Fédération des coopératives du Nouveau-Québec

Case Study

Benoît Girard
William A. Ninacs

April 2006
Fédération des coopératives du Nouveau-Québec

Summary

This co-op federation serves a network of 14 member co-operatives located in the remote arctic region of Québec, also known as Nouveau-Québec. The local co-operatives are multi-purpose in nature and most of them provide a wide range of goods and services to their communities—including retail goods, petroleum distribution, tourism facilities, purchase of arts and crafts, postal and airline services, and cable television and internet. The co-ops are owned by approximately 6,000 local Inuit and Cree members, and together the 14 co-ops own and democratically control the Federation.

La Fédération des coopératives du Nouveau-Québec (FCNQ) is based in Montreal and its role is to support the operations and development of its member co-operatives. The federation provides a full range of management, technical and training services—including financial management and auditing, information and computer technology support, staff training, and logistical services related to packing, pricing and shipping goods from Montreal to the northern communities. The federation also markets the arts and crafts of local producers, promotes tourism in the region, and generally represents the interests of the community co operatives.

This detailed case study traces the development of the FCNQ and the northern co operatives, and demonstrates how the co-op model has been an important lever for social and economic development in this region, while fostering a sense of autonomy and control by local members.


Acronyms used in this document

INAC - Indian and Northern Affairs Canada
KRG - Kativik Regional Government
HBC - Hudson's Bay Company
CCQ - Conseil de la coopération du Québec
FCNQ - Fédération des coopératives du Nouveau-Québec


Table of Contents

Foreword
Introduction
Methodology
Context
What is the FCNQ?
Issues
Challenges
Conclusion
Bibliography


Foreword

This case study is part of a series of seven independent case studies commissioned by Agriculture and Agri-Food Canada's Co-operatives Secretariat.

The seven co-ops included in this research series are geographically spread across Canada and geared to six priority sectors, namely:

  • agricultural value added;
  • access to health and home care;
  • economic development in rural, remote or northern communities;
  • Aboriginal community development;
  • immigrant integration in Canadian communities;
  • community solutions to environmental challenges.

The general aim of the series of seven co-op case studies has been to review and understand the co-operatives' special administrative practices and responses to specific challenges or opportunities as they arise. The case studies series will enable co-operative leaders to form a better understanding of the problems co-ops face nowadays. Moreover, the co-ops themselves will be in a better position to confront challenges and take advantage of opportunities by noting the responses of other co-ops. Collectively and individually, these case studies will provide directions to serve as tools for building and innovating within the co-operative movement.

This case studies series was developed in conjunction with an advisory steering committee formed by the Co-operatives Secretariat. It is made up of individuals from various backgrounds connected with co-operative development, such as business and community economic development, and bringing a wealth of varied expertise.

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Introduction

This case study focusses on the Fédération des coopératives du Nouveau-Québec (FCNQ). The topic of this study reflects the priority sectors of "economic development in rural, remote or northern communities" and "Aboriginal community development."

We have chosen to feature the FCNQ because its experience shows a remarkable example of co operative development taking place in a specific cultural context and a region remote from big cities. Indeed, the success of the co-operative movement represented by this federation and its fourteen affiliated co-ops has never flagged over its five decades of existence.

Co-operatives hold an important place in Nunavik's economic and social environment. Starting with the vision of pioneers facing a turning-point in their history, they have been a preferred tool for local groups to gain control of their future by easing their adjustment to the new social, political and economic context replacing the old. With help from the FCNQ, they have managed to prosper and the FCNQ is their main link to the economy of the South.

In this case study, after a brief description of Nunavik's geographic, historical and social setting and the FCNQ's organization and activities, we will review some of its main issues from the standpoints of co-op development, the fit between the co-operative model and Inuit culture, and local development.

This case study is too brief a tour of some very rich material. We make no claim to cover it in depth. What we have tried to bring out is how the co-operative tool represented by a federation has been used in a special cultural, economic and geographic context as a lever for social and economic development that has fostered a greater independence in the population served by its member co-ops.

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Methodology

The sources of information for this study were basically the following: interviews with stakeholders involved with the FCNQ, presentations of the FCNQ and all of its member co-ops and, lastly, outside documentary sources.

The stakeholders we questioned all work for the FCNQ except for Mr. Peter Murdoch, who is retired but served as its general manager for a number of years.

The non-directive interviews were fine-tuned for each stakeholder with reference to her/her area of activity and past experience. Questions generally covered the following aspects:

  • Nunavik's co-operative development dynamic.
  • The impact of co-operative development on local development.
  • The fit between the co-operative model and local Inuit culture.
  • The FCNQ's role and range of services.
  • Relationship with government agencies.
  • Co-ops' integration and involvement in their local communities.
  • The FCNQ's organization.
  • Education in co-operation and the co-op successor group.

Beyond these interviews, we reviewed a number of documentary sources on the following topics:

  • Nunavik from the social, economic and political standpoints.
  • Aboriginal co-operatives in Canada.
  • The FCNQ seen by various writers.

Finally, the FCNQ's own stakeholders gave us documents that included financial data for the Federation and the co-operative movement it represents and descriptions of its services and organization.

Context

Geography

Nunavik is the name of the northernmost region of the Province of Quebec that rises above the 55th Parallel. This is a vast area of 450,000 km2, almost one third of Quebec's total area. The climate is tough and vegetation limited. Average temperatures range from 12°C in summer to a wintry -24°C.

The current population is slightly over 10,000. The density is 44 km2 per capita compared to 5.3 people per km2 for Quebec as a whole. It is 91% Aboriginal with a strong Inuit majority. Compared to Quebec as a whole, the birth rate is twice as high in Nunavik and the population is very young with 60% under age 25. Inuktitut is the main language spoken. The Inuit also use English and French for communicating with the outside world (Statistics Canada, 2001).

The people live in 14 municipalities scattered along the shores of Hudson Bay, Ungava Bay and Hudson Strait. The four biggest centres are Kuujjuaq, Inukjuak, Puvirnituq and Salluit.

History

The Inuit have occupied this land for over 4,000 years. They were first in contact with Europeans and later established relations with Canadians over a period of almost three centuries. These relations featured the fur trade. Beginning in the 1950s, the traditionally nomadic population gradually settled down around the trading posts founded by the Hudson's Bay Company (HBC).

The economy of the North in the second half of the twentieth century developed mainly around relations with the Canadian government and its goal of asserting sovereignty over these lands. Meanwhile, the Quebec government began to play an increasingly active role with northern peoples when it initiated projects involving the use of water and in particular the construction of hydroelectric dams.

In 1975, the Quebec government signed the James Bay Agreement giving its Cree and Inuit signatories land rights and cash royalties in exchange for the right to develop natural resources on a major part of the territory.

Economy

Nunavik's economy is largely dependent on government funds granted by the various programs and royalties generated by the fund set up when the James Bay Agreement was signed.

Contrary to popular belief, the Inuit today earn their livings by paid work. Wages as a percentage of total family income are above what is found elsewhere in Quebec. But it is true that the government is very present in Nunavik, not merely because of transfer payments but also as the chief employer (Duhaime, 2004).

Indeed, as employers, governments are in first place, followed by health and educational services with the wholesale and retail trades in third place. People involved in activities connected with natural resource development, including the marketing of furs, are in a minority. Lastly, a few people work at the small-scale production of sculptures, handicrafts and prints.

Nunavik's average wage is lower than in the rest of the province although the cost of living is much higher. The Nunavik unemployment rate is 14.4% compared to 8.2% for Quebec as a whole. Part-time jobs are proportionately more numerous in Nunavik, where job shortages rule out the labour market integration of all working-age youth and people often have to accept part-time work. As well, many young people do not finish high school. Without university degrees, a lot of jobs are out of reach and taken by outsiders (Duhaime, 2004).

Life expectancy is ten years lower than the national average. There are various causes for this, including remoteness from health centres, tobacco and alcohol use and a high suicide rate.

The food basket costs 60% more in Kuujjuak than in Montreal (INAC, 2006). There is a housing shortage and home construction costs are high. Most families rent.

Politics

The Canadian government manages its relations with northern populations through Indian and Northern Affairs Canada (INAC). The Quebec government has created its Secrétariat aux affaires autochtones to handle political relations and participates in various health, education, housing and other services.

A number of years ago, the Inuit chose in a referendum not to form reserves but municipalities governed by councils elected in accordance with the Quebec Municipal Act.

The territory is administered and represented by a few regional institutions.

Makivik Corporation

Makavik Corporation was created by the James Bay Agreement. This assembly of Nunavik community representatives has the job of administering the $90-million fund under that agreement. It is headed by an elected 16-member council with five members forming the executive.

Makivik Corporation uses its financial resources to promote the economic well-being of the population, promote and protect Inuit culture, stimulate the economic development of its society and stimulate the development of Inuit communities, businesses and resources.

It also plays a political role, representing and claiming Inuit rights from the provincial and federal governments.

Kativik Regional Government

The James Bay Agreement also led to the creation of the Kativik Regional Government in 1978. This is a supramunicipal assembly of representatives of 14 Inuit municipalities and the chief of the Naskapi village of Kawawachikamach. This institution plays a role in organizing communications services, legal affairs, municipal management, employment, training, income support and child care, public security (police and emergency preparedness), municipal public works, renewable resources, the environment, land-use planning, research, economic development, transportation and recreation.

Kativik School Board

Nowadays, every Inuit village has its modern school that goes from kindergarten to Secondary V (including vocational training). The primary and secondary programs give a preponderant role to Inuktitut and Inuit culture.

Nunavik has no postsecondary education. Students wishing to continue their education have to go south.

Nunavik Regional Health and Social Services Board

This board oversees a network of dispensaries in various Nunavik communities and two health centres providing the services of a local community service centre and youth protection centre, hospital for short-term and long-term cases and rehabilitation centre for young people with adjustment difficulties. It also co-ordinates travel for people who have to go south for treatments requiring more complex resources.

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Kativik Regional Development Council

This non-profit agency was set up in 1980, also as a result of the James Bay and Northern Quebec Agreement. It is headed by a 14-member board of directors drawn from the KRG, Makivik Corporation, Kativik School Board, Nunavik Regional Health and Social Services Board, Avataq Cultural Institute, the Fédération des coopératives du Nouveau-Québec and Taqramiut Nipingat Inc., New Quebec's public radio and television broadcaster. It plays an advisory role for governments and co-ordinates regional development initiatives.

Towards a Nunavik government

Following a similar process to the one that led to the creation of the Nunavut government, Nunavik is moving towards independent government. At present, Nunavik's elected representatives are about to sign an agreement with the two levels of government that will initiate this process. The new agreement will have to fit in with existing arrangements like the James Bay Agreement (INAC, 2005).

Co-operative development in Northern Canada

Background and current situation

Canada has more than 130 Aboriginal co-operatives, more than half of them located in the country's northern regions from Yukon to Labrador by way of Nunavut and Nunavik. This co operative movement has its origins in the 1950s. Strictly speaking, the co-operative is an imported idea. It was introduced with support from religious communities including the Oblate Fathers and from Canadian government officials.

Development context

During the 1950s, the Inuit population settled down and became more dependent on outside food supplies. Their sole source was the Hudson's Bay Company (HBC), which had the supply monopoly and was the only buyer for local products.

When first formed, co-operatives were perceived by the Inuit as a better way to sell artworks and furs and control their incoming goods and foodstuffs. Although most co-operatives were initially headed by outsiders, the Aboriginals were trained and gradually took over the reins of their co ops. To increase their resources, they formed federations. Two federations emerged in the 1960s, Arctic Co-op Limited in the Northwest Territories and the Fédération des coopératives du Nouveau-Québec in Northern Quebec. These federations "have been instrumental in stabilizing the northern co-operatives, in developing system-wide accounting, marketing, and employment standards, and in presenting a united voice to governments" (Co-operatives Secretariat, 2002).

In Northern communities, virtually every village has its co-operative. As a result, residents are four times likelier to belong to a co-op than other Canadians. Co-operatives have been warmly welcomed as providing the Inuit with a way of getting away from the HBC monopoly and gaining control over some of the commercial activity in the country's North.

Background of Nunavik co-operative development

The very first co-op in Northern Quebec was started at Kangiqsualujuaq (Georges River) in April 1959. Over the next two years, four more co-ops emerged at Puvirnituq, Kuujjuaq (Fort Chimo), Kuujjuaraapik (Great Whale River) and Kangirsuk (Payne Bay). After this, a good number of communities created local co-operatives.

The federal government helped with the start-up of the first co-ops in Nunavik (and the Northwest Territories) except at Puvirnituq, where the initiative of the local people was supported by Father André Steinmann, an Oblate missionary who had lived among the Inuit for a number of years.

In that community, a historical event strongly influenced the motivation to create a co-operative. Around the mid-1950s, the Inuit living in Puvirnituq suffered from a famine that claimed several lives. This event is embedded in grassroots history. Rita Novalinga, who was born in this village and is now the FCNQ's general manager, remembers: "While my folks were dying of hunger, there was food in the HBC warehouses next door, but they didn't want to share it for want of money to pay."

At the outset, the main work of the co-ops was to build a marketing network to sell the artworks of Inuit sculptors in the markets of the south. The money from these sales was used to buy foodstuffs and materials that were then sent to the Nunavik co-ops for resale to their members.

The co-operatives became the biggest private employers in Nunavik, coming second after public and quasi-public services. Today they have more than 220 employees. There are also 95 volunteer directors. The employees and directors are all Inuit or Cree (ILAGI, 2005).

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What is the FCNQ?

Background

The Federation was founded in 1967 with five member co-operatives. The first general meeting was held in Lévis. The new Federation was supported by the Mouvement des caisses Desjardins and the Conseil de la coopération du Québec (CCQ), assigning a full-time resource, Peter Murdoch, who later became the FCNQ general manager for a number of years.

The head office was initially set up in a Lévis building loaned by Desjardins for around ten years. After that, the FCNQ moved its headquarters to Ville Saint-Laurent to be closer to its operations, which were centred in the Montreal area. For a decade now, the Federation has been established at Baie-d'Urfé in western Montreal Island.

Financial history

From its inception, the FCNQ has seen its business increase steadily to reach an average 7% a year for the period 1998-2005.

The start-up activity of selling artworks did not follow the same pattern. It peaked in the early 1980s and fell slightly thereafter. However, the sale of artworks remains worthwhile: every dollar earned is reinvested in goods that are then resold at a profit through the network.

As of December 31, 2004, the FCNQ had assets of $64.72 million and recorded sales of $72.25 million for a gross $6-million profit.

Table 1: Percentage shares of FCNQ business sectors

Merchandise - 52.8
Petroleum products - 43.4
Construction - 2.9
Local handicrafts and art - 0.9

Source: FCNQ, 2005

The FCNQ's Baie-d'Urfé operations employ about 115 full-time and thirty part-time workers, most of non-Inuit origin.

Membership

The FCNQ's fifteen members are:

  • Akulivik Co-op Association
  • Aupaluk Co-op Association
  • Fort Chimo Co-op Association
  • George River Co-op Association
  • Great Whale Co-op Association
  • Inukjuak Co-op Association
  • Ivujivik Co-op Association
  • Koartaq Co-op Association
  • Payne Bay Co-op Association
  • Povungnituq Co-op Association
  • Salluit Co-op Association
  • Tasiujaq Co-op Association
  • Umiujaq Co-op Association
  • Wakeham Bay Co-op Association
  • Wemindji Co-op Association

The FCNQ also owns some subsidiaries to deliver certain services:

  • Arctic Adventures to organize tourism activities;
  • FCNQ Petro to manage the northern petroleum facilities;
  • Ilagi Internet Service providing Web access;
  • Nunavik Co-operative Hotel;
  • Voyages FCNQ.

Governance

The Federation holds two general meetings a year. Every member co-op sends at least two delegates chosen by its board of directors.

The FCNQ is headed by a 16-member board of directors. A seven-member executive council is chosen from these members and the individuals holding the general manager and assigned secretary positions sit on the board automatically.

General management

This function, beyond a manager's position, includes an assistant manager's position. It is responsible for carrying out the policies and directives of the board of directors and executive and generally supervising Federation activities.

Activities

The Federation supports its members' development and attempts to respond to their needs and initiatives. In fact, Nunavik co-ops are involved in a wide range of commercial activities, member services and development projects. Some co-ops are more diversified than others.

To support the many operations and the development of its network of member co-operatives, the FCNQ has built up a wide range of services that reflect the multiservice background of the Nunavik co-ops and the special conditions in which these co-ops function. Many of these services have to do with the co-ops' operational organization and the flow of products and services from the South to the co-ops of the North.

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Co-operatives' operational organization activities

  • The audit service helps member co-ops with financial audits, the production of reports and follow-ups. This service also recommends accounting system improvements to the FCNQ board of directors.
  • The retail development service trains staff working in sales.
  • The co-operative management service provides guidance and advice for co-op administrative organization, personnel management and technical training. This service also administers member loans and funds transfers and helps member co-ops with their medium- and long-term planning.
  • The computer service provides comprehensive logistic support for co-ops organizing and running computer services. It also delivers training.
  • Technical services offer a planning and management service for buildings belonging to the Federation and member co-ops and equipment assigned to operations, such as vehicles.
  • The accounting service is responsible for monitoring accounting operations for the Federation and member co-ops. The accounting service makes sure that co-ops are operating in accordance with recognized, standardized accounting principles. Accounting data are sent to and processed directly by the Federation. The communications networks can send information in real time.

Purchasing activities

  • Buying, packing and shipping: The FCNQ acts as a wholesaler for its co-operatives. On food services, it partners with the Colabor network, and its hardware comes from Home Hardware. The Federation receives products at its warehouses and ships them to the co-ops.
  • Tourism services development supports the growth and promotion of the tourism activities organized by some co-ops. It provides the logistics for tourist services like accommodation, outfitting and hunting and fishing parties, and promotes products internationally.
  • Artwork sales and marketing promotes all of the co-operatives' art and handicrafts on international markets.
  • The petroleum products service ensures the flow of various petroleum products, manages storage facilities and plans inventories and deliveries at the required times.
  • The telecommunications service ensures television and Internet service and technical support for telephone networks.
  • The receiving and distribution service is responsible for articles received from co-ops and their delivery to Federation clients.

Representation role

Beyond its diversified services, the FCNQ plays a representative role for the Nunavik co operative movement to governments, partners, clients and suppliers. The FCNQ is also a member of the CCQ.

Moreover, when the co-ops are launching new projects, the Federation works for their success by arranging the necessary resources and representing these initiatives to the various levels of government and financial institutions. For example, the FCNQ is currently working to establish an internal financing fund. This involves approaching governments and financial institutions.

Issues

Co-operative development

Member participation

Member participation varies from co-op to co-op. It is more difficult in the bigger communities. In the smallest communities, people are more involved in achieving their co-op's objectives. Yet the northern social and economic environment is changing and the population is growing. Participation may be affected by this if no incentive is provided.

As part of their duties, FCNQ representatives regularly visit the co-ops, where they can meet the directors and members. They use these tours to build public awareness. Each of these visits is a chance to "remind people of the importance of their co-operative and that they should be proud of it," says Lisa Watt, FCNQ assistant secretary.

Training for co-operative life

Training for co-operative life was delivered informally in the FCNQ's early years. However, it is increasingly obvious that many people have forgotten the significance of their co-operatives. As a result, the FCNQ leaders recently decided to resume this activity on a more formal basis. A co-operative life training project is currently being developed.

Although based on materials used elsewhere, this training is supposed to be fine-tuned to the Nunavik co-ops' needs. The man in charge of co-operative training at the FCNQ, Daniel Murdoch, explains the recommended approach: "To begin with, we will be visiting each co operative and meeting each board of directors to find out what they need. We will also be meeting the general managers. We do not want to impose our methods, only adjust the approach."

Still, special attention will be needed to highlight the success of the Nunavik co-ops and build pride. Interviewees all say that, without education and awareness of co-operative life, the co operative spirit is slowly being lost.

Sensitizing youth to co-operation

The decline in the sense of belonging and co-operative solidarity is increasingly evident, especially among the young. Given their large numbers and future leading role in their society, it becomes strategic to make young people aware of the co-operative life, thus preparing the successor group.

The Federation supports member co-ops in their efforts in this regard. For example, in the communities of Ivujivik and Akulivik, student groups are running small co-operatives that they started themselves. They are making bracelets, belts and other handicrafts. The Federation is encouraging this project by buying their products for resale. The Federation is also currently working with the Kativik School Board to create a co-operative education program for classrooms.

Support for general managers

The co-op leaders play a key role in these organizations. The FCNQ lends them special support in the form of general and specific training in co-operative, personnel and technical management.

The Federation also provides interim services in the event that a manager quits and the co operative does not have time to find a replacement right away. This is a fairly common situation since the skills acquired by these individuals equip them to apply for public service positions.

As well, the Federation's general management organizes a co-ordinating teleconference every month. The point of these conferences is to ensure regular contact among the general managers of the various co-ops, convey information, elicit discussion, create a co-operative feeling and promote mutual acquaintance. In a way, they are developing a community of general management practice among the Inuit co-operatives. Considering the frequent changes in general manager ranks, the regularity of these teleconferences is appreciated.

Vocational training and skills development

The FCNQ, working with its member co-ops, has done much and continues to make a substantial effort to deliver on-job technical training. The co-operative is often the first employer for many young people and the only opportunity they have as they start their working lives. This makes it an opportunity for those who are not going on with their education.

Fit between the co-operative model and Inuit culture

Co-operation as a way of life

According to Jean-Jacques Simard, an expert on Aboriginal matters, the Nunavik co-operatives are not the outcome of a natural process and co-ops are not especially suited to traditional Inuit culture (Faubert-Mailloux, 2001: 218). However, the people we interviewed all said that the impulse to organize existed among the Inuit and co-operation is an inherent element of the culture because people are accustomed to co-operating to survive in a harsh environment. Nunavik's co-operative movement is continually attempting to adjust the co-op model to Inuit co-operative values.

According to Rita Novalinga, the current FCNQ general manager, the Inuit co-operative movement arises from the people and their desire to learn new ways of co-operating as they faced a change in living conditions, a change that came as a threat in the mid-twentieth century. Co-operatives appeared as a tool that gave them some control over their food and equipment supply—in short, over their survival.

The Inuit were not familiar with co-op organizations as such, so it was the structural aspect of the co-operative form that may be seen as foreign to their collective way of life. Their understanding of co-op operation and management was made possible through training and advice from outside stakeholders.

Market economy vs. mutual assistance economy

When the Inuit had formed settlements and set up an external supply system, co-operatives were a tool for learning how to work with the cash-based market economy, whereas traditional economic relations were based on mutual assistance and non-monetary exchange. The story of the Purvinituq famine is eloquent of the contrast between the market and mutual assistance economies. That tragic episode made it necessary to find other ways of doing things. The co-ops thus became the preferred tool for learning the market economy.

Nonetheless, a mutual assistance economy is still alive in the Nunavik co-ops. It is seen mainly in a co-operative atmosphere of mutual assistance. For example, the co-ops have maintained an attitude that makes them more flexible about consumer credit. They also tend to take a more encouraging approach to people in trouble. As well, the mutual assistance economy is seen in the development of projects that serve the collective good. Co-ops' business choices are not always consistent with short-term monetary gain.

As a rule, the FCNQ tries to support its co-ops' projects and initiatives. However, it makes sure, through the work of its various departments, that co-op directors get good information to let them make intelligent decisions.

Conflicts between cultural values and business models

In the co-operative experience, if a clash of values arises between cultural values and good management practices, the priority generally falls to culture. For example, a co-op that has to find a new general manager may choose a less qualified applicant who is given a chance to develop his or her abilities. Co-operatives make choices based on an accepting, patient, encouraging cast of mind.

One worker tells how, in the early years of the FCNQ, the Canadian government exerted pressure to have the co-ops' general managers replaced, finding their work out of step with government policies. The FCNQ refused, even at the risk of losing their funding, because the general managers did not have to be harmed in this business. The government apparently changed its mind. Although these statements cannot be confirmed or disproven, they speak of very real tensions that emerge when the FCNQ feels that a backer is meddling and is determined to resist at any cost.

As well, co-operatives try to help people with money problems. The interviews revealed that the co-ops are very patient with people who owe them money. When someone has a high bill, the co-op workers will begin by explaining the need to repay to avoid weakening his or her co operative. The effort goes to awareness building and group solidarity instead of threats of proceedings. In the end, these people almost always honour their debts.

In the Inuit culture, individual success is less important than that of the group, and prestige goes more to someone contributing to the group's well-being than to the one who amasses the most goods. This means that encouragement will not go to someone who runs the fastest and comes in first: it will go to the group's ability to reach the objective together. For the co-ops, it means taking the time to help a weaker partner and allow him or her to develop at the same pace as the others.

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Co-ops and local development

The quest for independence

From the origins of the Nunavik co-operative movement, control of the co-ops has always been fundamental. At the outset, for want of experience and expertise, the first co-ops were run by outside people suggested by the federal government. The new Federation worked to offset this weakness. One of its first jobs was to set up a training service for co-op general managers and directors to replace the outside executives. The co-operative movement had the same plans for the business leaders at the FCNQ, but the transition there was slower and only recently was they able to find an Inuit general manager in the person of Rita Novalinga, whose parents were among the founders of the Puvirnituq co-operative: her entire childhood was shaped by the life of the local co-op.

The Nunavik co-operatives developed multisectorally. They did not restrict themselves to a specific business sector. This course was set by the co-ops themselves, not imposed by the Federation, though the FCNQ was later asked to help organize the activity and develop networks to launch and promote it. At first vehicles for selling the work of artists and craftspeople, the co ops later ran increasingly big supply chains, diversified into foodstuffs and consumer goods and then went into energy, telecommunications, construction and tourism. The future will likely see the co-ops expand into other business sectors. This diversified thrust is consistent with the co-op mission to provide a development tool that is locally run and responds to local needs and aspirations.

The organization of new services and projects is proof of the vigour of Nunavik's co-operative movement. The tourism and telecommunications sectors prove the co-ops' capacity to grasp new opportunities. Growth in these sectors has required highly integrated FCNQ services. Subsidiaries were created to organize and promote both of them.

Skills development

Employment is a fundamental issue in Nunavik communities as numerous young people reach working age. Jobless youths feel useless and apart. The co-operative movement sees this social challenge as a responsibility and plays an essential role in developing the job skills of the young. Those not finishing high school are often preferred since, as Rita Novalinga stresses: "Those who have the talent to continue have better chances of finding work after they graduate." The co ops try to offer opportunities to the young. Some co-ops develop new activities like the hotel business and tourism to create job openings for them.

Co-op employees are almost all from the home community except at Federation headquarters, where most employees are not Inuit: it is still difficult to keep Inuit in town. The hope is that, gradually, on a 30- to 50-year horizon, the majority of staff will be Inuit.

However, the co-ops have fairly high staff turnover that increases training requirements. Employees who have developed enough skills tend to apply for jobs in better-paid administrative services. The co-ops make a significant contribution to developing job potential. The FCNQ's co-operative training manager, Daniel Murdoch, reckons that about 80% of the adult population has worked for a co-op at some time or another.

Yet this staff turnover brings added costs for the co-ops. The FCNQ's assistant manager, Heng Kun, explains: "The co-operative trains people who go off to work for other organizations where the pay is higher. This costs the co-operative for recruitment and training. Change has a bigger impact at the management level. For basic workers, change is more frequent but has less impact." On the whole, the co-ops take this staff turnover well, feeling that, beyond the expense for the co-operative, there is a significant gain for the community.

Lastly, the FCNQ has developed good support for its member co-ops in their efforts to provide technical training for all sales, handling and co-op management jobs.

Challenges

Taxes on consumption

Since prices are higher than in the south, people find themselves paying more sales taxes (GST, QST) for the same amount of goods and services. The co-ops are calling for tax relief to give Nunavik communities greater parity with the rest of the country, especially since average incomes are not proportionately higher. The subject comes up in meetings with elected representatives. Federation management is working this file in conjunction with Makivik Corporation.

Geographic setting

The remoteness of Nunavik communities from the cities automatically means high carriage costs that raise the price of goods. This is a permanent challenge. The Federation's member co-ops never stop stressing the need to cut transportation costs. The Federation is trying to find innovative ways of handling this problem, including the possibility of working with the Arctic Co-op Ltd that faces the same challenges. Rising transportation costs reflect increases in gasoline prices. The forecasts tell us that these prices will keep rising and thus cause an even greater discrepancy—hence the need for innovative solutions.

Financing

The co-operatives have problems with bank financing since they do not have enough property and their assets have no tangible market value for banking institutions. It is also very hard to verify the value of the inventories that financing is for. The land is owned by the federal or provincial government and managed by local land corporations. Consequently, it is not possible to include land among co-op assets and mortgage it. Banks will almost inevitably require a government guarantee.

To find a solution, the FCNQ is now working to set up a financing fund for its member co-ops to facilitate access to money for both building inventory and exploring business opportunities.

Economic development

The communities' economic development depends on their integration with natural resource activities. Wind energy seems to hold promise and feasibility studies have been conducted in some places. The FCNQ is involved here in partnerships with Nunavik communities. However, this issue has to be looked at in conjunction with the issue of petroleum supplies, since the Federation is the major supplier and developing wind energy would have an impact on demand.

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Conclusion

The co-operatives are tools in Inuit hands, tools they have been able to use and adapt as levers in their quest for independence and the preservation of their identity while building links with the outside. Their experience and multiservice co-op model can serve as an inspiration for isolated rural communities wishing to maintain their local services and acquire economic development tools. Interest is coming from as far afield as Chile.

The role played by the FCNQ here continues to be essential, given such a rich, complex growth story with a range of technical, political, social and cultural factors at play, each intrinsically bound to the others. During this study, we have only been able to touch on certain aspects of the situation that the FCNQ and its member co-ops have to deal with, and we can but imperfectly show how they are attempting to organize this complexity to reflect both co-operative and Inuit values--a challenge they are handling remarkably.

Bibliography

Interviews conducted on March 6 and 7, 2006

Aurel St-Amant, accountant with the FCNQ audit service

Daniel Murdoch, manager of the FCNQ co-operative training program

Heng Kun, FCNQ assistant manager

Lisa Watt, FCNQ assistant secretary

Peter Murdoch, retiree and first manager of the FCNQ

Rita Novalinga, FCNQ general manager


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