Debates of Dec. 9th, 1997

Ship Building

[John Manley, Liberal, Minister of Industry]

Mr. Speaker, I find myself confused. I thought at first the question was for the Minister of Industry.

We have looked very carefully at all the suggestions but I have yet to consult my colleagues on them. I point out to the hon. member, as I have done privately as well, that the tax breaks constitute a subsidy, that special tax rules constitute a form of subsidy, and that we are endeavouring in each industrial sector to create sectors that are competitive and therefore able to win in international markets without subsidies.

Canada Co-Operatives Act

[John Manley, Liberal, Minister of Industry]

moved that Bill C-5, an act respecting co-operatives, be read the third time and passed.

[Walt Lastewka, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, it is a pleasure for me to speak to third reading of Bill C-5, respecting the Canada Co-operatives Act.

The House will recall that second reading debate was on the principles of the bill. I use the term debate very loosely because, as it turned out, every party had something good to say about Bill C-5 and it won the support of both sides of the House.

[An hon. member]

Especially the NDP.

[Walt Lastewka, Liberal, St. Catharines, ON]

My colleague says “Especially the NDP”. I am glad he is with us.

This support was continued in committee. I thank members of the Standing Committee on Industry for their work in preparing the bill for third reading.

The bill has three overall objectives. The first is to revitalize corporate governance rules in relation to co-operatives. It does this by providing access to modern corporate tools that other businesses already have through framework legislation such as the Canada Business Corporations Act, the Bank Act or the Co-operative Credit Associations Act which governs financial co-ops.

Bill C-5 enables co-operatives to incorporate as a right. This eliminates ministerial discretion as well as the current complex procedures that now govern incorporation of co-ops. It reduces the cost of incorporation for both co-operatives and the government. It places co-operatives and business corporations on the same level playing field.

The bill gives co-operatives the capacity, rights, powers and privileges of a natural person similar to what business corporations now have. Co-operatives no longer have to specify their fundamental purpose in their articles or to abide by the limited list of powers set out in the current act. This helps co-operatives compete fairly. It simplifies incorporation procedures and clarifies the boundaries within which a co-operative may act.

The bill before us also changes the rules concerning the nomination and the election of directors as well as the duties and liabilities of those directors. For example, the existing act requires a fixed number of directors and specifies there may be no less than three. Bill C-5 gives co-operatives the right to establish the number of directors in their articles although it still specifies there may be no less than three.

The current act requires that a director must be a member of the co-operative. The bill requires that two-thirds of directors must be representatives of the members. This allows more flexibility by the co-operatives to make their own decisions within boundaries.

In today's competitive economy it is important for co-operatives to recruit the best possible people, to serve directors and to help guide co-operatives. These changes were requested by the co-operative sector to help it attract the expertise it required to the board of directors.

Bill C-5 makes the statutory duties and the fiduciary duties of directors of co-operatives consistent with the statutory duties of directors found in other corporate legislation. It provides a due diligence defence for directors in situations where they may be personally liable.

The second overall objective of the bill is to provide co-operatives with new financing opportunities, something the co-operatives were restricted in, in the past.

The co-operatives will be able to compete in capital markets with entities that already have access to equity investment. Under the bill membership shares can be issued with or without par value. This is a change from the existing act where membership shares can only be issued at par.

The bill allows flexibility so co-operatives can choose to maintain traditional co-operative practices such as par value membership shares or to realize a gain through no par value membership shares. This allows the flexibility for co-operatives to decide how they want to operate within the boundaries.

Bill C-5 gives co-ops the ability to issue investment shares to the public. Investment shareholders are given rights and protections similar to those provided under the Canada Business Corporations Act. This gives co-operatives the flexibility they need to raise capital and puts them on a level playing field with other business entities.

For example, although incorporated in the province of Saskatchewan, the Saskatchewan Wheat Pool is now listed on the Toronto Stock Exchange. I remind the House that SaskPool shares have been available for over a year now. The equity investment the wheat pool has acquired in capital markets has enabled it to embark on a very aggressive and visionary expansion plan.

A third overall objective of Bill C-5 is to strengthen the features that define and distinguish co-operatives. We do not seek to change the principles that have provided the foundation for the co-op movement in Canada. Rather we want to protect the differences between co-ops and business corporations.

Under Bill C-5 co-operatives must satisfy the test of being organized, operated and administered on a co-operative basis before they can incorporate. This incorporation test protects the uniqueness of the co-operative enterprise in Canada.

One of the most fundamental principles of a co-op is that its members control its decisions. Under the bill before us members continue to make the bylaws as they do in the current act. This is different from the Canada Business Corporations Act where directors make the bylaws.

Members have considerable power to restrict the power of directors. They have remedies in cases of acts of corporate oppression and a right of dissent in the face of fundamental changes to the structure of the co-operative. Members have rights to call special meetings and they have rights to make proposals at the meetings.

Let me summarize by saying that three objectives guide the bill before us. First, we want to revitalize corporate governance rules. Second, we want to provide access to new ways for co-ops to raise financing. Third, we want to do all this without compromising the principles of co-operatives. Indeed we want to strengthen their distinctive features.

Bill C-5 strikes a balance among all three of these objectives. It was originally designed by the co-op sector. It has seen a number of improvements, both in consultation with other stakeholders and in committee.

The co-operation of members of the standing committee in terms of hearing from stakeholders, especially stakeholders who helped in designing the bill, and of helping us to proceed with the bill in committee is very important. It preserves the intent and the fundamental foundation of co-ops, yet allows them to participate in the marketplace on a level playing field.

The bill deserves the support of the House. I hope this afternoon we will continue to debate Bill C-5 and to support it to completion.

[Eric C. Lowther, Reform, Calgary Centre, AB]

Mr. Speaker, I appreciate the opportunity to speak again to Bill C-5, the Canada Co-operatives Act.

As has been mentioned by the hon. member across the way, I concur there was a great deal of co-operation both in committee and with the co-operatives in preparing the bill. The legislation was prompted by a request from the Canadian Co-Operatives Association to the government to consider specific recommendations which would update current legislative provisions for co-operatives.

What has been an encouraging note for me in this whole process, being relatively a new member of the House, is that I was able to observe an amount of responsiveness on the part of the government to the requests of those involved in the co-operatives industry. Certainly the co-operatives themselves demonstrated some responsiveness with regard to the bill.

What I witnessed there was that the co-operative structure is built around a membership which holds the management of the co-operatives accountable. It was instructive to me and perhaps it will be to this House. The system they use there, where membership puts in place the management and then in turn holds them accountable, is something I would like to speak to a little bit here this afternoon.

The co-operative management and its members realized that their livelihood was at risk if they did not make some changes to how they raise capital and how they are able to compete against other entities in the markets in which they are involved.

Therefore, they moved ahead to seek this change to the legislation which would allow them access to capital, would allow them to change their corporate structure through amalgamation and restructuring for greater efficiencies and for the long term investment community to get involved in co-operatives as well.

It was this foresight that was driven basically by the membership and through the management that opened the door to this legislation.

The encouraging part in all of this is that the change was really driven through accountability back to the membership of the co-ops.

I think what is instructive here for us today is that in many ways there is a parallel that can be drawn between this process and what is going on in Canada today. The people of Canada are in a sense the membership that we report to.

It is interesting that the membership has been calling out for some changes here in this House and in the legislative structure that Canadians have to live within so that they too can survive for the long term and plan effectively for their future.

I am not sure that our management team here, particularly on the other side, is hearing Canadians on some of these critical issues. What I want to refer to briefly, and it ties back to the co-operators bill throughout this talk, is the fact that right now we are facing 16% youth unemployment in Canada. This creates challenges for our young people. As well the current increases to the CPP seem to almost add to the challenge that our young people have in obtaining jobs with these high payroll taxes.

We are already taxed, as we have heard in this House many times, at the highest level in the G-7 countries. Even with all of this tax, the increases in tax, the new payroll taxes and high unemployment, we still have a debt of $600 billion. We have heard that the interest is $43 billion a year.

Just taking more taxes has not kept us out of debt. In fact, we have gone into debt even as taxes have increased. It is not surprising that the membership, the people of Canada, is saying that it is time to make some management changes and change the way that the legislation allows them to plan for their future.

We have had a lengthy discussion about some of the proposals we put on the plate for changes to CPP which to date have not been heard by the party on the other side.

We listened intently to the throne speech, hoping to see what Canadians have been calling for, that is paying down the debt and tax relief.

What we saw primarily was 29 new spending initiatives on the part of this government. No, that is not what the people of Canada are asking for.

I recently commissioned a survey in my riding so that I could stay in touch with my membership or my constituents. It is consistent with what we are finding in some national polling that has been done. I will refer to it briefly.

Less than 1% of the respondents to a survey in my constituency felt that the government should embark on any kind of increased spending program. It was a very small amount. However, 78% of the respondents surveyed want debt retirement as a priority of the government that finds itself in a surplus situation.

Debt retirement was very much number one. We see this in some of the other national surveys that have come out. The remaining respondents, about 22%, wanted tax relief after debt retirement. My constituents do not feel that allowing the government to spend, spend, spend is the choice that should be made at this time. I encourage the finance minister to resist any pressures from within his caucus and party to move to an increased spending program.

My call is consistent with what we have recently heard from the premiers who came to Ottawa, to strongly encourage him to resist the Liberal temptation to fix all our problems with more government expenditure. We have had enough of that. It is not the way to solve many of these problems.

In fact, my constituents told me in the recent survey that they are diametrically opposed to the path which this government is intent on following. Eighty-two percent of my respondents, and I think this is consistent with many Canadians across the nation, felt perfectly confident that they can manage and invest their retirement funds better than the CPP investment board and supported the idea of a super RRSP which they would own and which is insulated from government manipulation.

The people in my riding are making the connection that big government results in big tax bills. Given that connection, they do not want big government.

Consistent with this we are finding that Canadians are coming to the realization, as did the members of the co-op, that in order to survive and be strong for the long term, in order to have the best possible opportunities for all Canadians as they enter into the 21st century, there has been enough of the tax and spend approach of the previous two governments. They are saying that taking more from Canadians and giving it to the government and the government taking its administrative overhead portion and then deciding who should get back the revenue is not the way to solve many of the issues facing Canada today.

They are saying that it is time for changes. The priority is, first, pay down the debt and get it under control because our interest charges on that debt are $43 billion a year. Some studies we have done tell us that interest for one year alone would pay for 4 million young people to go through a four year university degree program.

Another idea that helps us to understand how much the debt is costing at $43 billion a year is that it is enough money to fund the operation of every hospital in Canada for two years. However, at this time we are trying to sustain a health care system that is at risk.

This tax and spend approach that the co-op membership realized is the same as Canadians are realizing, that it is putting at risk our social programs. It is putting at risk the care and social security programs that we could have for less fortunate Canadians. It is putting at risk much of what we hold dear as Canadians.

In summary, there is a hopeful note in all of this, particularly with this bill. I admit that the updated Canada Cooperatives Act is a good example of how government can respond to the requirements of the private sector. It gives me some hope that it is still possible for government to respond to the voices of individual Canadians who are calling for some common sense in regard to the fiscal management issues of this nation. The Canada Cooperatives Act succeeds in modernizing Canada's co-operative movement by providing it with the financial tools it requires to compete effectively in the marketplace and remain a vital component of the Canadian economy; in many ways exactly what Canadians are asking for. At the same time, the legislation respects and retains the traditions and the integrity of the co-operative movement in Canada.

I think it is significant that the hon. member across the way gave some of the accolades to the members of the industry who participated so fully in the formulation of this legislation. I believe that is the key.

It is when we hear the people who are going to be affected by the legislation when we shape it, the likelihood of us hitting the target is much more enhanced. On that note I feel that this particular bill is one that I will remember as a positive illustration of how our Canadian government can work for the benefit of both industry and hopefully one day for the citizens of Canada.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, I am pleased to state, on behalf of the Bloc Quebecois, on this third reading that we too will be supporting this bill, which modernizes the Canada Co-operatives Act.

It is important to point out that Quebec has a very strong co-operative movement. Of the 2,973 co-operatives in Quebec, according to the most recent statistics of the Secrétariat aux coopératives, only six are covered by the Canadian legislation. It is important to point this out right at the start, in order to explain that, regardless of certain reservations I and the co-operatives of Quebec may have had at the start, after the work in committee, and because there were negotiations held in complete equality between the Canadian Federation of Co-operatives and the Conseil québécois des coopératives, I am pleased to state that we will be fully supporting this bill, setting aside those reservations and concerns.

Obviously, I need to explain a bit about what I mean when I refer to reservations and concerns. It must be stated that the Canadian Federation of Co-operatives, in creating this process, a process focussed on calling for new legislation from the federal government, has proceeded democratically through consultation, and made its request. The request was granted. The Federation consulted the Quebec co-operatives and finally came to agree with the bill drafted by the government legal specialists.

What the Canadian Co-operative Association was doing was to modernize the Canada Co-operative Act, and this must be said, as others have before me: co-operatives in this world we are living in, especially the big ones, have to compete in the market with the big businesses and multinationals and find themselves obliged to have capital it was hard for them to acquire under previous Canadian legislation, and this was also true of previous Quebec legislation.

The Canadian Co-operative Association wanted its members to have, and some of my colleagues will tell you about this, the means to ensure that this different form of business, a co-operative business, something that is eminently desirable in our society, could survive in a highly competitive environment.

I would like to use third reading of this bill to draw attention to a kerfuffle that occurred when the committee submitted its report to the House. The kerfuffle arose because the government proposed an amendment, which apparently deprived members of the power to permanently replace resigning members of boards of directors. I say apparently because government members noted, after I spoke, that the law clerks had made an error and that, without this amendment, two sentences in the bill would have been contradictory.

I want to point it out, since, because examination in committee was on a consensual basis, I felt obliged at third reading to oppose an amendment by the government that had not been debated, that was not submitted to us and that ran totally counter to the spirit of co-operation. I did my work, but in the end it enabled us to see that the legislation did contain another provision permitting the members to retain their power.

I will now move on to the next stage in my speech, which is to take this opportunity to stress the importance in Quebec of the co-operative movement. It is interesting to note that I am doing so based on the document put together by the Cooperatives Secretariat, which comes under federal jurisdiction. It contains statistics on all Canadian cooperatives in Quebec and the other provinces.

It is very interesting to see that, in Quebec, there are 2,973 associations, including financial cooperatives, the Desjardins cooperatives as we call them at home. In all of Canada, there are 7,870 cooperatives. This means that 38% of all Canadian cooperatives are in Quebec. In terms of membership, there are 6,210,000 coop members in Quebec out of 14 million for Canada as a whole. Here again, Quebec's share exceeds 42%, even though, I repeat, less than 25% of the Canadian population now lives in Quebec.

Cooperatives in Quebec report sales of $9 billion, which represents slightly more than 25% of the Canadian total. As we know, in western Canada, there are large cooperatives, especially those involved in the production and sale of wheat. In terms of assets, Quebec accounts for $54 billion or 33%, compared to $156 billion in the rest of Canada. That too is a very large amount.

In fact, I think it is fair to say—and my hon. colleagues agreed with me—that Quebec is fertile ground for cooperatives. Naturally, a major player is the Mouvement Desjardins, the Desjardins financial cooperative movement, but it is not the only one. There are also other types of cooperatives in Quebec as in the other provinces. It is important to note this. We seldom talk about this different yet important aspect of our economy, so let us take this opportunity to do so.

There are 204 consumer cooperatives in Quebec, 76 purchasing cooperatives, 48 marketing cooperatives, 5 fishermen's cooperatives, 96 producers' cooperatives, 1,221 service cooperatives, 1,318 caisses populaires and a few others. Some of these coops have been operating for a long time.

It is important—I would need more time than I have today at the rate at which things are going today—to at least mention that the cooperative movement was instrumental in ensuring Quebec's economic development, especially at a time when the economy was dominated by the United States, Canada and the United Kingdom.

In fact, when we look at today's major Quebec-owned businesses, we notice that two public institutions were instrumental in developing a mixed economy in our province, that is a capitalistic and a co-operative economy. I am referring to the Caisse de dépôt et placement, and to the co-operatives. Among Quebec's major businesses, in addition to financial institutions, we find the Fédérée, which employs 5,000 people, and which plays a key role in food production, consumption and processing. There is also Natrel and others. I will not name them all, but there are quite a few.

I want to say a word about some co-operatives that we seldom talk about. Those found on the island of Montreal are representative. There are co-ops in the education, housing and agri-food sectors. There are also caisses populaires of a different type, such as the Coopérative de consommation des employés d'Hydro-Québec, and the new Coopérative des services télématiques Centre René-Lévesque. There is a co-op that offers Internet servers to all social and community organizations in the Montreal region.

There is a type of co-op that does not get enough publicity, that does not get enough support. Yet, this type of co-op helps “create jobs” in a world where unemployment is rampant, including for professionals and people who have great qualifications. I am referring to workers' co-operatives. All the other co-operatives that I mentioned are co-ops whose members get together to give themselves services, including housing and consumer services, to transform products which they produce, or to have access to an Internet server. However, workers' co-ops are unusual in that their members get together to create work for themselves.

This type of co-op is more difficult to establish, because while its members must act like entrepreneurs and make their businesses succeed by producing, by selling, by developing a market and by being competitive, they are also employees governed by a collective form of management that is different from that of other businesses, including co-ops in which members are the employers but not the employees.

When this type of co-operative is implemented, it allows businesses to get through severe financial difficulties. We are familiar with some in Montreal, and elsewhere in the province, who have survived the depression and increased the number of jobs, major firms such as the printing co-operative Harpel. These co-operatives are a testimony to the fact that it is possible, even in this day and age, to develop a business that is both competitive and profitable, allowing its employees to have a life, allowing them to experience other kinds of labour relations and of management, and allowing the workers who have joined together to create jobs for themselves.

I repeat that we in the Block support this Bill C-5, an Act respecting co-operatives. After discussions between equals, the Conseil québécois des coopératives agreed to support this bill, which affects only six co-operatives in Quebec but may, if they come to operate in several provinces, apply to other co-operatives currently operating only in Quebec.

We are therefore pleased to support this bill, even if the co-operators who called for it know that there are risks in allowing members in co-operatives who are in fact not members but holders of capital, who are providing assistance to the co-operative in competing with other businesses, while at the same time helping themselves through the profits they can earn as a result.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I am pleased to rise in this House as a New Democratic Party member to speak at third reading of Bill C-5, an act respecting co-operatives. I am also pleased to see that the legislation enjoys the support of all five parties in the House of Commons, reflecting perhaps that the co-operative spirit is becoming a pan-Canadian value.

I say that because in Saskatchewan the co-operative spirit has been alive and well for a number of generations. As a matter of fact, we in Saskatchewan view the world in a very clear way when it comes to using economic utensils to develop economies and to keep people working.

It is the view of the New Democratic Party that our economy is composed of three engines. There is the engine of government which generates and creates economic activity to a certain extent. There is a second engine of the economy, the private sector, which generates and creates economic activity in jobs and revenues. In Saskatchewan in particular but across this country, the NDP believes, a third engine of economic activity in our economy is the co-operative movement. We feel the co-op approach to life is a very important approach and one that basically allows people to do things collectively in a co-operative way that they cannot do individually.

We feel very strongly that Bill C-5 addresses some of the challenges which the co-op movement is now facing, the modernization of co-ops, the modernization of the economy, the more competitive nature of corporations and businesses competing with our co-ops around the country.

The co-op movement is very important when it comes to world trade. We have been involved in very significant things with respect to economic development in this country through co-ops that we normally would not do. The co-op movement has been very significant in the international and global economy. We did not call it the globalization of our economy, but the corporations that were involved and structured as co-ops, like the Saskatchewan Wheat Pool, were actually trading in the international marketplace for decades before the terms globalization and global economy became the catch words of those who wish to do business all over the world.

I am very pleased this afternoon to acknowledge a neighbour of mine in the gallery. He lives on my street. He is visiting Ottawa on business. I am very pleased to see him here because not very often do we get to speak directly to some of our constituents. I am very pleased that he is here. I am not sure if he is impressed or not, but we will see what happens during the course of my remarks.

This co-op bill is one which I think has gone through a very comprehensive process in terms of looking at how we can modernize co-ops, how we can assist them in meeting some of these very significant economic global challenges.

I am pleased to note the co-operative manner in which the needs of the Manitoba and Alberta pools were negotiated with other members of the co-op movement so that a jointly recommended amendment could be proposed in the industry committee at clause by clause and it was basically approved. In addition, there were a further five technical amendments at committee and two more technical amendments at report stage in the House which all parties supported.

Before getting into more of those items, I want to talk very briefly about another example of how important co-ops were in Saskatchewan in particular. That is my example because I represent a constituency in Saskatchewan.

There was a problem a number of years ago with gas pricing and oil pricing and availability of energy in our province. The large oil companies, Imperial Oil and Shell, had the refineries and they were gouging our farmers. They could not get their crops in the fields and seeded because of the high prices. There was a huge hurdle to farming economically in our province.

In the 1940s a number of people got together and put together about $40,000. They established Consumers Co-operative Refineries Limited. In essence using resources that they collected in their own neighbourhoods and communities in the province of Saskatchewan, they built from scratch the Consumers Co-operative Refineries which still exists today.

As a matter of fact, the refinery is valued at somewhere around $1 billion Canadian. It refines about 50,000 barrels of oil on a daily basis. It not only has a refining capacity, but it has an upgrading capacity as well. It can take the very thick crude and upgrade it through a process, and then refine it in a refinery which is right next to it and make all the things that are made from a barrel of oil. Many people do not realize that 10,000 different products can be made from a barrel of oil.

What I am getting at is that the people of Saskatchewan were confronted with the problem of price gouging. They developed a technology among themselves. They collected their own resources and built a refinery to the point now where it is worth a significant amount to our economy. It employs about 250 people annually.

The president of the union is the spouse of my constituency assistant. His name is Bob Johnson. Bob has been president before, but remains president of the union. With his colleagues at the co-op refinery, he contributes significantly to the economy of our province. They are able to do this as a result of significantly strong co-operative principles. I remind members that those principles are based on the fact that individuals can do collectively what they cannot do individually. This is an example that has been very significant in our province.

Another example I want to share with my colleagues in the House of Commons and other people who are watching is that the co-op movement is not dying. It is actually a very strong, vibrant, growing movement not only in Canada but in other parts of the world.

As a matter of fact, I was visiting one of the 37 communities in my constituency, the community of Strasbourg just last spring. At a public meeting there were a number of speakers. One of the speakers was from the co-op college at the University of Saskatchewan in Saskatoon. There was a slide show. It was about the new economic approach in the land of free enterprise, the United States of America, to solve some of the unemployment problems, to solve some of the dying rural community problems in the United States of America.

The slide show was about the co-op movement that is a “new” economic utensil the Americans are now discovering and using quite dramatically in a very positive way. The slide show talked about a midwestern community with a population of about 6,000. It had had a very significant decline in its population over the years. It was in the midwest in an agricultural community. Young people were being educated and then were moving to other parts of the United States and finding jobs and earning a living.

As a group of people who got together as a community they asked, how do we stop this drain of our young people? How do we stop the drain of jobs from our community? How do we enhance and prop up and get our rural economy back on its feet? Somebody had the bright idea of forming a co-op.

They formed a co-op and started with a bison farm. They started raising bisons in a co-operative way. Then they expanded to hog production, to grain and to a furniture factory. They started a co-op for house building and contracting and also established a buying co-op where they could buy materials at contractor prices.

With respect to Bill C-5, this is a very applicable example. This shows that Bill C-5 which we are talking about today is modernizing the approach and the economic tools that co-ops can use similar to those in the midwestern American city I am talking about where they discovered this new movement of co-operation.

Do you know what that community is doing now? They are hiring the children of the founders of this co-op for jobs which pay very significantly. They are managing these hog production plants. They are managing the grain and farm production operations. They are managing the furniture factory and other factories they have established on a co-operative basis.

Of course at the slide presentation in Strasbourg, Saskatchewan, everybody at the public meeting was saying, “We have been members of co-ops for 50 years. That is exactly what we have been doing and that is how we have been able to sustain a reasonable quality of life in our community”. I might say that Strasbourg is a very significant community in my constituency.

As my party's spokesperson for co-ops I have been contacted by a number of co-op members in particular on this bill, many of whom support the bill but a few of them do not. Let me take a few minutes now to address some of their concerns which were brought to my attention.

In the first place, some were merely the result of some misinformation, for example, that the bill applied to all co-ops or that it compelled all co-ops to raise investment equity. In fact as we know, the bill applies to only about 51 federally chartered non-financial co-ops as did its 1970 predecessor. It does not compel any of them to pursue any financing option their members have not already approved. It simply enables them to choose from a few more options.

It is also true that a few people philosophically do not believe a co-op should raise investment capital. It is a deeply held conviction of a minority of people who are also uncomfortable with changes at the Saskatchewan Wheat Pool. Of course, for members who might recall this, the Saskatchewan Wheat Pool is provincially chartered so that when the Saskatchewan Wheat Pool wanted to expand its economic base to pursue value added processing of its primary production of grain and hogs and cattle and other things, they decided to expand in a number of areas.

The members of the co-op who control the co-op decided that they would go to the markets. They made an amendment to provincial legislation, as we are doing with this Bill C-5 for other co-ops, to enable them to go to the market for more capital. I might add that since this was done the shares of Sask Wheat Pool have increased in value. The members of the wheat pool who did not buy shares still control the company. The wheat pool is actually doing a very good job.

As a matter of fact just yesterday it was announced that the Saskatchewan Wheat Pool which is the principal shareholder of Fletcher Meats has now bought Harvest Meats, a meat processing factory in Yorkton, Saskatchewan. It employs a number of people and is a very successful plant.

That adds value to the products which members of the wheat pool and other farmers in Saskatchewan believe are important to our economy. It adds value in the sense that it provides jobs to people living in Saskatchewan. It also provides more profits for those who are members of the pool from which patronage can be shared.

Patronage of course in a co-op is different than patronage in the Government of Canada. Patronage in the Government of Canada is where the government of the day appoints people of its liking to highly paid positions. In many cases they are not accountable but they perform functions in the country. Patronage in a co-op is when a member supports the co-op and purchases goods from the co-op. They patronize the co-op and earn some value from doing that. When they leave the co-op they have an asset which is theirs as a result of their patronizing their co-op.

With respect to the wheat pool, I believe that members of the large co-ops, the ones which are federally charted, since they carry out business in more than one province, need to have some choices available to them to take on the multinationals which are increasingly taking them on.

I was speaking with the minister of agriculture for Saskatchewan, Eric Upshall, the other day about this debate. He pointed out that the wheat pool has been responsible for millions of dollars of investment coming into our province in the last few years which as a result has created many jobs. He told me about a number of the details, one of which I shared with the House a few moments ago.

At the same time the pool's market has been targeted by the American multinational Archer-Daniels-Midland. The pool has needed to finance the upgrading of a lot of its capital to meet this challenge, at the very time when a large number of farmers are retiring and withdrawing their capital from the pools.

I also believe the co-op movement has demonstrated that the majority of its members support having this option available to them under Bill C-5.

Evidence was presented before the industry committee about the extent of the consultation process undertaken in the co-op sector prior to the tabling of a model bill with the government.

A first round of consultations took place at the grassroots level about what changes were needed in the bill. This resulted in the development of a first position, which was then sent back for a second round of consultations, all within the co-op movement. After the co-ops and the federal Department of Industry and the co-op secretariat at the Department of Agriculture agreed to a draft piece of legislation, industry and the co-op secretariat then conducted a round of national consultation hearings themselves.

The resulting legislation is thus the product of consultation, consensus, constructive engagements and co-operation. Such a process does not guarantee unanimity, but I believe it reflects a sincerely genuine effort to obtain the input and support of as many co-op members as possible.

The bill also greatly strengthens the rights of co-op members. I am sure that co-op members of all points of view will be making use of these rights if their co-ops debate such new approaches and agree to pursue them under Bill C-5.

In summary, on behalf of the New Democratic Party, we would like to see this bill move forward as quickly as possible. We applaud the efforts of co-ops across the country to bring forward proposals to modernize their governing legislation and to meet the challenge of taking on the multinationals which are increasingly moving into Canadian markets.

We support a vibrant and thriving co-op movement and believe this bill will assist in enhancing that goal.

[Walt Lastewka, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I have a very short question for the hon. member for Regina—Lumsden—Lake Centre. I appreciated his input in the committee with respect to the importance of co-ops. He helped us to understand co-ops.

I want to ensure that although we are opening up the boundaries in which co-ops can participate, we will still maintain the principles of the co-ops as he has many times described them to me.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I thank the parliamentary secretary for his question.

In my view the bill does not really affect the principles of co-ops, the principle of open membership or the principle of one member one vote. Members of the co-op will still control the direction of their particular co-op, even though they may take advantage of these economic utensils.

The principle of doing collectively what cannot be done individually will always be around in a co-op. The bill will assist co-ops on the larger scale in dealing with competition from international corporations and in expanding their co-ops in a vertically integrated way as other multinationals have done in the past.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, it is with pleasure that I once again speak to Bill C-5, which I have debated in the House of Commons twice before.

I will repeat one comment that I started off with the last time. When I was elected to the House of Commons I told myself and my constituents that when good legislation was put forward by the government I would congratulate the government on it and not simply be destructive in my criticism but be constructive.

I say to the government and to the Minister of Industry that this is a very good piece of legislation. It allows co-operatives to go forward into the 21st century with the ability to make necessary changes to be competitive not only within themselves but with other industries.

Brandon—Souris is the home of almost everything. The House has been privy to my rantings with respect to all the good things that have happened in my community. We are also the home of a number of very successful co-operatives. Members may be aware that the co-operative movement came to us from western Canada. Co-operatives involved people organizing around the common goal, usually not for profit but for the economic benefit of all their members.

Co-operatives promote grassroots development, led by people rather than by government. They are a reflection of local people taking the initiative to understand the problems they face and to develop solutions. Co-operatives find their roots in community based enterprise around the world, and certainly in Canada.

The principles of the 1970 Canada Co-operatives Association Act were based on provincial legislation dating back to the early 20th century. While the provinces have been updating their co-operative legislation over the years, there have been no changes to modernize the framework of the federal act since its inception.

As a result, in March 1996 the Canadian Co-operatives Association and its francophone counterpart jointly submitted recommendations to modernize the federal act. The proposals were the product of consultations with both their memberships. As previously mentioned, the most notable feature was the changes that most closely aligned the Canadian Co-operatives Association Act with the Canada Business Corporations Act. Both associations agreed these changes enable co-operatives to modernize their operations to better compete in the domestic and international markets on a level playing field.

Bill C-5 deals with a number of very innovative changes to that legislation. The legislation came out of consultations, consensus and the co-operation of an organization that brought forward to government, in a very long process over five years, what it felt was necessary for the co-operative movement to continue into the 21st century. As we are well aware, a number of changes are required to compete in this globalized world in which we now live. It was done, as I said, in full co-operation with the membership.

One issue they dealt with was the form of capitalization a co-operative could now do. The co-operative has a larger scope in adopting the structure between traditional and open market approaches, providing greater flexibility in establishing methods for members to finance their co-operatives.

The bill attempts to balance the rights of members with those of corporate directors, which is very important.

Bill C-5 makes changes to the rules governing membership by removing all restrictions. The rules are now solely determined by the co-operative and are laid out in its charter bylaws. This means membership would be open to all, provided current members approve.

Bill C-5 makes changes to the rules governing the issuing of shares. The conditions of issuing membership shares are set out in the incorporation charter.

Bill C-5 will permit co-operatives with share capital to issue investment shares to their members and to the public, provided the members have agreed to do so and have set out the rules in the charter bylaws.

Traditionally co-ops have looked only to their members to finance their operations. This means that co-operatives can now become more competitive with their capitalization. I speak of Saskatchewan Wheat Pool, a very prime example of what a very progressive co-operative can do in the competitive market.

The proposed changes equip the industry with the tools necessary for raising badly needed capital investment. It is a response, for instance, to declining membership investment, resulting in co-ops not being able to upgrade existing expensive and outdated infrastructure. This policy follows changes adopted by some of the provinces.

I point out that Bill C-5 is not a controversial bill, as I said earlier. It was done with co-operation and with consultation. We in the Progressive Conservative Party will be supporting the bill.

Agreement between all parties on the bill was slow as it took over as five year period to develop, but I believe they achieved a reasonable compromise with minor amendments at report stage. Overall the bill is a positive step in bringing co-operatives into the 21st century by making them more flexible, efficient and competitive.

The changes in Bill C-5 are wide scale adjustments but I am confident overall co-op membership, some 4.5 million Canadians, will benefit.

That being said, this gives us a very good model by which to develop legislation: listen to the people, listen to the industry that is being affected and put into legislation the necessary changes that allow it to adapt.

I will make an analogy between that and another piece of legislation brought to the floor of the House recently in which I have been involved. I will make a comparison between Bill C-5, which I have already said is an excellent model that has worked extremely well, and Bill C-4 respecting the Canadian Wheat Board.

Bill C-4, unlike Bill C-5, does not have a common goal that provides for the economic benefit of its members, the producers of the Canadian Wheat Board. Unfortunately Bill C-4 did not have the same consultative process as Bill C-5 has had. In committee we were told we had to rush Bill C-4 through without having the proper consultation because it had to get to third reading before the Christmas sitting was over.

It was sent to committee where we had to get it through. Bill C-5 took time, took legislative opportunity, to make sure adjustments were made. Bill C-4 did not come about in that fashion. Bill C-4, unlike Bill C-5, does not take the initiative to understand the problems producers face or to develop solutions.

Bill C-5 did that. We listened to what the industry was saying about what it needed for the future, for the 21st century. Unfortunately the government did not understand the problems facing producers and did not put into place the necessary legislation to deal with those problems into the 21st century. Bill C-4, unlike Bill C-5, does not allow farmers to decide in their best interest to ban together to gain better control over the marketing of their products.

In Bill C-5 the membership makes the rules. The membership is the owners. In Bill C-4 that is not the case. The government still maintains ownership. The elected board of directors is only 10 out of 15 and the chief executive officer will be appointed by government. It does not allow the producers, the major stakeholders, to have a say on how they will be operated.

Bill C-4 unlike Bill C-5 has not updated its legislation and modernized its framework to adjust to the 21st century since the inception of the Canadian Wheat Board in 1935. Unfortunately Bill C-4 does not allow the producers to have a voluntary or opt in, opt out situation.

I am making an analogy between Bill C-5 and Bill C-4. I appreciate the model which has been put forward in Bill C-5. Unfortunately it has not been carried through. Unlike Bill C-5 the proposals in Bill C-4 were not the product of consultation with all stakeholders. The government already predetermined the options of producers before they were even allowed to speak in committee.

As I said earlier, the committee would not allow members or stakeholders to come forward to speak to a very important piece of legislation that would control their operations for the next numbers of years.

Bill C-4, unlike Bill C-5, fails to modernize the operations of farmers so they can better compete in domestic and international markets on a level playing field. Bill C-5 allows for the co-operatives to compete on a level playing field with private corporations. It allows them to modernize with more capital. It allows them to make sure that they will be competitive and in business come the 21st century. Bill C-4 unfortunately does not allow producers to do that.

Bill C-4, unlike Bill C-5, does not speak to the wishes expressed by the majority of farmers. Bill C-5 took that into consideration. They sat down will all the stakeholders, talked to them and listened to them to put in place the right piece of legislation that would allow them to do that. Bill C-4 would not.

Bill C-4 and Bill C-5 could do so much for farmers. Bill C-5 achieves this with great success while Bill C-4 fails miserably. I hope the government over the holiday season has a change of heart and starts to listen to farmers, particularly those in western Canada, and does the right thing by providing Bill C-4 with the much needed tools that farmers want to compete in the 21st century, much as Bill C-5 does.

The co-operative movement is a very important movement in my community. During the question and answer period the last time I rose to speak, a question was asked by another member as to whether a member of a co-operative could speak honestly about it. I can stand here today and proudly say that I am a member of a co-operative. We have one in Brandon, Manitoba, to which I belong. It is the best way to provide that service.

I do not wish to prolong debate longer than necessary. I believe all parties are in agreement with this piece of legislation, which is unusual in the House. The Progressive Conservative Party recognizes that in some instances the government listens. In some instances it will let the people be a part of the legislation that is necessary to govern them. We will be supporting the legislation when it comes to the vote.

[The Deputy Speaker]

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 Halifax West, Aboriginal affairs; the hon. member for Vancouver East, Youth; the hon. member for Hochelaga—Maisonneuve, Tobacco legislation; the hon. member for Charlotte, Aboriginal affairs; the hon. member for Burnaby—Douglas, Fisheries; the hon. member for Frontenac—Mégantic, POWA; the hon. member for Waterloo—Wellington, The economy.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, I listened very carefully to my colleague. He belongs to a co-operative. Good for him. I too belong to a co-operative, a food co-operative. As the member so eloquently said, it is rare that the House can almost unanimously support a bill.

Co-operatives are very important in our society. Fifteen or so years ago, in my region, we set up a food co-operative. Several food co-operatives were set up at the same time in Quebec, but many of them are closed now.

I know that my colleague has some good experience in this area. I put the following question to him: Why do some and even many co-operatives have trouble staying alive, surviving, and why are there so few really vigorous co-operatives in certain areas? I would like him to tell me about his experience.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, I am learning to speak French, but I have difficulty answering in that language.

I would suspect that the co-operative is no different than any other business venture. It depends on the people who are involved in the management of the co-operative. It is obviously involved with the business acumen and experience that people have as to how good the co-operative is itself. Some co-operatives do not succeed. In some cases it is probably because of undercapitalization, underfinancing. That is usually the reason most businesses fail regardless of whether they are a co-operative movement or in the private sector.

I said initially in my opening comments that in our particular case co-operatives are a feel of the communities. The communities and the people develop the co-operatives. It depends on the motivation of those individuals as to how successful those enterprises are going to be.

I can honestly say that in western Canada the co-operative movement was very successful because people helped people work with people. It was a grassroots movement. The profits that came from the development of that business were put back into the business. I would suspect it is a bit of a culture that came from that particular co-operative movement and perhaps the opportunity to have better capitalization when they went into the enterprise in the first place.

That would be my opinion. There are any number of reasons why some are good and some are not good.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

Carried.

(Motion agreed to, bill read the third time and passed)

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I believe that if you were to seek it you would find unanimous consent for the following motion:

That, notwithstanding any standing order or usual practice, private members' hour shall commence this day at 4.30 p.m., provided that all divisions standing deferred to the time of expiry shall be called at 5.30 p.m. and proceedings pursuant to Standing Order 38 shall be taken up immediately thereafter.

In other words the adjournment proceedings will occur immediately after the votes to be taken at 5.30 p.m.

If there is consent for putting this motion and carrying it, then I will subsequently propose to suspend until 4.30 p.m.

[The Deputy Speaker]

Does the hon. government House leader have the unanimous consent of the House to propose the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

Carried.

(Motion agreed to)