Mr. Speaker, I will be splitting my time with the member from Essex.
I rise today on the occasion of second reading to the proposed legislation regarding the Canada co-operatives act. This bill marks another step in this government's effort to provide modern up to date framework laws that establish fair and efficient marketplace rules.
In the past we have passed legislation to modernize and streamline laws from bankruptcy, insolvency to copyright. These framework laws are an important part of Industry Canada's contribution to the government's jobs and growth agenda.
The bill before us deals with non-financial co-operatives. Financial co-ops or credit unions were reformed in the last parliament with the passage of the Co-operative Credit Associations Act.
The value of Canada's co-operatives can be found when we look at the kinds of principles they instil in their members and their communities, principles such as democratic control and concern for their members, principles such as community development and education for the young. For the better part of this century co-operatives have prospered in Canada as an alternative form to business enterprise.
In communities across Canada co-operatives have proven that it is possible to flourish in a market economy with principles that emphasize community participation, democratic equality and co-operation.
That being said, it is true that even though co-ops are a unique and distinctive form of business organization they nevertheless compete in a market economy against business corporations. For example, retail co-operatives compete against the Canadian Tires, the Loblaws, the Wal-Marts, the Price Clubs and so on.
Survival in this marketplace depends on innovation and flexibility. It depends on getting the best advice from board members who are knowledgeable of the business world. In this environment co-operatives have been competing for years with their hands tied behind their backs because the marketplace framework laws governing these organizations restrict their freedom to make some choices needed to respond to changing demands, to changing competition and to changing markets.
These co-operative associations work closely with their members. They discuss their draft model act within the co-operative movement. When they have a draft bill ready they approach the Minister of Agriculture and Agri-Food, responsible for co-operatives, and the Minister of Industry, responsible for marketplace framework laws.
This is a good way of preparing legislation, working co-operatively with organizations and the government in partnership to make things happen. I hope we see more of these examples in the future.
Industry Canada had to assure itself that the draft legislation met the requirements of the contemporary marketplace framework laws. The bill before us governs co-operatives that are incorporated federally. Most non-financial co-operatives are incorporated in the province in which they do business. This means the bill before us today affects only a small portion of non-financial co-operatives in Canada. But the relatively small number of businesses affected directly by this bill should not detract from the importance of this bill.
The bill creates a Canada co-operatives act that provides co-operatives with the same flexibility now enjoyed by federally incorporated businesses. However, it still maintains the key co-operative principles essential in any co-operative legislation. It leaves the choice to adopt the new business oriented measures in the hands of the membership, the members.
To help co-operatives compete more effectively in the marketplace, the bill provides more flexibility to recruit directors from outside the membership. At least two-thirds of directors of the co-operative have to be members or representatives of those members of co-operatives, corporations or entities. One-third of the board can be from outside. If the co-op issues investment shares, members will decide on that. In each case it is the members who decide.
In other words, this bill enables the co-operatives to draw on the expertise of those who can help guide the co-operative whether or not they are members of the co-operative themselves. At the same time, however, the members themselves continue to make the fundamental decisions that set the rules for the co-op. These include the articles of incorporation, the bylaws, the right to make proposals at any annual meeting and the ability to request special meetings of the members.
In short, this bill gives co-operatives the best of both worlds. It continues to promote the distinctive features of co-operatives that have made them such an important force in Canada's economy. At the same it provides a modern, flexible, business type set of tools to allow co-ops to compete against other forms of business on a level playing field. I hope hon. members will join me in supporting this bill.