The federal government is proposing to rewrite the legislation that governs Canada’s federally regulated co-operatives, but it is unlikely to become law in this Parliament.
The new Canada Co-operatives Act would expand the way co-ops under federal rules can raise capital. It would also give co-ops more flexibility in deciding who can sit on boards of directors.
Co-op leaders have been working with government officials for several years to develop the new legislation and support the intent of the amendments, although reaction to the details is still being gauged, said Mary Pat McKinnon of the Canadian Co-operative Association in Ottawa.
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“I’m still getting feedback but in general, I’d say it is what the industry was looking for,” she said. “It is a much-needed modernization of the 1970 legislation.”
Lynden Hillier, executive director of Agriculture Canada’s co-ops secretariat and until recently the senior official at the CCA, said the new legislation is what the co-op sector has said it wants.
However, in the crowded agenda of the final days of the pre-election Parliament, the legislation is unlikely to be called for debate.
“It is just starting its process so obviously if the House doesn’t have a long time to sit … I think it would be difficult for the co-ops legislation to get through all the hoops,” said agriculture minister Ralph Goodale.
McKinnon said co-op leaders are urging the government to get the legislation through quickly.
If it does not happen, “this bill is a clear indication of government intentions and we will be back to the new government to tell them to get on with it.”
The bill contains several major admendments.
- It gives federally regulated co-operatives the right to raise capital from beyond their membership base through investment shares.
- It allows co-operatives to invite non-members to sit on the board of directors, as long as at least two-thirds of the directors are members.
- It gives investment shareholders the right to elect up to 20 percent of the board, if co-op bylaws allow it.
- It clarifies the duties of directors to act in the interests of the co-operative “using the same standard that applies to directors of other modern business organizations.”
- It gives co-ops “modern and flexible legislative tools, such as the right to amalgamate and make arrangements,” according to a government explanation of the bill.
Hillier said the legislation gives a member of a federally regulated co-op the right to “dissent on fundamental change,” including quitting and withdrawing accumulated investment if there is disagreement with a board decision to change the focus or structure of the co-op.
