Discussion paper

Towards 2012: Building a Conducive Environment for Co-operatives

Policy Forum on Co-operatives
Discussion Paper

By: The Co-operatives Policy and Research Team, Rural and Co-operatives Secretariat


The 2010 Policy Forum on Co-operatives will be the first in a series of dialogues between the Rural and Co-operatives Secretariat and stakeholders; a first step in paving the way to a more robust public policy environment that is conducive to co-operative development and growth. Information gathered from the Forum and ensuing dialogues will be used by the Secretariat to shape the Government of Canada's policy contributions to the overall environment in which co operatives develop, and set the stage for the 2012 International Year of Co-operatives.

The forum will consist of a number of round table discussions and provide an opportunity for strategic reflection and discussion. Participants will explore what supportive national environment is necessary to improve the capacity of communities to develop innovative co operatives in response to emerging trends. More specifically, participants will explore what public policy interventions, programs, and knowledge can best support Canadians to take full advantage of the co-operative business model to build more competitive, innovative and sustainable communities.

This discussion paper provides a starting point for the dialogue and outlines some considerations for the role of co operatives in responding to the challenges and opportunities that communities face. These discussions will occur through the lens of three key trends: community-based economic development, social innovation and environmental practices. Details on these trends are provided in the appendices.

Canada's Changing Communities

Canadians are facing the ever-changing nature and pattern of risks and trends that change and challenge the way we live and work. The next ten years is expected to see many of these trends intensify, with new and greater pressures on communities. Globalization will continue to subject Canadian enterprises to fierce competition, with implications for the type of industries and jobs available to Canadians. Fiscal restraints faced by governments across Canada and beyond will continue to intensify budgetary pressures and effect responses to social and economic pressures. Canada's aging population will place additional pressures on our workforce and health care system. The news also continues to be mixed for rural communities and regions, with shifts in population and regional disparities increasing and development issues emerging in regions that were once considered stable or even prosperous. At the same time, climate change will continue to prompt awareness and a search for more sustainable choices.

In this context, individuals, communities, organizations and governments are seeking new and innovative ways to manage the evolving pattern of risks and opportunities that surround them—seeking ways to cope, to mitigate risks and/or to innovate and enhance opportunities.

Co-operatives Innovating and Adapting to Change

Co-operatives have a long track record of community-based innovation in response to both emerging changes and persistent challenges. Since the formation of the earliest caisses populaires and agricultural marketing co-operatives in Canada, co-operatives have been formed by people coming together to find new and creative ways of meeting their needs and aspirations. Through the efforts of everyday people, the co-operative model has been widely adapted to new sectors and types of activities, and tailored to address local and regional economic circumstances, local histories, cultures and needs. In these varied situations there are many examples that demonstrate the flexibility and resilience of the model and the role that co-operatives have and continue to play in empowering and supporting Canadians to collectively and innovatively respond to the challenges and opportunities within their communities.

Co-operatives can be a mediating influence on negative and positive pressures created by rapidly evolving social, economic and environmental circumstances, in as far as they are able to seize new opportunities and mitigate risks through innovation and adaptation, as well as by building community capacity and resilience. Community co-operatives that formed to purchase closing businesses, such as grocery stores, lumber mills, and even a ski hill, or the new wave of co-operatives that offer sustainable energy options, and those forming to meet health and social care needs, are concrete demonstrations of this.

Fostering Co-operative Solutions

The future role that co-operatives will play in response to evolving economic, social and environmental trends will be determined largely by the capacity of local communities to innovate using the co-operative model. Even though many emerging trends will play out at a national and global level, the specific impact and the implications for geographic, interest and identity-based communities will vary. The particular assets and resources that each community has to draw on as well as the liabilities they are working with will also be unique to each place and further influence the capacity to innovate.

At the same time, at the centre of a community's capacity to utilize co-operatives is the favourability of the overall environment to fostering co-operative development. This encompasses such factors as the legal and regulatory framework, the relative level of services afforded to co-operatives versus investor-owned businesses and sole proprietorships, the availability of co-operative specific advisory services and financing mechanisms, and other aspects such as past experiences, values and beliefs around collective action.

Although co-operatives are first and foremost community-level initiatives, governments can influence the supportive environment for co-operative growth to a significant degree. This is evident in many jurisdictions with particularly strong co-operative sectors, such as the province of Quebec, the Emilia Romagna region of Italy, and the Basque country in Spain. In these places, governments have responded to civil society initiatives in a way that allowed people to build and capitalize on strong co-operative foundations that were already formed. Lessons from these regions point to the potential of structural collaborative mechanisms that allow government, co-operative and other partners to work together and contribute to growth and sustainability. They are consistent with the international trend towards place-based policy interventions that facilitate collaboration and partnerships to help align investments and activities across the public, private and non-profit sectors in order to achieve more robust results.

Looking Forward

While emerging trends present challenges and risks to communities, where there is a capacity in place to take action, these challenges and risks can also provide new opportunities and avenues for innovation. The Rural and Co-operatives Secretariat would like to explore how to better enhance the capacity necessary to support co-operative innovation in Canada and in doing so, facilitate the building of an environment conducive to co-operative development and growth.

The primary focus of the forum will be to explore:

  • What supportive environment is necessary to improve the capacity of communities to develop innovative co-operatives that respond to emerging community challenges and opportunities?
  • What public policy interventions, programs, and knowledge can best support Canadians to take full advantage of the co-operative business model to build more competitive, innovative and sustainable communities?
  • What are the key obstacles and/or facilitators to co-operative innovation and development that lend themselves to public policy intervention?

As a result of the forum and the ensuing dialogues with additional stakeholders, the goal of the Secretariat is to confirm and launch our key priorities by the Fall of 2010 in preparation for 2012.

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Appendix A: Co-operatives Responding to Social and Demographic Change

Looking forward, it is to be expected that Canada will continue to undergo complex social processes that have significant impacts on communities. Key trends that will have particular relevance to co-operatives include changes in the composition of our population (the aging of Canadians overall, immigration, the young and growing Aboriginal population), and processes such as the rural to urban shift, and deepening inequality. Many of these trends will be linked inextricably to economic and environmental changes, and will call for creative and integrated approaches.

An Aging Population

Canada's population is aging, due to lower fertility rates and higher life expectancy. The baby boom generation is expected to retire in the next twenty years, with Canadian seniors (adults 65 and older) numbering 6.7 million in 2021. Seniors are projected to represent approximately 23% of the population by 2031, compared to 13.7% in 2006.

Implications for Canadians and Communities

  • Widespread effects on the Canadian economy: slower employment growth from a shrinking workforce, and potential labour shortages, particularly in areas such as health and long-term care
  • Higher rates of health care utilization and more need for caregiving and social supports, assisted living, etc.
  • The cost of maintaining pensions and health coverage could potentially squeeze expenditures in other areas, prompting a search for alternatives
  • Demand from retirees for new ways to participate in society and for a new mix of recreational opportunities and other services
  • Possible financial implications with impacts on local economies (changing spending habits—consuming rather than saving, potential impacts on intergenerational transfers of wealth and seniors' poverty, especially persistent poverty among women)
  • Increased need for business succession planning that considers local requirements and economic impacts

Immigration and a Young, Growing and Concentrated Aboriginal Population

By 2017, one in five Canadians will belong to a visible minority group, with the percentage as high as one in two in some cities. The aboriginal population is also growing faster than the non-Aboriginal population, with 48% of the Aboriginal population under 25 years old.

Implications for Canadians and Communities

  • Rising ethno-cultural, linguistic and religious diversity poses new challenges for continuing to forge an inclusive and cohesive society; increased importance of organizations that bring people together, foster a sense of shared identity
  • Persistent inequalities between immigrant and visible minority communities and other Canadians may increase social tensions and will put economic and social integration issues front and centre; will highlight need for fair employment/ living wages
  • Marginalization of some ethno-cultural groups will challenge the notion of equality of opportunity and full participation in Canadian society, with a search for more equitable and democratic solutions
  • There will be potential for Aboriginal people to move further into the labour market and improve socio-economic prospects, with potential for application of alternative business models
  • Increased mobility (on/ off reserve, urban/ rural) may require communities to address issues associated with displacement, alienation and loss of identity
  • Increasing importance of immigration for maintaining the Canadian labour force

Poverty and Inequality

While poverty rates in Canada have been declining (at least until the start of the recent recession), income inequality has been increasing. Children and the working poor continue to fall through the cracks and Canada has performed less well in relation to both poverty and inequality than other developed nations. New immigrants are not advancing economically as quickly as in the past, and poverty rates among recent immigrants are on the rise.

Implications for Canadians and Communities

  • Over the short term, there is likely to be significant pressure to re-examine mechanisms for addressing the needs of the "have-not" segments of Canadian society, placing new demands on policy makers and providers of services
  • Civil society organizations will continue to seek new ways of addressing persistent inequalities and the socio-economic impacts of persistent disadvantage
  • The financial and non-financial barriers to post-secondary education may be highlighted, particularly as demands for an educated workforce increase
  • The recent recession may highlight vulnerabilities and gaps in Canada's approach to at-risk populations

Rural to Urban Shift

The 2006 census showed that 81% of Canadians live in urban areas with a population of at least 10,000. From 2001 to 2006, the census urban population grew by 6%, twice the rate of growth in census rural areas in the same period. Thus the urban share of Canada's total population continues to increase and by 2020, over 50% of Canada's population will reside in Canada's six largest cities.

Implications for Canadians and Communities

  • Depopulation of Canada's rural areas will make it increasingly challenging to maintain vibrant rural communities, as communities lose human, social and financial capital, all important ingredients of local development
  • Continuing to adequately address the social needs of rural Canadians will become more challenging (e.g. there will be difficulty in maintaining infrastructure such as hospitals and schools)
  • Some city regions will become economic engines and concentrated centres of human capital, but they will also experience financial pressures on municipal infrastructures and government
  • There may be greater inequality between rural and urban areas, and more social stratification within urban centres. E.g. the number of concentrated low income and distressed neighbourhoods has been steadily growing in urban Canada, with concurrent social issues arising.
  • The intergenerational transfer of wealth (which is forecast to be predominantly rural to urban) may negatively impact the economies of many rural communities

A Co-operative Response

Canadian communities have been grappling with persistent social challenges for years, and many of the social and demographic changes that are expected to be front and centre in the next ten years have already begun. Not surprisingly then, Canadians have also been mobilizing through co-operatives to address many of these issues. Some co-operatives have been formed for broad purposes, such as sustaining cultural and linguistic inheritance, or to obtain dignity and a fair wage. Others provide specific social services such as child care, home care or health care. In the next ten years, the question for persistent challenges will be how to create an even more innovative response from co operatives; for newer challenges, such as those brought about by the aging population, the question will be how to prepare and anticipate for associated opportunities and risks using a co-operative approach.

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Appendix B: Co-operatives Responding to Environmental Change

In the next ten to twenty years, Canada will experience an unprecedented level of change in the natural environment, with associated social, cultural and economic impacts. These changes will be driven by three emerging trends: climate change, resource scarcity, and environmental awareness/ interest in sustainable and green alternatives. Canadians, their communities and all levels of government will be looking for ways to make their activities more sustainable, and judging by past co-operative initiatives, co-operatives have significant potential for focusing innovative collective efforts in this regard.

Climate Change

The impacts of climate change are already evident in every region of Canada, with changes in permafrost and ice-cover in the North, increased presence of exotic species (e.g. pine beetle) and forest fires, rising water scarcity and increasing frequency and intensity of extreme weather. These changes will accelerate in the next ten years, with climate variability causing changes in local ecosystems, global ice-melting (e.g. melting polar cap, glaciers) and economic and social impacts world-wide (e.g. making some regions uninhabitable, causing food shortages). While climate change is a certainty, the rate and patterns of change are uncertain.

Implications for Canadians and Communities

  • Climate change is expected to have disproportionate regional and sectoral impacts in Canada (e.g. on the North, on agriculture/ tourism)
  • Climate change will affect traditional ways of life in the North, with socio-economic consequences from the opening up of the Arctic passage
  • Changing patterns of disease and health/ ecosystem health with new potential risks (e.g. re-emergence of vector borne diseases)
  • Extreme weather conditions will increase the risk of natural disasters affecting human life/ food supply/ water quality
  • Changes in productivity of some resources (e.g. crops) and new opportunities for value-added/ niche products
  • Canadians will increasingly look for ways to adapt to climate variability and the associated impacts, and to minimize impact on the environment

Resource Scarcity

We are currently exceeding the absorptive and productive capacity of several global ecosystems, due to patterns of production and consumption. Looking forward, we can expect ongoing and/or increasing demands for resources around the globe at the same time that new resource discoveries are declining relative to consumption. Continued escalation of energy demand and a reliance on dwindling fossil fuel reserves is likely to accelerate a search for alternative sources of energy. With climate change and environmental degradation, consumption patterns are likely to exacerbate inequality in access to resources, possibly triggering new regional and global tensions, as well as shifts in commodity prices.

Implications for Canadians and Communities

  • A new juggling act for communities, which will have to utilize their resources to maximize health and well-being and economic security of present and future residents, while maintaining the integrity of ecological systems
  • Emergence of new technologies and green alternatives; new technologies may make growth less destructive, but at some point availability and equity issues will constrain the options
  • Increasing prices of existing commodities and emergence of new ones, with disproportionate effects on certain sectors and regions (e.g. rising energy costs, increased cost of transport for rural areas, switch from food crops to fuel crops)
  • Exhaustion of resource-based industries such as fisheries, forestry and mining will introduce a host of new challenges for resource-dependent communities
  • Greater interest in creating a sustainable economy with fewer environmental impacts; shift in values and a search for choices consistent with new values (e.g. green power)

Environmental Awareness/ Interest in Sustainable and Green Alternatives

Increasing public concern and awareness about the human footprint on the environment is likely to result in changes to consumption habits/ lifestyles and pressure on industry and government to become more responsive to environmental needs. Businesses and Canadians are likely to consider the "triple bottom line", and look for greener choices.

Implications for Canadians and Communities

  • Changes in consumer demand and consumption patterns (e.g. local food, smaller cars, etc.), with associated changes in markets and products
  • Emergence of new technologies and "green industries"; decline of "dirty industries" and changes in resource extraction processes
  • Increasing public concern about negative health impacts related to environmental degradation (e.g. air quality and respiratory illness, cosmetic pesticides and cancer rates)
  • Greater demand for regulation/ legislation to protect the environment and health, with corresponding impacts (e.g. species protection, land-use, air quality)
  • Increasing public demand for government services, particularly at a municipal and provincial level, that reduce environmental impact (e.g. increased demand for composting programs, more bicycling lanes)

A Co-operative Response

The environmental trends discussed above are already present in Canada, with numerous environmentally-mandated co-operatives having formed in the last ten years. For example, co-operatives have been moving into markets such as organics and taking advantage of consumer demand for sustainable and green solutions by forming co operatives for car-sharing, green energy, sustainable forest management and production of biofuels, among others. Many emerging co operatives have environmental concerns as a focus, and other larger co-operatives have been leaders in integrating environmental responsibility into the strategic and operational sides of their enterprises for many years. This is a growing area for co-operative development in Canada, with what appears to be significant future potential.

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Appendix C: Co-operatives Responding to Economic Change

In the next ten to twenty years, the global and Canadian economic climate will continue to be affected by trends that currently dominate. The economic climate will be affected by the following trends: globalization, knowledge-based economy and fiscal pressures on governments. Canadians, communities and all levels of government will be looking to develop policies, processes and institutions that are innovative in their response to these trends.


The term globalization describes an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade. In particular, economic globalization is the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration and the spread of technology. Canada will continue to feel the pressures of globalization due to increasing global trade competition and Canada's productivity challenges.

Implications for Canadians and Communities

  • Outsourcing of elements of the production chain is expected to continue (thus shifting value chains) and the growth of skilled labourers in the Asian market may result in outsourcing skilled labour with corollary labour market shifts.
  • Increased trade competition and shift to high value-added functions may mean loss of highly-paid, low-skilled jobs in Canada.
  • The private sector in Canada is under pressure to compete, which has implications for benefit programs for workers (with risks being increasingly borne by individuals rather than employees).
  • Emerging economies could present different normative values that could affect social and cultural policy discussions.

Knowledge-based Economy

With elements of the production chain being outsourced to other countries, Canada's economy is shifting to a knowledge-based economy. Canada faces skills shortages in certain occupations and sectors (e.g. health sector jobs, civil engineers and skilled manual trades) which will become more pronounced as boomers retire. At the same time, higher skill levels are required in an increasingly competitive economy, with high skilled occupations accounting for 70% of all new jobs.

Implications for Canadians and Communities

  • Canada has a high rate of post-secondary attainment, but falls behind in terms of university degrees and basic literacy scores.
  • Increased demand for highly skilled worker/ educated workforce in Canada, with regional impacts, is causing structural adjustment in Canada's economy and reinforcing urbanization.
  • Need for more skilled workers gives rise to questions on the accessibility of post-secondary as well as the adequacy of publicly-funded elementary and secondary education and adult education.
  • Specific segments of the population will be at risk, e.g. new immigrants with fewer language skills, older workers, high-school dropouts and Aboriginal youth.

Fiscal Pressures on Governments

While government finances have improved significantly over the past decade, long-term pressures in relation to health and social expenditures may require significant shifts in resources flowing to local and provincial-territorial governments and/or shifts in existing responsibilities to meet fast-growing expenditure needs. Longer-term consequences of fiscal measures may further erode the future ability of governments to respond to those needs.

Implications for Canadians and Communities

  • Declining ability of federal government to leverage provincial-territorial-local social spending in fiscally distressed regions.
  • Potential need for at least some provinces, territories and local governments to increase their revenue-raising efforts in order to meet rising social expenditure pressures.
  • Growing government trend toward seeking/promoting private sector investment for public institutions and public-private partnerships.

Co-operative Response

Co-operatives have a proven economic track record in communities—from the delivery of needed goods or services to the creation of jobs to the growth of local economies—co-operatives are, by nature, reflective of the needs of local communities because they are developed, owned and operated by the community through their membership. Not only do co-operatives enable citizens to take control of their own economic development, they have a long history of helping hard hit regions recover. In doing so, they will continue to represent a major advantage in supporting the adaptation, recovery and transformation of our local economies.

Co-operatives dovetail naturally with the growing need for place-based responses. Place-based thinking exposes how globalization's most important flows—of people, investment and ideas—intersect in communities around the world. Place-based thinking appreciates how local geographic contexts shape people's life experiences. Interventions rooted in "place" work from the ground up to generate solutions to the particular concerns of local communities. These are attuned to the specific needs and capacities of residents thus creating good places for people to live, work and participate in their community. To this end, place-based thinking:

  • is rooted in community's interest in the triple bottom line of economic, social and environmental return on investment;
  • is focused on the unique features of a particular landscape or culture;
  • is locally driven and capitalizes on existing local assets;
  • provides a balanced long-term approach to sustainability of resources; and
  • is dependent on creative entrepreneurship and long-range vision.

Much can be learned from the experience and skill of co-operatives as the pressure and imperative towards place-based policy interventions that facilitate collaboration and partnerships to help align investments and activities across the public, private and non-profit sectors continues to grow.

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