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.