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Ottawa looks at legislation upgrade

In the shadow of federal government funding cuts to Canada’s co-operative development program, Parliament has created a special committee that will spend the autumn examining the sector’s potential and needs.

The special House of Commons committee on co-operatives is supposed to report no later than November.

Public hearings will begin when Parliament resumes sitting Sept. 17.

Alberta Conservative MP Blake Richards, who was elected chair of the committee June 19, said co-ops represent a huge economic sector across Canada.

“Obviously co-operatives play a pretty key role in our economy so this is going to be an interesting study and one that I think will be very productive,” he said.

He said co-ops and credit unions are particularly important in rural Canada, including his southwestern Alberta riding.

The committee was established during the United Nations-declared International Year of the Co-op­erative to examine the role of co-ops in the economy and whether the legislative support of the sector should be updated from its 1998 Canadian Co-operatives Act base.

Creation of the special committee on co-operatives, the first in Parliament’s history, came at the suggestion of Ottawa Liberal MP Mauril Bélanger, who resigned his other party critic roles to become the Liberal co-op advocate.

He said in the Commons that one issue to be discussed by the committee will be a proposal to allow creation of co-operative banks.

Co-op sector advocates also will be raising a long-term request that the government create a co-op investment tax credit program that would help the sector attract capital.

Under-capitalization has been a problem for the sector and several times the Commons finance committee has recommended that Ottawa follow the Quebec model and create a tax incentive for individual investment in co-ops.

To date, no federal government has responded to the recommendation, which co-operative officials argue would cost little in tax dollars and attract significant dollars to the sector.

“I don’t want to pre-judge what we will hear but that certainly has been an issue in the past,” said Richards.

The committee begins work several months after the federal budget announced the end of the nine-year-old Co-operative Development Initiative that provided $4 million annually for co-op development.

Staff in Agriculture Canada’s Co-operatives Secretariat is also being cut.

Co-op officials said after the March budget it was a sign of a lack of recognition by the Conservative government of the importance of the co-op and credit union sector, even though the government supported the United Nations’ declaration on supporting co-ops.

Agriculture minister Gerry Ritz said it simply was an indication that the co-operative sector is strong enough to exist without government subsidy.

“With some 9,000 co-ops, 18 million members and some net worth of $350 billion or $360 billion, I think co-ops have a great foundation to continue this work on their own,” he said in the Commons in late May.

Co-operative officials will use the committee hearings to press for more government support, including tax law reform, instead of less.

Richards said the committee had planned to hold hearings across the country but a motion to travel was denied by the opposition MPs last week.

“We will hear from sector representatives from across the country whether we travel or not,” he said.

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