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Results: 1 - 15 of 87
View Pierre Lemieux Profile
CPC (ON)
Thank you very much, Mr. Chair.
I'd like to thank the witnesses for joining us. This has been a very informative study we're doing, and I appreciate your participating in it.
I wanted to follow up with the Assiniboine Credit Union about the CMHC mortgage loans. It's not my area of expertise, but my understanding is that a long time ago, the CMHC approved certain projects and funded the building of these social housing projects. I consider that to be a high-risk endeavour just because, as you were mentioning, there was no capital you could actually put your hands on. Indeed, it hadn't been built yet. They then built the loan into a long-term mortgage to perhaps reduce the cashflow burden on the social housing cooperatives. Then you made a recommendation that CMHC should negate the penalties when the social housing co-ops ask to break the terms of their mortgage.
As a financial institution, you've got clients who hold mortgages with you. If your clients came to you and asked to break their existing mortgages with you, would you negate the penalties?
View Pierre Lemieux Profile
CPC (ON)
I do hope your socially minded clientele is paying attention, because what you're saying is important.
There are also sound business decisions that come into effect. Just as you must borrow money from other institutions, other people—bond-holders, etc.—so does the CMHC. If they break their terms with them, there are penalties involved.
I understand what you're saying, but from a business perspective, Canadians expect CMHC to operate under sound business principles, just as your members would expect you to operate. I wanted to make that point.
The other one I want to pursue is the access to financing by co-ops. Over these three days, we've heard generalities that co-ops feel they are somewhat biased against when it comes to accessing financing. But it's hard to determine whether it's the nature of their project, that is, because they're a co-op, or if it's.... As I've asked this question, I've received different responses.
Let me give you the scenario you brought up, of a day care, for example. You have a co-op day care that doesn't have a lot of assets. You're quite right that because they don't have assets or capital as collateral, they're considered perhaps to be a high-risk loan so it's hard for them to seek financing. I see that.
I'm thinking, too, that there are non-co-op day cares that are in exactly the same position. It's not really the fact they would do it for the non-co-op but not for the co-op; I think it's in the nature of the field in which they are operating. Whether or not you're a co-op, you're going to have a struggle finding financing in that field.
I've also made this point with previous witnesses with respect to new businesses. They don't have a lot of collateral either. Finding financing is probably the number one challenge of any non-co-op business as well.
Am I correct in what I'm saying, in that, as a lending institution, there isn't a built-in bias against co-ops but it very much depends on the nature of their business? If they were compared to a non-co-op business in the same type of scenario, they would be treated equally.
View Pierre Lemieux Profile
CPC (ON)
View Pierre Lemieux Profile
CPC (ON)
Thanks very much, Mr. Chair. And thank you for being here today.
As I mentioned to our last group, this has been a really valuable couple of days. We've been able to really focus on co-ops and their role in Canada. And I must say that it's really encouraging to see the strength of co-ops on the ground. We've heard, from numerous co-ops that have come in front of us, about their growth, their strength, how well they're doing, and how they're contributing to the economy. I'm glad to hear that this is continuing in the discussions we're having now.
I wanted to make a comment to Jodie about the financial co-ops and the federal regulations. The regulations have been gazetted. There's a 30-day comment period. Your comments are welcome. Of course, they'd have to be filed through the gazetting process. The point is that there's a 30-day window open as of July 6, when they were first published, and all feedback is welcome.
I am interested in the Concentra model or the model of co-ops that basically offer more than just financial services. They offer financial services, groceries, gas, and a number of different things. What's the general business model they're using? In other words, is it just one co-op offering a number of services? Or is there an umbrella co-op with sub-co-ops underneath, each one specializing in a particular area, particularly given the difference between, let's say, financial services and goods and services such as gas and groceries? Could you comment on the business models and what you've seen?
View Pierre Lemieux Profile
CPC (ON)
View Pierre Lemieux Profile
CPC (ON)
Do you never see a co-op model where goods and services, including financial services, are offered under a single co-op? In other words, their membership is not that of other co-ops, with each one providing a service? Rather, their membership is people generally and one co-op is offering them financial services, and goods. Do you ever have that kind of model?
View Pierre Lemieux Profile
CPC (ON)
View Pierre Lemieux Profile
CPC (ON)
Okay.
On the state of financial cooperatives in Canada, certainly the impression we've received from the witnesses come is that, first of all, financial cooperatives are successful. Second, they seem to be responsive to financing requests from other co-ops partly because they're a co-op and partly because they try to find innovative solutions to barriers, I suppose, that might exist to co-ops seeking financing.
Would that be the experience here?
View Pierre Lemieux Profile
CPC (ON)
View Pierre Lemieux Profile
CPC (ON)
That has been my sense, that financial cooperatives help other cooperatives.
View Pierre Lemieux Profile
CPC (ON)
Thanks, Chair.
And thanks to our witnesses for being here.
Actually, I want to provide a little bit of a preamble on how impressed I think each committee member is here by the strength of co-ops. We've been receiving a very positive and cohesive message from all of the different-sized co-ops involved in all of different sectors of the economy. The growth has been impressive. I'm thinking of growth in balance sheets. I'm thinking of growth in assets. I'm thinking of growth in membership. We now have 9,000 co-ops, with 18-million members across Canada. So it's very encouraging.
Of course, I think Mathieu mentioned that a co-op is more than twice as likely to survive an economic downturn or difficult economic circumstance as a business, which is also quite remarkable when you think about it.
I just want to touch on what Madame Blanchette-Lamothe was talking about because there was tough talk about the CDI, or the co-op development initiative. Just to correct the record, it wasn't cut, it wasn't cancelled. It just wasn't renewed. It's important to understand the difference because it's been running for two terms of five years, and it simply reached its natural conclusion at the end of its second term of five years. So it simply expired, like all programming does, especially when it's achieved its goals. This is, I think, what we have heard, as a committee, in terms of co-ops. They have grown. We had a witness here just yesterday, I think, saying that in Quebec over the last five years 595 new co-ops have entered the scene. That's astounding.
The challenge we have as government is that we find ourselves in a $23.5 billion deficit, which is roughly 8% to 10% of the revenues of government. This is a very important factor because difficult decisions must be made. I don't think anyone recommends running with a 10% deficit.
In fact, that is my question. I already know the answer, but I'll put the question to you, Mr. Marshall.
Do you operate at a 10% deficit? If you did, would your members demand that you rectify this situation, look at your expenses and balance that budget?
View Pierre Lemieux Profile
CPC (ON)
I suspected that. I think it's the same for Merv and Dan. Your association doesn't run at a 10% deficit. My guess is that if you did, your members would demand that it be rectified.
Just as your membership has one vote per member—one member, one vote—one Canadian over the age of 18 has one vote, too. We're responsive to Canadians, and this is what they're demanding. Difficult decisions have to be made, and all three of you know about difficult decisions that have to be made throughout the life of your particular groups and associations.
I did want to touch on education because I think it is really important. We've had a number of witnesses talk about education. I'm thinking of education of the public now. Canadians have a concept of a co-op. It might not be as expansive as it should be, and they certainly might not know the successes that I was just outlining and that we've heard about from you.
I'm wondering about your work with higher level cooperative associations, for example, the Canadian Co-operative Association. Is there basically a budget for advertising education, informing Canadians about co-ops, the success of co-ops, the strength of co-ops?
Just to give an example, I'm in agriculture. I'm watching the Dairy Farmers of Canada. They're running a very strong campaign to educate people about farmers, milk production, all of those types of things. I think it's paying off, as Canadians want to know more about local agriculture. They want to know more about Canadian farmers. They're open to this. I have a feeling they'd be very open to learning more about co-ops—what you bring to the table, what your strengths are, what your successes are.
I'll start with Mr. Marshall again. Do you have a budget for that or, in your discussions with higher entities, do they have a budget for that? And what do you think about that?
View Pierre Lemieux Profile
CPC (ON)
Thank you very much.
Thank you for being here and adding to the great story of co-ops that we've been hearing. Certainly, just to follow up on what Mathieu was saying, financing has certainly been a key issue that's come up over the past three days. I think we've been trying to probe that a little bit because there is a difference of information depending on who is giving the information.
I'll just give you an example. Sometimes when we're talking with co-ops, we'll hear that start-up co-ops have difficulty accessing financing, which I believe to be true.
I also think, though, that small businesses face the same types of challenges. They're high risk. Access to capital is very much a challenge for them. They're in their infancy, really. I'm sure there are many small businesses that are just ready to launch but they can't get the capital funding.
We've had a number of financial institutions here, including the Bankers Association, the FCC, and a number of credit union and credit co-op types of financial institutions, too. I've been asking them this question consistently throughout our meetings, and the answer we've been receiving from them is that although co-ops have certain challenges, when it comes to applications for financing certainly, whether they're a co-op or a business isn't part of the lending institution's decision-making. It seems to be more about the specific type of risk analysis that a lending institution does. Whether you're a small business or a co-op, you will be evaluated based on what you're asking for and what you're offering. That is very much a factor and plays a role in whether they can access credit financing when they're in their infancy.
So I'm wondering if you could comment on that.
Vera, I don't know if you see the business side of that and if you can make that kind of comparison. Is that accurate, what we've been told by financial institutions, including co-ops?
View Pierre Lemieux Profile
CPC (ON)
What we've heard from the co-ops, though, is that the cooperative lending institutions understand the co-op model better. So they understand what you're proposing to them. Certainly the information we've received is that they are more willing to find solutions. You're pitching one solution that might not be palatable. But they seem to be more dedicated to finding other solutions that would work.
Let me just ask one more thing. In my riding, we have a Community Futures Development Corporation. It's not a great big regional development agency. It's a small but effective organization in my riding. They provide funding for things like what you're talking about—a business case or something that defines their mission statement and what they're all about—so that they can actually hire some help to get those fundamental documents that they would take to seek access to funding.
I'm assuming that it must be the same in your areas, as well. There is federal funding available to both businesses and co-ops that are seeking help with those primary steps, which they would then use to seek funding.
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