New legislation to govern Canada’s federally regulated co-operatives requires only the signature of the governor general to become law.
The Senate has approved the Canada Co-operatives Act and it is expected to receive Royal Assent soon. But it will not take effect for some months, according to a co-ops official.
“I’m telling our members late summer or fall,” said Mary Pat MacKinnon, director of policy for the Canadian Co-operatives Association.
Before the new legislative rules apply, a long process of regulation writing, public comment and approval by a cabinet committee must take place.
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“We’ve been involved in the process of drawing up the regulations since last fall,” she said.
New legislation, the first update in close to 30 years, makes it easier for co-ops to raise outside capital, to give non-ownership investors board seats, to merge and amalgamate and to operate in a more competitive business climate.
Assets can be pulled
It also gives dissident members the right to pull their assets out of the co-op if it decides to merge with another or to take a business direction opposed by the member.
MacKinnon said proclamation of the legislation into law later this year could have an early impact on the structure of the co-op sector.
Since federally regulated co-ops covered by the legislation must operate in at least two provinces, she said some co-ops may consider expanding or amalgamating to meet the rules.
“It certainly gives co-operatives more tools if they want to use them,” she said. “And of course, co-ops that have a need for investment capital may consider using it.”
In the longer term, she said many provinces are considering updating their provincial acts.
“Some of them may use the federal legislation as a model and that would affect how smaller co-ops can operate as well,” she said.
Slightly more than 50 co-ops are covered by federal legislation. However, it does not mean some smaller co-ops will not be affected once the bill is proclaimed.
“If there is a little retail co-op in Swift Current, Sask., that is part of Federated Co-operatives, then it will be affected by the new rules,” she said.
