.
The concept of Canadians owning their own investment plan, owning their own pension plan, having title to it, is not something radical or unheard of. This concept is being applied around the world with outstanding success. Countries and governments are allowing their citizens to plan for their future, like the co-operatives are doing.
I am asking the government to allow Canadians to do the same thing instead of going back to a plan that does not work.
There is another dimension of the co-operatives bill. The co-operative management group had the foresight to implement measures with this bill that will protect it and allow it to survive in the long term. That seems like a reasonable thing for Canadians to expect from their government. That is continually what the government says it wants to do and yet we continue to be faced with too much government, too much intrusion in our lives, huge debt and huge interest rates, as I have spoken to.
We have the highest tax to GDP ratio of any of the G-7 countries, and the government comes back with 29 new spending initiatives on top of all that. Even as I speak it in this House I am overwhelmed again with the facts. Surely the light is going to come on one of these days.
Ten per cent off every paycheque of every Canadian, another government appointed board, the litany goes on and on. Behind all this, as we are celebrating a balanced budget finally wrestled to the ground, there are some facts to be looked at.
The $7.5 billion that went toward balancing the budget was actually a surplus paid into the unemployment insurance program. It is not really savings. It is intended for a totally different purpose but has gone off somewhere else. It is misleading Canadian people.
The youth unemployment rate is 16.5%. Today I was at a presentation for some gentlemen who were receiving the Order of Canada. I had the opportunity to talk to one senior scientist being recognized about his son who had recently graduated with an honours engineering degree and sought work in Canada.
We have all heard the story. Members know where I am going and where he went. He left Canada to get a real job, not a government job, because he could not get one here. This passionate Canadian who received the Order of Canada was hurt that his own son could not apply what he had learned in Canada. Brain drain to the max, and it is happening.
It is not more government we need. Canadians are burdened with government, taxes and all that comes with them. They are carrying a heavy load. Canadians are a stoic bunch. We tend not to be complainers. We tend to buck up and do it. We have a government that continues to take another brick and put it on top of the load. It continues to weigh us down one more brick at a time, one more brick at a time.
I do not want to depress everybody here although this is a depressing topic. I want to give Canadians some hope and to inspire members across the floor. There is a bright note in all this. The government actually listened to the co-operatives when they came forward and said what they needed. The government actually listened and put together the bill. That proves to me when the heart is willing and they really want to do it Liberals can listen. They allowed co-ops to plan for their future.
Along with the members of my party I am earnestly requesting the government to do the same for Canadians. It should deal with reality and the realities of the debt. It should allow Canadians to plan for the future and to keep the money they have earned. It is their money. Let us emphasize that. It should set us on the road to long term viability and allow for an environment where young people can hope for real employment in their own country.
Canadians do not want more tax and spend governments. They want a government that does a few key, important things well for less cost instead of a lot of things poorly at great expense. It is simple. That is what they are pleading for and demanding. It should stop crushing them with the weight of government adding bricks to the load.
The government has demonstrated that it can listen. It should now listen to Canadians, listen and deal with reality. We have waited too long. It is almost too late. It is a critical time. We have a window of opportunity today to make changes but it is only here today.
I encourage all members of the House to deal with the realities and capitalize on the window of opportunity. Whatever we do let us not miss it or future generations will judge us and indict us.
Francine Lalonde Bloc Mercier, QC
Mr. Speaker, may I congratulate you on your appointment.
We are here today to speak on the second reading of Bill C-5, Bill C-91 in the last Parliament. This is a bill which completely revises the federal legislation on co-operatives, at the request of the Canadian Council for Co-operatives and its francophone counterpart.
I would like to start by pointing out that only 50 co-operatives are registered under federal charter. A large number of these, however, are extremely important ones, which specialize in the production and distribution of grain. In Quebec, and I think it is important to point this out, there are only six federally chartered co-operatives, which are of different sizes.
Some people may wonder what we in Quebec have to say about this bill. The same thing, basically, as the representatives of other parts of Canada, because this bill, while affecting only a few co-operatives directly, can affect the entire Quebec co-operative movement indirectly.
In Quebec there is a Conseil québécois des co-opératives, which is part of the Conseil francophone and which, after some negotiations I would say, gave its support to the reform proposed by the Canadian Council. I must point out that, on Bill C-91, some of the demands by the Quebec council were accepted, while others were not. Nevertheless, the Conseil endorsed the bill on behalf of its entire membership.
Still, as the NDP member pointed out, while the bill does not directly affect co-operatives, it creates problems for a number of them—and I will try to explain why—in terms of its possible influence.
One may wonder why it was necessary to review, to modernize the federal legislation on co-operatives.
In Quebec, the provincial government just modernized the co-operatives act. The same thing is being done in Canada and it has also been done in recent years in other countries where co-ops are important institutions. Why? Because of the changes affecting markets, because of globalization and the stiff competition often faced by co-ops, particularly those that are key players.
In Quebec, these key players include the Nutrinor agri-food coop, which is fairly big but not as big as Agropur, the 53rd largest business in Quebec, and much smaller than La Co-opérative fédérée de Québec, which ranks 19th among the province's businesses.
Although the bill does not deal with financial coops, I take this opportunity to say that the Mouvement Desjardins would be number one in Quebec, with assets of $82 billion.
Businesses located in Quebec and governed by a federal charter must have some leeway to face new market conditions.
However, we can understand that in doing so co-operatives sometimes give rise to vigorous debate among their members, among the various types of co-operatives, because some people wonder whether, through better financing, by a turning profit in a co-operative fashion and selling shares on a market, that is, a sort of stock, whether they are not selling their soul. This debate goes on among the big co-operatives and between them and others operating in the service industry.
This should be pointed out, because the criticism I will make is in the context of full support for the bill. However, during committee work, we will express concerns, and move amendments on a number of specific points.
Co-operatives, I must point out, are vital in Quebec. When we look at Canada's history we see they are vital in western Canada as well and that their emergence showed the producers were taking control of their future rather than leave it to capitalist development, which, at the time, was largely unregulated. It is therefore a means of taking of control and the sign of an economy more collectively oriented and yet a strong market player.
In Quebec, this truth goes hand in hand with the fact that co-operatives have given Quebeckers control over a large part of their economy. When we put this in a historical context, it takes on proportions even broader than those in the west of Canada, because there is not only the context of social ownership, but also of Quebec ownership as opposed to foreign ownership. This explains the importance we give to having rules for the co-operative movement and consolidated legislation that underscores these principles.
There are various types of co-operatives. Some may be threatened by the new principles appearing in Bill C-5. In addition to grain, meat or agricultural production co-operatives, which bring producers together, there are also family investment co-operatives, student co-operatives—and there are many flourishing ones in Quebec as young people learn to build financial strength by using their purchasing power—and there are increasing numbers of co-operatives in new areas as well. There are some in the Montreal area, and no doubt elsewhere, in the new field of electronics; one will be known as “La Puce”, another will make it possible to offer Internet sites to all community organizations in the Montreal area with large servers.
It is therefore an area of high activity as far as sectors in the new economy are concerned, but the service sector is also represented, with housing and consumer co-operatives. Finally, I have not mentioned workers' co-operatives, which also operate on different principles.
So these various kinds of co-operative operate on co-operative principles having to do with the various aspects of pooling capital and, in the case of workers, pooling the activities of an enterprise supplying work. Therefore, even if the new principles in Bill C-5 do not affect them directly, they may be a cause of concern for these different kinds of co-operative that wish to continue to operate on a co-operative basis.
Having done a little research, I must point out that, in the various countries modernizing co-operative legislation, there are three approaches. The first is to go with values, but this poses a problem because it depends on the kind of co-operative involved. The second approach is to be pragmatic, but this raises concerns, and I am be inclined to think that Bill C-5 falls into this category. The third approach is systemic and tries to respect the inherent logic behind the various co-operative principles as implemented in co-operatives.
What are the stumbling blocks in Bill C-5? Once again, I repeat that, overall, the Bloc Quebecois and the Conseil québécois des co-opératives are in agreement with the bill as it stands. But a few problems remain.
First of all, the major stumbling block, and I will conclude with this, is that this bill, the Canada Co-operatives Act, is modelled on the Canada Business Corporations Act. This raises a structural problem, because a co-operative is community owned. A member of a co-operative does not own a share in the co-operative that he may sell as he wishes to whom he wishes. One cannot therefore say that one is going to buy a share in a co-operative and be a member of the co-operative. That is not how it works. If co-operatives are successful, it is because they let it be known that they intend to be consumer, producer or worker co-operatives, so they issue shares, which is why people then meet to achieve a common purpose stated in their bylaws. That is what co-operative officials' performance for instance is assessed against by their members.
Co-operative members hold shares that they can sell back to the cooperative and the co-operative only. They are not free to sell their shares to whomsoever they wish; it is up to the co-operative to decide who will be allowed to join. This is a far cry from a business corporation.
Since the entire legislation is modelled on the Canada Business Corporations Act, it is understandable that, even if an effort was made to adapt the spirit of the law, the corporations act sometimes shows through. As I said, I do realize that the intent was to update the Canada Cooperatives Act and enable co-operatives to secure new capital on the market, without interfering with the spirit of the legislation.
So, this is the first major flaw, as far as I could see—I perused this very thick bill and checked also with others and these are the problems we found—in fact, the Conseil québécois des co-opératives even had a question about this—under the charter, co-operatives are not required by law to disclose for what purpose they were established. This is a very serious problem because, for one thing, how can members be asked to use the services provided by their co-operative if these can change?
No doubt there is room for improvement. An improvement that could, one might say, be made fairly easily. The reasons for the refusal to do so remain to be seen.
The bill also contains some worrisome elements. For example clause 4, where once again the spirit is really that of a corporation, where control is defined as going to the person with control of 50% of the votes. In my opinion, one shared by all those I spoke to about this, this is incompatible with the co-operative spirit. This ia one example, but I will not go through the entire bill because it is a very long one.
Before Bill C-91, fears were expressed concerning the proposal made by the minister of the time, to the effect that co-operatives in Quebec, as in the other provinces, could choose to be registered under either a Quebec or a federal charter. This problem has been corrected in this bill, and a co-operative must, in order to be federally chartered, carry out business in more than one province and have offices in more than one.
This allows me to say that, given the rapidly changing markets, co-operatives can make acquisitions and find themselves in a position to be able to use the federal charter, hence the importance of taking the necessary time to study the wording.
The two clauses that are the most serious grounds for concern are, however, those which deal with reserve splitting during the lifetime of a co-operative. This is, one might say, hard to understand. It could open the door to all sorts of abuse. I know that the response will be that this bill is an enabling one. That means that the co-operatives are not obliged to use all of the clauses, except that the bill, or the act, cannot be a sort of self-serve affair, either, where one helps oneself to the elements one wants; it cannot be like that without a real danger of moving away from the co-operative spirit.
I know that the answer may be “But the co-operative movement itself will protect the co-operative spirit”. But it is hard to create the conditions that would allow that to be changed and then to say that it is up to the co-operative movement to do what has to be done.
Another important provision stipulates that only two thirds of the board will be made up of members, which could mean that 20%, if not more, of the board's membership would have investment shares. The danger would then be that decisions would not be made by members but by—shall we say—major investors.
Another provision of the bill seeks to counter such an effect, but it remains to be seen whether it is adequate. In fact, the principle underlying the whole notion of co-operatives is that members must have control over major decisions, and that co-operatives must know what their mandate is.
The committee has its work cut out. Hopefully, it will have the time required to do it.
We agree that the legislation must be updated. Quebec has done it. I imagine the other provinces have also done it or will do it. Other countries have done it. It is not an easy task, given the rapid changes occurring in the market and the very stiff competition major co-operatives must face. Still, we should not throw the baby out with the bath water.
When we hear those who can help us deal with the issue, we will have to make sure the bill does not weaken but strengthens the co-operative movement, which is so greatly needed in Quebec and in Canada.
I am convinced that co-operativess, as well as the Conseil québécois, as well as various professors—there are two chairs on co-operation in Montreal—will be pleased to provide advice to us, as they did when the Quebec government updated its legislation.
Canada Co-Operatives ActGovernment Orders
The Acting Speaker (Mr. McClelland)
It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Winnipeg North Centre, Health; the hon. member for Prince Albert, Aboriginal Affairs; the hon. member for Oakville, International Trade.
By agreement with the Conservative Party and the Reform Party they will switch their time slots, so we will recognize the hon. member for Surrey Central. We will then go to the Liberal side and then back to this side.
Gurmant Grewal Reform Surrey Central, BC
Mr. Speaker, I am proud to rise today on behalf of the constituents of Surrey Central to declare our support for Bill C-5, the government's proposed legislation is to replace the Canada Cooperative Associations Act.
The proposed legislation, to be known as the Canada co-operatives act, promises to be a helpful piece of legislation. All sides of the House of Commons in the 36th Parliament should be proud to support this bill.
I have some previous experience with co-operatives in Canada. I am a former director of the second largest credit union in Canada. The successful story of that credit union is a fine example of Canadian co-operatives. It was the very first credit union in Canada to be placed for public trading on the Toronto Stock Exchange.
Bill C-5 is a legislative proposal prompted by a request from the Canadian Cooperatives Association to the federal government to update the current legislation affecting co-operatives in Canada. The association made specific recommendations as to what it needed in the bill. Bill C-5 contains the recommendations which the industry requested.
Bill C-5 will modernize the legislation affecting co-operatives in Canada. This bill will provide the financing tools the sector needs to compete effectively. It will strengthen this vital component of the Canadian economy.
The definitions in the legislation affecting Canadian co-operatives will be broadened by Bill C-5 so that current policies, practices, values and principles in this sector of our economy are reflected in the legislation governing it.
For example, co-operatives will be allowed to access capital markets directly. Co-operatives will continue to be able to raise capital from their members. But also with the passing of Bill C-5 into law they will have access to the financial markets.
Co-operatives will be able to recruit directors from outside their membership to a maximum of 20% of the board of directors of a co-operative.
Bill C-5 also includes definitions of the duties, liabilities and responsibilities of directors. It addresses the governance of the board of directors. As a former co-operative director, I can assure the House that this section of the bill, in particular, is a very welcome measure. Under Bill C-5 the standards that apply to directors under the Canadian Business Corporations Act will now apply to co-operatives.
This bill also gives co-operatives access to the modern and flexible legislative tools such as the right to amalgamate, which is very important in this industry.
On behalf of the people I represent, I can declare that this is a rare occasion. My colleagues in the Reform Party, veterans of the previous Parliament, have assured me that it is a rare experience to find ourselves on the side of the House supporting a successful event accompanied by the lame side of the House, the government side.
Even the hon. member for Edmonton North, formerly the member for Beaver River, who is our most experienced team member admits that by working closely with Canadians and listening to the concerns of affected parties, the Liberals got it right this time just for a change.
I mention the deputy leader of the Reform Party because as a new member of Parliament representing a brand new constituency, she has taken the time to explain to me, a rookie MP from British Columbia, that she can remember very few times in the House when she could cast her vote in support of a Tory or Liberal government initiative. We rely on her sage wisdom. She has seen almost every flat footed, maniac antic of Tory and Liberal governments.
She has seen hundreds of millions of dollars go to Bombardier in Quebec. Bombardier always remembers the Tories or the Liberals at election time, of course, depending on which party is most likely to win.
She has seen Liberal and Tory cabinet ministers, MPs and party hacks brought up on all kinds of charges of bad behaviour, questionable conduct and things that extend to criminal acts and RCMP investigations. Surely, it must have been our deputy leader who coined the phrase, Liberal-Tory, same old story.
These days in question period she is trying to find out how the current Liberal government has rigged it so that 70% of the companies that get hundreds of millions of dollars in contracts from the Canadian International Development Agency are the same companies that give hundreds of thousands of dollars to the Liberal Party of Canada.
Imagine, companies that get CIDA contracts are 70 times more likely to have given money to the Liberal Party of Canada than any other company. A group of companies directed by former Liberal cabinet minister, Marc Lalonde, has donated a whopping $80,000 to the Liberals in the last two years and the payoff is $80 million in CIDA contracts. This situation is unacceptable and almost unbelievable.
John Harvard Liberal Charleswood—Assiniboine, MB
Madam Speaker, I have a civil question. What in the world do the remarks of the current speaker have to do with Bill C-5? I know that we take a very liberal approach around here and that our discipline, when it comes to enforcing the rules, is quite lax. I can understand that. I just cannot understand how his remarks are in any way relevant to Bill C-5.