Cooperative Development in Quebec

1
Co-operative Development in Quebec

• Michel Clément, Development Co-ordinator,
  Direction des Coopératives, Quebec Ministry of
  Economic Development, Innovation and Export

2

• Co-operative Development in Québec
• Co-operatives Branch
• March 2009

3
Québec A Few Statistics

• Population 7.5 million inhabitants
• 83 francophone
• The largest province, covering 1,667,900 km2
• (3 times larger than Spain)
• Second most populated province in Canada

4
The Québec Co-operative Movement2006 Overview
Jobs
Sales (000,000)
No. of co-ops
43,360
9,203
2,6451
Non-financial co-operatives
5,414
2,994
44
Mutual insurance associations
39,985
9,398
549
Financial services co-operatives
88,759
21,595
3,238
All co-operatives
1 There were 2,589 co-operatives, 2,227 of which
are reporting (have submitted their annual
report).
5
Five Co-op Categories in Québec

• Consumer co-operatives
• Producer co-operatives
• Work co-operatives
• Worker-shareholder co-operatives
• Solidarity co-operatives

6
Non-Financial Co-operatives (Overview 2006)
1 Does not include sales of companies in which
the worker-shareholder co-operatives holds
shares. 2 Reporting co-operatives.
7
The Québec Co-operative Movement (contd)

• Desjardins Leading financial institution and
  employer in Québec (over 39,000 jobs)
• Agricultural Processes and markets 85 of
  poultry 64 of milk 54 of cheese, yogurt, and
  butter, 51 of pork and deli meats (in 2003)

8
The Québec co-operative Movement (contd)

• School co-ops Active in all francophone
  universities and 75 of collegial institutions.
  Computer hardware, school supplies, and food
  services
• Forestry co-ops Nearly 4,000 jobs
• Health and home care services co-ops Some 3,000
  jobs

9
Co-operatives BranchDuties

• Administer the Co-operatives Act (which regulates
  over 2,600 co-ops)
• Review and amend the Act
• Manage the partnership agreement
• Administer the partnership fund
• Manage fiscal measures
• Co-operative Investment Plan
• Deferred Tax Rebate

10
Co-operatives BranchDuties (contd)

• Administer the databank
• All co-ops must submit an annual report
• Enter and compile financial statement data
• Produce statistics (per sector, region, and co-op
  type)

11
Co-operatives BranchDuties (contd)

• Provide training and information on the Act,
  co-op operation, and business management
• Produce guides and brochures
• Provide training for socio-economic developers
  and co-op managers
• Produce notices

12
Co-operatives BranchDuties (contd)

• Conduct research and strategic watch activities
• Produce and update sectoral progress reports
• Conduct studies and research (e.g., survival
  rates, capitalization, etc.)
• Ensure sector
• Provincial and regional oversight
• Maintain ties between the co-operative sector and
  government and private partners
• Take part in various committees and organize
  activities or events

13
Mutual Concerns of the Government
andCo-operative Movement

• New business creation (co-ops)
• Job creation
• Regional development
• Business sustainability (survival rate)
• Improvement of main development indicators
• Solutions for emerging needs (take over private
  business, local services, personal care, etc.)

14
Timeline of Main Government Initiatives for co-op
Development

• 1906 Adoption of first Co-operatives Act
• 1963 Creation of co-operatives Branch
• 1985 Implementation of Regional Development
  Co-operative Assistance Program
• 1985 Creation of co-operative Investment Plan
• 2003 Launch of the co-operative Development
  Policy
• 2005 Co-operative development partnership
  agreement

15
Strengths of non-financial co-ops

• Appearance of co-ops in new fields and creation
  of critical mass in some sectors
• Strong presence in primary and secondary sectors
  (jobs with significant impacts)
• Structured networks in a number of sectors (e.g.,
  agrifood, funeral services, forestry, grocery
  stores, education, home care services, etc.) and
  with partners

16
Co-operative Movement and Partner Network

• A provincial association (Conseil québécois de la
  co-opération et de la mutualité, CQCM)
• A dozen sectoral federations
• A network of 11 regional development
  co-operatives (RDC) supporting the creation of
  regional co-operatives
• A government branch
• A government corporation with co-operative
  financing programs (Investissement Québec)

17
High survival rate, particularlyin federated
sectors
18
Co-op creation has doubled since 1995
Since 2003, more than 50 of the new co-ops
developed in Canada are from Québec.
19
Non-financial Co-op-Employment Growth
20
Co-op employment growth surpassed employment
growth in Québec economy (1996 to 2006)
7.2
Average annual job growth in co-ops
2.1
Average annual job growth in the Québec economy
21
A policy based on consultation and joint action

• 2000 Decision to institute a Co-operative
  Development Policy
• 2001 Launch of a broad consultation on the
  policy and a review of the Co-operatives Act
  (two-year consultation)
• 2001 A Study Tour to see the best in
  co-operative development
• 2003 Policy launch
• 2005 Coming into force of amendments to the
  Co-operative Act

22
A Study Tour to see the Best in Co-operative
development

• Italy
• France
• Portugal, Spain, United Kingdom (discussion with
  representatives of these countries at European
  Economic Union in Brussells)

23
Study Tour and Research Observations

• The most interventionist countries and the most
  committed in supporting the co-operatives show
  strong co-operative development (ex Italy,
  Spain, Portugal)
• The countries which have not adopted their tools
  and support for co-operatives or are not
  committed in supporting co-operatives show a
  weaker co-operative development (ex Germany,
  United States, Belgium, Sweden)

24
Six Policy Objectives

• Create 20,000 jobs in 10 years, with most in
  outlying regions
• Improve main development indicators (sales,
  assets, number of members, number of new co-ops,
  market penetration)

25
Six Policy Objectives (contd)

• Accelerate co-op growth and diversification by
  increasing co-op investment by 25 in the next
  five years
• Expand large co-ops and keep decision-making
  centers in Québec

26
Six Policy Objectives (contd)

• Spur the emergence of new critical masses of
  co-ops in various sectors
• Maintain high co-op survival rate in organized
  sectors and improve the rate in emerging sectors

27
Four Courses of Action

• Adopt an effective and innovative legal framework
  
• Develop capitalization and financing tools
  tailored to the needs of co-ops
• Improve the availability of consulting services
• Recognize co-ops and promote this type of business

28
Course of Action 1 Legal Framework (Achievements)

• November 17, 2005 Establishment of the new
  Co-operative Act designed to
• Reinforce the distinct character of co-ops
• Improve capitalization and reassert the
  indivisibility of the general reserve
• Improve co-op operation
• Improve accountability and the democratic model
  of operation

29
Course of Action 2 Capitalization and Financing
(Achievements)

• Tools for small, medium and large co-operatives
• Creation of Réseau dinvestissement social du
  Québec
• Update of Investissement Québec programs
• Creation of Capital régional et co-opératif
  Desjardins
• Overhaul of the co-operative Investment Plan
  (2004 and 2006)
• Implementation of the Deferred Tax Rebate

30
Changes in the Capitalization Rate 19972005
31
Course of Action 3 Consulting Services
(Achievements)

• Establishment of a three-year partnership
  agreement (including 4 components)
• Promotion of co-operatives and joint action
• Technical support for co-op startup
• Specialized post-startup guidance
• Support for development initiatives

32
Consulting Services (In Progress)

• Strengthening or reorganization of emerging
  sectors (home services, labor, worker-shareholders
  )
• Improvement of monitoring by federations and RDCs
• Progressive implementation of co-operative
  monitoring tools
• Renewal of partnership agreement

33
Consulting Services (In Progress)

• Overhaul of services provided by RDCs and certain
  federations based on new needs
• Update of co-op startup and monitoring tools
  addressing new sectors and opportunities

34
Consulting Services (In Progress)

• Identification of development strategies in
  promising sectors
• Take over (businesses), home services, healthcare
  services, local services, worker-shareholder
  co-operatives, services in the community
  (grocery, hardware, restaurant, daycare services,
  etc.)

35
Consulting Services (In Progress)

• Establishment of regional and sectoral co-op
  development partnerships
• Implementation of professional development
  strategies for RDC and federation personnel
• Promotion of best business practices (e.g.,
  Kaizen)

36
Course of Action 4 Recognition and Promotion
(Achievements)

• Budget to support consolidation efforts
  (Component 4 of the partnership agreement)
• Implementation of the youth strategy (one person
  per region to raise youth awareness of the
  co-operative approach)
• Support for youth service co-ops (by Fonds
  Étudiant II)
• Business partnership between the government and
  home services co-ops (FAPDHS)

37
Recognition and Promotion (In Progress)

• Studies and positioning committees focused on
  promising sectors (health, take over businesses,
  worker-shareholders, etc.)
• Better recognition of co-ops in various
  government departments and with regard to major
  issues
• Awareness of economic players with regard to the
  co-op approach
• Co-op development in certain major areas

38
Conclusion

• The legal course of action is finalized.
• The capitalization and financing course of action
  is complete.
• The consultation assistance course of action was
  completed mainly through the partnership
  agreement. Work is still in progress to bolster
  emerging sectors and redefine available
  consulting services.

39
Conclusion (contd)

• The recognition of course of action has come a
  long way with regards to youth projects.
• RDCs and federations are forging partnerships to
  improve the provision of startup and monitoring
  services.

40
Conclusion (contd)

• There has been a significant increase in co-op
  jobs, co-op assets, and new co-ops from 1996 to
  2006.
• Co-ops are increasingly active in major sectors
  and issues (food processing, forestry, home cares
  services, health care, take over businesses,
  local services, participation in businesses,
  etc.).

41
Conclusion (contd)

• Co-ops are also diversifying into new sectors
  (e.g., tourism, local Québec products, senior
  housing, arts and culture, technology, wind
  energy, etc.).

42
In summary, to better support co-ops, the
government must

• Conduct consultations (e.g., on the Co-operative
  Development Policy)
• Supervise (administer legal framework)
• Support (fiscal programs and measures)
• Guide and monitor (statistics, major issues)
• Recognize and promote

43
White Paper Report Card

• White Paper Report Card
• Question 1
• Do you agree with our assessment of the report
  card on the White Paper on Co-operative
  Development?
• Question 2
• What obstacles need to be overcome to get the
  sector working together to achieve the
  recommendations set forth in the White Paper?