Special Federal Committee on Cooperatives

UPDATE: JANUARY 30TH 2013

The Federal Government released its response to the recommentions made by the Special Committee on Cooperatives : STATUS OF COOPERATIVES IN CANADA

The Government addressed 8 recommendations proposed in the Committee's report.

For Immediate Release
January 29, 2013

Conservatives Backtrack, Allow Co-ops to Renegotiate Mortgages
 
OTTAWA– In response to Liberal pressure, the Conservative government has backtracked and agreed to provide reasonable mortgages and refinancing for housing co-operatives, said Liberals today.
 
“Today marks a long-overdue victory for housing co-ops across the country that will now have the ability to restructure their government-held mortgages following months of adamant opposition from this government,” said Liberal Housing critic John McCallum. “It was ridiculous that affordable housing mortgages had become a government cash cow, so I am very glad to see we were able to change the Conservatives’ minds.”
 
Until today the Conservative government had stubbornly asserted that housing co-operatives seeking to restructure their government-held mortgages, many with interest rates as high as 13.25%, were out of luck. Yesterday, in their response to a report by the House of Commons Special Committee on Co-operatives – a committee that was brought about by a Liberal motion – the Conservatives said they will now allow a ‘discounted pre-payment penalty’.
 
“The government must now promptly and clearly define the new eligibility criteria so that the co-ops stuck with mortgages up to four times today’s lending rates can begin to benefit,” said Liberal Advocate for Co-operatives Mauril Bélanger. “Also, if the Conservatives let the federal money tied to co-op housing agreements expire, thousands of low-income families, seniors, persons with disabilities and Aboriginal Peoples could find themselves homeless.”

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On May 31, 2012, the House of Commons passed the following motion tabled by the Honorable Mauril Belanger, MP for Ottawa-Vanier, on behalf of the Liberal Party of Canada:

"That, a special committee be appointed to consider the status of cooperatives in Canada and to make recommendations by: (a) identifying the strategic role of cooperatives in our economy; (b) outlining a series of economic, fiscal and monetary policies for strengthening Canadian cooperatives as well as for protecting the jobs they create; (c) exploring the issue of capitalization of cooperatives, its causes, effects and potential solutions; (d) exploring whether the Canada Cooperatives Act of 1998 requires updating; (e) identifying what tools the government can use to provide greater support and a greater role to Canadian cooperatives; and that the committee consist of twelve members which shall include seven members from the government party, four members from the Official Opposition and one member from the Liberal Party, provided that the Chair is from the government party; that in addition to the Chair, there be one Vice-Chair from each of the opposition parties; that the committee have all of the powers of a Standing Committee as provided in the Standing Orders, as well as the power to travel, accompanied by the necessary staff, inside and outside of Canada, subject to the usual authorization from the House; that the members to serve on the said committee be appointed by the Whip of each party depositing with the Clerk of the House a list of his or her party’s members of the committee no later than June 8, 2012; that the quorum of the special committee be seven members for any proceedings, provided that at least a member of the opposition and of the government party be present; that membership substitutions be permitted to be made from time to time, if required, in the manner provided for in Standing Order 114(2); and that the Committee report its recommendations to this House no later than November 30, 2012."

Cooperatives from all over Canada were invited to make a presentation to the committee. Participants represented all types of co-op businesses, and outlined, in part, information about their own cooperatives, but also shared information that spoke to all cooperatives, in general. Concerns ranged from the recent Federal cooperative funding cuts, to grants, sustainability, and suggested changes to the Cooperative Business Act. The AFREA was in invited to present to the committee in Ottawa.

Presentation by the Alberta Federation of REAs (AFREA) Ltd

Merv Rockel, AFREA President

Dan Astner, AFREA Vice President

"Thank you to the Committee for the invitation to be here.

"Rural Electrification Associations (REAs) are unique to Alberta and the AFREA represents an entity that exists nowhere else in Canada. It is one of pride, but can also be one of specialization, and sometimes, uncertainty. The story of rural electrification was slow to develop in Alberta when compared to other provinces in Canada. Our story begins in the mid-1940s when 90% of farmers interviewed were still waiting for power. Rural grassroots spirit and passion for a cause ignited the electrification movement. Public power was the force behind rural electrification in other provinces, but Alberta farmers had to find ways to work with the government and utility companies: the government didn’t want to be labeled as a socialist government and the utility companies didn’t see it as a way to make money. Farmers just wanted what was an expected service by rural consumers. Electrification changed rural farm life.   

"Leaders in electrification formed cooperatives to satisfy requirements – they pooled not only their financial resources but also their human resources, working side by side in cooperative fashion to build the lines needed to bring power to remote farms. Many things have changed over the years but it remains that farms still require the necessary power to operate and sustain their livelihood; in fact, in order to keep up with growing market trends, power is even more crucial to the agricultural operations that exist today.

"Cooperatives have a long running history in Canada, building our nation and building our provinces. There is a wide diversity in cooperative awareness from those who patronize several co-op businesses over the course of many years, to those who have never heard of co-ops. As we look ahead, not only as Rural Electrification Associations, but as any cooperative business will, our concerns involve sustainability. We realize our decisions of today impact generations of consumers tomorrow. When the REAs consider their sustainability plans, it is necessary to build our future directives on the foundational pillars of society – social, economic, and environmental aspects create a solid base on which to build not only a business, but also a better community and a better world.

"The AFREA is proud to represent our member Rural Electrification Associations across the province of Alberta. In 2011, we completed our own sustainability strategy documents that encouraged our member associations to get out into their communities and create awareness. Combine our promotional efforts to increase our community presence alongside the historical United Nations declaration of 2012 as the Year of the Cooperative, and you have a formidable match. Replace any of the references to Rural Electrification Associations in the REA Advantage sustainability document, with any cooperative, and you have a general plan that encompasses a business willing to incorporate community building values.

"Sustainability is:

• cooperatives getting back to their roots
• creating awareness that involves education, inclusion, and encouragement
• about offering services above and beyond without worry of profit
• the acceptance that it might involve redefining a purpose to ignite the passion that brought the organization to the forefront when the need arose.

"Rediscover that passion, and cooperatives will continue to prosper.

"This year, declared as the International Year of Cooperatives, provides opportunity for cooperative businesses to shine while in the global limelight. It brings cooperatives together with a chance to create a common bond among themselves. It truly promotes cooperates working together as defined in the Seven Cooperative Principles. The year provides the means to showcase a co-op business product and/or service, while exemplifying the cooperative business model. The celebration encourages communities to come together as one, remembering those who led the way, but also celebrating those people who continue to make a difference in the cooperative world. The year is not a means to an end – it must be a renewed beginning.

"As the provincial Federation representing member REAs, the AFREA has a duty to explore and discover new ways to continue our own existence through the prosperity of our membership. The demographics of rural Alberta are constantly changing; the power industry is a dynamic one; however, we do not operate in isolation. It is imperative we work in unison with those around us, not only providing for today’s consumers, but also looking ahead to the consumers of the future. It is our belief that IYC2012 should just be a beginning to what needs to be a renewed campaign for cooperative support. A constant program with financial outlets, public awareness, and government support, will go a long way to maintaining a strong cooperative movement. Cooperatives give back to the communities where they exist and their contribution to local economics, through job creation and community investment, sums up their value.

"We applaud the Federal government for their committee mandate and the directives identified in the recent House of Common’s motion. We are honored to contribute our input to this committee through this presentation which shares with you the story behind the REA cooperative business. We also represent the future of all cooperatives by confirming sustainability issues, funding issues, and renewed regulatory considerations are required so that cooperative businesses continue to build a better community and a better world.

"On behalf of the AFREA and our member REAs, thank you."  

(c) AFREA July 2012