Chris in the News: Co-ops boast 'resilience' in turbulent economy, says MP

By Natalie Stechyson, Postmedia News

OTTAWA — Canadians should take more notice of co-operatives and look to emulate the resilient business model, says the MP behind a newly-formed House of Commons committee.

The Special Committee on Cooperatives, spearheaded by Liberal Mauril Belanger, meets for the first time Tuesday.

The purpose of the new committee is to identify the strategic role of co-operatives in the economy and further their development in Canada, Belanger said.

A co-operative is an organization owned by the members who use its services or are employed there, according to the Canadian Co-Operative Association. They can exist in any sector.

Co-operatives have deep roots in Canada's economy and could be further developed, Belanger told Postmedia News. They also have a high rate of job creation, give back to the community and remain solid during times of financial crisis, he added.

"They offer a model which has more resilience. And at times when you have turbulence, it may indeed be a model that would traverse such turbulences more readily than private-sector enterprises," Belanger said.

"There are some values that inhabit and animate the co-op world that I believe we should be paying attention to."

Some of Canada's largest businesses, such as Desjardins Group and Mountain Equipment Co-Op, are co-operatives. Desjardins Group, which was founded in 1900, has more than 5 million members and assets totalling more than $190 billion. Mountain Equipment Co-Op, founded in 1971, has 3.5 million members in Canada and abroad. Its sales in 2011 were $268.7 million.

"There are tools that the government could make available, could create, that would not cost a lot or perhaps even cost nothing, that would be favourable to the creation of more co-ops," Belanger said.

There is much to celebrate about Canadian co-operatives, said NDP MP Chris Charlton.

"People, not capital, control the organization. This model has ensured that co-ops succeed at a higher rate than the private sector, without relocating jobs offshore," Charlton said in the House of Commons Monday.

But it's not the role of the government to encourage different organizational forms in business and they should stay out of it, said William Watson, an economics professor and public policy expert at McGill University in Montreal. If a co-op is a good way to do business, then the co-op form will succeed, Watson said.

"The government's position should be a scrupulous neutrality," Watson said in an email.

"In particular, I see no good reason to favour co-ops with subsidies or tax breaks or regulatory largesse that other business don't receive."

The United Nations declared 2012 the International Year of the Co-operatives. Interim Liberal leader Bob Rae appointed Belanger as the Liberal advocate for co-operatives earlier in May.

"This is as partisan-free as I can make things, and I hope it will remain as such," Belanger said.

The committee will report its recommendations to the House no later than Nov. 30, according to the motion.

No Conservative committee member could be reached for comment Monday evening.

Canadian co-ops by the numbers:

- There are about 9,000 co-operatives and credit unions across Canada, employing more than 150,000 people and boasting more than $330 billion in assets.

- Canada has the highest per-capita credit union membership in the world, with 33 per cent of Canadians being part of at least one credit union.

- A Quebec study from 2008 found that 62 per cent of new co-ops were still operating after five years, compared to a 35 per cent survival rate for other new businesses. After 10 years, 44 per cent of new co-ops were still operating compared to 20 per cent for other new businesses.

- There are at least 2,000 communities in Canada with at least one credit union or caisse populaire.

Source: Canadian Co-Operative Association