Will the Government Co-operate With Canada’s Co-ops?

This week, Montreal will welcome hundreds of leaders from a business sector that is trying to “build a better world”: The co-op sector.

Co-op leaders from across Canada are meeting from June 27 to 28, in celebration of the United Nations International Year of Co-operatives, sharing its theme of “Co-operative Enterprises Build a Better World” — a theme that may appear too big for its britches, but is a new look for a sector who usually shies away from flaunting its unique style.

In recent months, the Canadian government has also made an effort to promote the co-op sector, with the new appointment of MP Mauril Bélanger as the Liberal Advocate for Co-operatives in May and the creation of the special committee on co-operatives, which held its first meeting last week.

Co-operatives have a long history in the Canadian economy, from early farming co-ops in the late 1800s to the development of the first caisse populaire in 1900 by Alphonse Desjardins (Desjardins Group now being the largest association of credit unions in North America and the largest financial institution in Quebec).

First, let me answer that burning question you have: What is a co-operative? In brief, a co-operative is an organization owned by the members who use its services or are employed there. It’s also a business model, different from traditional corporate models for its democratic structure of one-member, one-vote (as opposed to the traditional capitalist model of votes being proportional to shares owned). In this way, co-ops shift the bottom-line from simply increasing profits, to doing what’s best for their members.

“They’re very solid businesses and enterprises,” says Bélanger in a phone interview. “When you look at the positive impact co-ops have on communities, you wonder if the government sees itself as having a role there, no larger or pronounced than it does for private businesses, but that’s one thing that I hope the committee will explore a bit. That there’s an even playing field here.”

Bélanger is a co-op member himself. He banks at a credit union and resides in a housing co-op. Bélanger says he hopes his new appointment and work with the special committee will help achieve “a greater awareness of co-ops and a growing awareness that the Government of Canada, whoever is in government, may have a role to play in supporting co-ops.”

Unfortunately, it’s a bit of a bleak outlook for the special committee on co-ops, who seems to have tripped themselves after only just leaving the start-line.

“We’re in a bit of a fix right now,” says Bélanger of the committee’s decision to only give themselves the summer to complete their report on co-operatives in Canada, “but I’m hoping we’ll find a way to sort that out.” The committee’s tight deadline to table the reading within the first three sitting days of the House in September, means they’ll miss the opportunity to learn from the discussions and papers set to be presented in October at the International Summit of Co-operatives being held in Quebec City.

Not a great start for a committee who is already receiving criticism from those who believe this isn’t the place for government at all, such as Professor William Watson, an economics professor and public policy expert at McGill University, who told the Montreal Gazette last week “It’s not the role of the government to encourage different organizational forms in business…they should stay out of it. If a co-op is a good way to do business, then the co-op form will succeed.”

“If that were so, then why do we have companies, given their failure rate?” rebuts Melanie Conn, a co-op developer with DevCo in Vancouver.

Conn points out the federal government’s devastating budget cuts to the Co-operative Secretariat last March, mean statistics about co-ops will no longer be collected; while numbers for businesses structured as companies will certainly continue to be collected by Industry Canada. “[T]here is a role for government,” says Conn in an email, “and it should be to provide the same services and recognition to co-ops as to other forms of business.”

And co-ops are not just an alternative business model, they’re also “a strong element of social cohesion,” remarks Bélanger, and “social cohesion is the responsibility of all of us, including governments. The less social tensions you have, the better off we all are, the better off the country is,” he says.

A recent survey by Abacus Data on Canadians’ perceptions of co-ops reported improved numbers compared to a 2010 survey, but despite these new results showing that 85 per cent of respondents had heard of co-ops and 65 per cent described themselves as “familiar” with co-ops, only 5 per cent were aware that 2012 is the International Year of Co-operatives, and the Canadian Co-operative Association, who commissioned the survey, notes on their website that these results may be higher than results from 2010, because Abacus reminded respondents credit unions are a type of financial co-op.

Hopefully events such as the joint Congress in Montreal, the International Summit in Quebec City, MP Mauril Bélanger’s new role and the special committee on co-ops will all help increase awareness and discussions around co-ops in Canada.

And although awareness remains the biggest challenge for the co-op sector, it also presents an opportunity for government to step in and do some good. Maybe even build a better world.