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Self-reliance Through Mutual Aid Co-operatives and Development in Rural and Remote Canada
Report submitted to the Honourable Andy Mitchell, Secretary of State for Rural Development and FedNor by the Minister's Advisory Committee on Co-operatives
The members of the Co-operatives/Rural Working Group are:
Leslie Brown, Chair, Robert Revet, Beverly Kirby, Léonce Losier, Fernand Vermette
November 2002
I New Challenges and Opportunities for Rural and Remote Canada
Communities and enterprises in Canada, because of interrelated forces such as globalization and demographic change, have been forced to change in order to become more competitive and innovative, particularly in the resource-based sectors. But innovation and gains in productivity required to remain competitive in world markets have been at the expense of jobs in rural and remote Canada.
The net out-migration (particularly youth) and slow economic growth in rural Canada have left a shortage of the skills needed for transition to the knowledge-based economy and for harnessing full opportunities for growth.
Without vibrant economic opportunities, skilled workers cannot be attracted, information technology is not accessible, and services erode as the population growth declines. Rural and remote communities need a foundation on which to build opportunities, to develop, attract, retain people and to reinforce the service base essential for the quality of life.
The Federal Government's policy agenda including, Innovation, Health and Environment, Skills and Knowledge, and Infrastructure, including Information Technology, could create the basis for rural renewal.
This paper sets out the important role that co-operatives play in responding to challenges, both as a provider of services in rural and remote communities, and as a tool for community economic development.
II Why Co-operative Structures?
"The Co-operatives/Rural Working Group believes that self-reliance through mutual aid will result in vibrant communities, self sufficiency, and quality of life for all Canadians".
Participants to the Second National Rural Conference 2002 in Charlottetown PEI recognized that Co-operatives are a good model for community co-operation.
Co-operatives provide a structure of choice because, in immediate terms, they provide a structure which: allows communities to pool community resources; helps community members share what could otherwise be daunting responsibility; fosters legitimacy by involving many people and by being open and transparent democratic organizations; creates an enterprise that is rooted in the community and will not easily move away. They are a tool that rural and remote communities use to improve their capacity to respond to their own needs. As has been evidenced time and again across Canada, communities which take ownership of their own directions for the future will stand a better chance of succeeding. For example, the work that has been done in the Muskoka region to establish community co-operatives, starts with the basic question, "what resources exist - what can the community do for itself?" This approach permits the community to take charge and to start addressing their own needs without waiting for outside resources such as government. If resources do become available from the outside, they can be added to what the community has put in place itself.
In talking to groups across Canada, who have worked in the area of developing new co-operatives, there are some common findings. While it is reported that each co-operative development project is unique and provides its own story, it is also reported that development of new co-operatives tends to flourish under certain conditions:
- When there is a common need in the community, the community will be predisposed to using the co-op model. For example, the Canadian Worker Co-operative Federation reports that development of worker co-operatives is easier in regions where employment creation is a common objective in the community.
- There are also certain cultural characteristics which are conducive to co-operative development. Le conseil Canadien de la Coopération suggests that the cultural element of solidarity in Québec results in many communities looking to co-operative structures to undertake ventures of joint interest. It can also be observed across Canada that Francophone minority language communities often use co-operative structures to deliver services in communities in the French language. The rural/remote cultural attribute of "doing things ourselves" which exists in less metropolitan areas like Saskatchewan also favour co-operative structures as a way of getting things done.
- The Canadian Cooperative Association has suggested that co-operative structures are more readily accepted and implemented in areas where other service providers are not involved in a major way. Here they cite examples of micro-lending in Newfoundland where small cottage businesses have difficulty getting the attention of existing financial institutions. Also, they cite the example of Northern Canada where Arctic Co-operatives has been very successful in delivering services that may have been previously nonexistent such as hotels, taxi service and fuel contracts or, services which were being provided under a monopoly situation such as supply of food stuffs.
- In the experience of all of these organizations, co-operative structures also tend to be more readily used and more successfully implemented when there is critical mass, i.e. a number of co-operatives already exist in the community and, where there are technical resources available to support the development of co-operatives.
Research by Paul Wilkinson and Jack Quarter in the Evangeline area of PEI and reported in "Building A Community Controlled Economy" concludes that co-operative development is most likely to be successful when: (1) there is a basic level of community consciousness - people are attached to the community and have a sense that something must be done; (2) opportunities for involvement are available and strategies of self-reliance are developed - empowerment activities; (3) activists can draw on support structures such as existing community-based organizations, with external support structures to fill in where the local ones need to be supplemented. In Evangeline, early co-operatives and credit unions played a major role in fostering these three conditions, and contemporary co-op development efforts benefit from the conditions having already been met.
Often the first co-ops to be developed are credit unions and co-operatives that meet the need for goods and services not easily available to the community, or as a way for existing independent producers to work together for their mutual advantage (as in agriculture or the fishery). The next generation of co-ops can then build on the enhanced community capacity to move in innovative directions that include new firms or services often reaching out beyond the community and participating in the market economy more broadly (as in new generation co-ops, youth summer employment co-ops, information technology co-ops, employee takeovers of family firms worried about succession, etc.).
Leslie Brown in her research, "Social Auditing And Community Cohension: The Co-operative Way", suggests that evidence from the literature and from the study of three open membership credit unions shows that by being stable, locally owned, democratic, financial co-operatives, credit unions contribute to community capacity and social cohesion, while providing needed products and services. Many credit unions go much further becoming important local philanthropists, developing programs geared toward the marginal or excluded, entering into partnerships for Community Economic Development (CED) or Community Development (CD), hosting community bulletin boards, supporting or providing innovative educational programs, and many other activities. Nationally and provincially in the credit union system there are annual awards to recognize and celebrate credit unions' community contributions over the past year.
Laurie Mook Schugurensky and BJ Richmond in papers for the Canadian Association for Studies in Co-operation used social accounting methods to identify the direct and indirect contributions which housing co-operatives such as Waterloo Co-operative Residence Incorporated make to human and social capital. They identify many, including the provision of needed student housing, development of leadership capabilities, and organizational skill development. Another form of housing co-operative, La coopérative Chez Nous Ltee in Wellington PEI, provides assisted living housing community for seniors. Opened in 1993, this co-operative addressed the concerns of Francophone seniors in the Evangeline region who found themselves forced to reside in a predominately Anglophone environment in near by Summerside. Community ownership to ensure that the home reflects life in the region was also important and thus the reason why the co-operative structure was incorporated.
Finally, it must be stressed, that one of the very unique roles of co-operative structures is that, because of their democratic, community based structure, they tend to focus on both economic and social objectives simultaneously. The importance of this particular attribute of co-operatives is brought to life once again in a recent paper by Caroline Beauvais and Jane Jenson prepared for the Canadian Policy Research Networks entitled, "Social Policy: Updating the State of the Research". In this paper the authors propose that recent policy work in the European Union has exposed the interconnection of the economic and social dimensions by specifically linking Social Policy, Economic Policy, and Employment Policy. This tripartite - interactive model breaks dramatically with the notion that social cohesion is either an independent or a dependent variable. Advocates of the model point out that social expenditures, whether on health or education, are investments in human resources, with positive economic effects. Likewise social transfers covering pensions and social security not only contribute to equalizing and redistributing income across the life course and across social groups, but they also support better "quality" in employment, with consequent economic benefits. On can deduct from this that organizations like co-operatives which promote both the social and economic dimension are significant contributors to social cohesion in rural and remote communities.
III Who should lead?
There is much research that demonstrates that building sustainable self-reliant communities must be done "from the roots up" through "bottom up initiatives". While local initiatives need support structures and ongoing training/educational/leadership development opportunities, they need first and foremost to be involved in planing their own community's future. At times they will need co-op developers/community development consultants to facilitate planning and strategic thinking.
Martine Vézina, Daniel Côté and Luc Bernier in their study, "Co-operative Development and the State: Institutional Aspects in Europe", in looking at the experience of four European countries: Spain, France, Italy and Portugal, concluded that: "responsibility for development be assumed first and foremost by the stakeholders in the field. They stress that impetus and initiative must come from the grass roots".
With respect to role of government, a 1999 study by Brett Fairbairn of the Centre for the Study of Co-operatives at the University of Saskatchewan entitled, "Co-operative Development and the State: Case Studies and Analysis", in looking at case studies of the United States and Australia concluded: "Where government agencies are pro-active while also respecting co-operative autonomy, as is the case of the United States Department of Agriculture or some Australian state governments in certain periods, the result is large numbers and new types of co-operatives." This would suggest that a proactive government can function as an external support structure.
In a May-June1996 Harvard Business Review article, Henry Mintzberg pleads for balanced society with a strong private sector, a strong public sector, and great strength in sectors in between. He draws four conclusions:
- Business is not all good; government is not all bad.
- Business can learn from government no less than government can learn from business; and both have a great deal to learn from co-operatives and non governmental orgs. (NGO's).
- We need proud, not emasculated, government.
- Above all, we need balance among the different sectors of society.
Previously mentioned research by Paul Wilkinson and Jack Quarter in the Evangelise area of PEI definitely support this view as does work by Stewart Perry and Mike Lewis who say that communities ultimately need to build a mix of organizations that target special categories of individuals through to those that work with a heterogeneous and scattered base of residents and institutions over a large geographic area.. Co-operative structures are adaptable throughout such a continuum of scope and scale. For example, the structure is used in certain situations to provide home care services to specific groups including the elderly, physically handicapped, and others requiring care in their residences. One can contrast this to the use of co-operative structures to provide health care at a more general level to respond to diverse needs in many communities or even to a region.
This provides strong backing to the view of the committee that:
"Co-operative development professionals together with local community residents and members of existing community organizations should lead the process, with governments and other stakeholders as part of an internal and external community support structure."
"Co-operative apex organizations and applicable government agencies would compile the stories of what is happening across the country and make these available on a website available to all communities. A list serve could be created if the community participants feel that it would be useful"
IV What are the impediments?
The Co-operative Sector have effectively documented the impediments to the use of co-operative structures in any community economic development situation and these would correspond with the Committee's analysis. These impediments are as follows: lack of familiarity with model; image of co-ops: lack of capital; resistance to model; not always included in government programs and policies; low number of experienced co-op development people and ongoing support for new co-operatives; and, other issues particular to rural and remote communities.
The following tables set out respective roles of the Co-operative Sector and Government in confronting these impediments.
1. Visibility and Awareness
| Impediments | Role of Co-op sector | Government Role |
|---|---|---|
| Lack of familiarity with the model, not an alternative that comes to mind along with other forms of organizing a business | Develop own organs of
communication and
education: Atlantic
Co-operator.
Eg. Worker Co-operative Development Fund (WCDF) presentations to interested groups; Nova Scotia Co-op Council; credit union schools programs |
Government should ensure
that citizens have the
opportunity to choose the
business structure that best
meets their needs. Eg. In 1999 an information kit on co-operatives was developed for the Canada Business Service Centers |
| Image of co-operatives that they are unwieldy, and/or are unprofitable, and /or are yesterday's solutions to today's problems - resistance to model | Organize forums and develop
relations with the media,
promote co-operatives within
the various constituencies. Eg.Women Work in Co-ops Conference (Vancouver, 1998) attracted women in new and emerging co-ops, and those interested in hearing about the model; youth camps and programs (CCA - regional offices); media coverage (Co-op Atlantic's tender beef) winning national prize. A recent public opinion survey undertaken by CCC & CCA demonstrate a highly favorable perception of co-operatives by Canadians. Fund student honours level and post-graduate research. Eg. Various bursaries: Laidlaw, Bromberger, etc. |
Consideration should be
given to innovative uses of
co-operative structures to
respond to current public
policy objectives.
Eg. In 2000 a study was undertaken with financial support from Indian and Northern Affairs Canada to look at the role of co-operative structures in the development of aboriginal communities. |
2. Resources for new start-ups
| Impediments | Role of Co-op Sector | Government Role |
|---|---|---|
| Lack of capital | Develop venture capital loan
sources and advise on
innovative structures for
attracting and pooling
capital.
Eg. Regional Co-operative Development Center (RCDC) Community Catalyst Fund in Moncton ; Innovative structures - New Generation co-ops, multi-stakeholder co-ops |
Equitable treatment should
be afforded co-operatives to
ensure that they have access
to the fiscal tools necessary
to build a strong financial
base. Eg. The new Canada Co-operatives Act provides cooperatives with the same tools available to other forms of enterprise to ensure appropriate levels of capital. Phase II Co-operative Project funded by CARD and the co-op sector will examine the capitalization issues of co-operatives, particularly agriculture co-operatives. Régime d'investissement coopératif in Québec. |
| Not always included in government programs and policies aimed at businesses and general employment policy | Monitoring via CCA and CCC, provincial councils, participation in conferences with Govt. people, | Co-operatives should be
treated on a basis no less
favorable than that afforded
to other forms of enterprise. Eg. Application forms for Environmental Innovation Project funds, and for Information Technology funds that specify type of incorporation should include co-ops. |
3. Technical expertise to support co-operative development
| Impediments | Role of Co-op sector | Government Role |
|---|---|---|
| Lack of experienced and knowledgeable co-op developers | Identify existing pool and
provide training for
interested parties.
Eg. WCDF ) Work with other educational institutions. B.C. Institute's of Co-operative Study's Registry Broaden contacts outside of co-ops. Les coopératives de développement régional in Québec. Involvement in Community Economic Development (CED) networks and educating community developers regarding co-op potential and existing successes) |
Take affirmative action in
areas of co-operative
development that contribute
to public policy objectives. Eg. The worker co-operative revolving fund has a technical assistance component. This program targets areas with high unemployment. The CARD Phase II Coop project will provide some leadership training to Boards of Directors of Co-operatives. The recently announced Federal Strategic Investment Fund for Co-operative Development will support co-op development capacity |
| Ongoing support once co-op is in place | Provide such support as
necessary for existing co-operatives. Eg. Co-op Housing Federation and its programs; Worker Co-operative Development Fund (WCDF); Research Institutes partially funded by co-op sector. Establish networks of co-operative leaders. The development of a federated structure for all sectors in Québec. |
Co-operatives should have
access to the same ongoing
support services that are
available to other types of
enterprise.
Eg. Research tax credits and export support programs. |
4. Impediments particular to rural and remote communities
| Impediments | Role of Co-op sector | Government Role |
|---|---|---|
| Limited tax base | Develop and promote models for making efficient use of available resources. Eg. community co-op model, multi-stakeholder model. | Citizens in rural and remote
Canada should have
equitable access to services
compared to that enjoyed by
their urban counterparts. Eg. Infrastructure Program. |
| Social capacity/avoid burnout of the existing leadership of small communities | Broadening the base of
community participation by
providing opportunities to
participate at various levels
to learn skills. Eg. Director development and training courses available because of co-op efforts, and director participation funded by individual co-ops; Metro Credit Union and the Social Audit Committee as a recruitment base for Board candidates Desjardins initiative on coopération at the community level |
Support community capacity
building approaches. Eg. The Rural Development Initiative. |
| Isolation/distance | Work to overcome isolation
by creative use of
communications
technologies, conferences,
and distance learning. Eg. Credit Union Central annual meetings; Credit unions supporting new technology development in communities Eg. In-branch computers and training to use them. |
Citizens in rural and remote
Canada should have
equitable access to services
compared to that enjoyed by
their urban counterparts.
Eg. Broad band - highspeed internet access. |
V Overarching Direction
Despite the impediments discussed above, Co-operative businesses have been able to make a strong contribution over time because they understand how to do business in rural and remote Canada and they take a bottom up approach. Therefore governments should focus their resources for Community Economic Development (CED) and Business Development on business structures which are native to rural and remote Canada such as, Co-operatives, Aboriginal Businesses, and Small and Medium Sized Enterprises (SME's).
However, as was pointed out earlier, co-operatives should not just be looked at as businesses, they should also be seen as a tools for Community Economic Development. Community Economic Development is the process of creating new employment activities, higher household incomes, additional community wealth and improvements in local quality of life, and, balancing economic, social and environmental concerns.
Co-operatives are key vehicles for CED. Co-ops develop local economies:
- lock capital into the community
- have a community ownership structure
- employ local people AND develop their skills and capacity
- capture economic benefits that may not work in the market model
- are accountable to the community
- develop organizational infrastructure and capacity for partnering
- have a strong history of addressing problems of social exclusion, helping the marginalised help themselves
Co-operatives are able to make this strong contribution to rural and remote communities because of the four attributes of co-operative structures outlined in the following pages:
1. Leadership identification, facilitation and training
| Issues and Vision | Co-op Contribution | Examples of Achievement |
|---|---|---|
| Issues
- volunteer burn out - urban-rural skills gap - community capacity building - shared vision and positive momentum - maintain and attract youth - draw on experience of aging population - "bottom up" approach Committee Vision "Co-operatives because of their democratic nature, involve citizens and develop leaders who go on to lead other ventures in the community." |
|
Over 50% of Nunavut's
elected Assembly received
training as elected officials of
their local co-operatives.
Regroupement Québécois des coopérateurs et coopératrices de travail provides youth with experiences where they can learn more about democracy, business management and the world of work. These youth co-operatives composed of 12 -15 young people between the ages of 14 and 17, set up co-operative businesses in order to create jobs for themselves in the community. Co-operation, business management and community participation are all emphasized in these co-operatives. |
2. Opportunity structures in communities (specifically addressing the issues of retention and renewal)
| Issues and Vision | Co-op Contribution | Examples of Achievement |
|---|---|---|
| Issues
- attracting investment - retaining human capital - attracting and retaining businesses - needs of aging population eg. health - infrastructure to access info. highway Committee Vision "The dominance of co-operative structures in serving many rural and remote communities in Canada means that this business type plays a major role in transitioning communities to the 'Knowledge Economy'." |
|
Arctic Co-operatives Ltd.
(ACL) joint ventured with
NorthwestTel and Northern
Aboriginal Services
Company (NASCO) to create
ARDICOM Digital
Communications Inc.
ensuring northern
communities access to the
latest communications
technology (video
conferencing, the internet,
telemedicine and telehealth)
Accessible Technologies is a computer consulting firm offering expertise in multiple operating systems, networking technologies and computer based training. The company is incorporated as a worker co-operative in Westmount N.S. Scotia. |
3. Stewardship of land and resources
| Issues and Vision | Co-op Contribution | Examples of Achievement |
|---|---|---|
| Issues
- sustainable resource base - healthy communities and environment Committee Vision "Co-operative structures represent community interest, including environment, water quality, cultural development, and health services". |
|
In Newfoundland the Gros
Morne Co-operating Society
on Environment brings
together stakeholders
interested in ensuring the
protection of the natural
environment associated with
this UNESCO Heritage Site.
The Cowichan Lake Community Forest Co-operative in British Columbia enables local residents to become involved in the planning, care and use of the resources in their area. The co-operative structure allows the community to manage its forestry resources in a way that creates and maintains employment while taking a responsible approach to the environment. The Glen Valley Organic Farm Co-operative in B.C. has as a vision to feed and educate present and future generations by co-operatively holding, stewarding and sustainable farming our land. |
4. Infill of products and services
| Issues and Vision | Co-op Contribution | Examples of Achievement |
|---|---|---|
| Issues
- needs of aging population - responding to needs of new immigrants - rural mortality rates generally higher - "bottom up" approach - respond to needs of young people and families Committee Vision "Co-operatives are often the only service delivery agent in rural and remote Canada". |
|
A 1998 study by the Centre for
the Study of Co-operatives at
the University of Saskatchewan
entitled, "The Social and
Economic Importance of the
Co-operative Sector in
Saskatchewan" concluded that
Co-operatives behave
differently from other
institutions in terms of pricing,
commitment to community ,
ability to provide certain kinds
of goods and services, and
ability to keep a greater portion
of the value generated within
the local economy in the
community. This was
especially true in smaller and
more geographically isolated
communities.
Federated Co-operatives Ltd. (FCL) and its member retail co-operatives serve some 750,000 members through their more than 300 autonomous retail co-operatives. most of which are located in rural areas. In several regions of Canada, but particularly in the prairies, credit unions have taken over rural bank branches to ensure continuation of service to these communities when these branches would have otherwise been closed. |
VI Recommendations
As has been demonstrated in this paper, co-operatives play an important role in responding to key challenges facing rural and remote communities, both as a provider of services, and as a tool for community economic development. Furthermore, it is important to note that most co-operatives serve their members and their communities with minimal, if any support, from outside groups including government. Therefore, in order to add value to work that is already being done by this sector, the Co-operatives/Rural Working Group recommend that:
- Visibility of the co-operative option as a tool for rural and remote development be increased by ensuring that it is taken into consideration in all policy and program development activities. This would include areas such as the Canadian Foundation for Innovation supporting research and excellence and the Health Transition Fund supporting innovation in healthcare delivery.
- Resources for Community Economic Development and Business Development be focussed on business structures which are native to rural and remote Canada such as, Co-operatives, Aboriginal Businesses, and Small and Medium Sized Enterprises (SME's).
- Cooperatives be treated on terms no less favourable than those accorded to any other enterprise regarding tax treatment of retained earnings, patronage dividends reinvested in the co-operative and other measures in place to attract investment, including various financial products available form Crown Financial Corporations.
- Rural and remote communities have ready access to advisory services for groups who want to form new co-operatives to meet local needs. The recent announcement of $15 million in Federal funding over the next five years will contribute to this item.
- Co-operative structures be considered as one tool for community capacity building in rural and remote communities. Community cooperatives have been found to be a very relevant model of governance for organizing local residents, businesses and NGO's to tackle challenges facing them.
