Every year, Elvy Del Bianco, program manager of cooperative partnerships at Vancouver City Savings Credit Union (523, 000 members, $21.7 billion in assets), leads a tour group to the Emilia Romagna region in northern Italy. The region is renowned for its sparkling wines as well as Emilia Romagna’s best-known gift to global gastronomes – Bolognese sauce. However, Del Bianco and his merry band are not culinary travellers. They visit Emilia Romagna because the region boasts one of the most vibrant cooperative economies in the world. About two thirds of its 4.5 million inhabitants are co-op members and 15 percent of Emilians and Romagnols work in the 5,150 co-ops that dot the region, collectively making up 30 percent of Emilia Romagna’s GDP.
Compare that to Del Bianco’s home province of British Columbia, which is similar in size (4.8 million inhabitants) and has 700 co-ops that account for around seven percent of the province’s workforce, contributing 1.3 percent to BC’s GDP. Although research shows that the number of cooperatives in Canada has declined to 8,000 from 9,000 due to consolidation, the co-op community is growing with more than 18 million members and 150,000 employees. What is also encouraging is that 83 percent of Canadians say they would rather buy their products at a co-op than a private business.
Del Bianco believes the socio-economic climate in BC is fertile ground for co-op growth. “Economic conditions are challenging,” he says. “There’s a cohort of younger people who are attracted to the cooperative values of democracy and meeting the real needs of society.”
Awareness on the rise
Brendan Denovan, communications manager at Co-operatives and Mutuals Canada, believes the trend is reflected across Canada. “The changing world of work is pushing skilled individuals into freelance employment,” Denovan says. “We’re seeing a new awareness of collective entrepreneurship, where people share risks and resources.”
It wouldn’t be a stretch to say that the social conditions that led to the birth of the cooperative movement are prevalent in Canada today. The Rochdale Society of Equitable Pioneers of Great Britain is generally considered to be the first cooperative enterprise. Formed in 1844 during the Industrial Revolution, society members pooled their resources and opened a store to sell food they couldn’t otherwise afford.
“There’s a cohort of younger people who are attracted to the cooperative values of democracy and meeting the real needs of society.” – Elvy Del Bianco
Del Bianco sees a clear parallel. “When it’s fair weather sailing for the economy, it’s easy to make money on your own. But in challenging times people collaborate.”
There are many unsettling factors in today’s current economy that are leading to greater cooperation. “Companies like Amazon, Facebook and Uber are causing disruption in many sectors,” says Denovan. Cooperative solutions include the creation of platforms that support user ownership collectively.
A key player in the growth of Canada’s cooperative businesses is the credit union system. Martin Kihle, vice-president of agriculture and commercial at Libro Credit Union (104,000 members, $7.2 billion in assets) in Ontario sees a natural fit. “At Libro, we see ourselves as part of the co-op ecosystem,” Kihle says. “We have a number of relationships with cooperative partners.”
The co-op in question, however, must not only present a solid business plan but also demonstrate it meets all the requirements of a properly functioning, democratic enterprise. Vancity offers several products created just for co-ops. For instance, a lot of start-up co-ops look to microfinancing for seed capital. Vancity’s microfinance team can offer co-ops flexibility if conventional funding is not an option. An interesting product for an entrepreneur setting sights on a worker co-op is Vancity’s “work-to-own” offering. Del Bianco says that it costs between $5,000 and $15,000 for individuals to join a worker cooperative in BC’s Lower Mainland and Vancity is willing to lend that initial outlay. Vancity has also created a cooperative capital fund aimed at enterprises that don’t qualify for conventional or non-conventional options like microfinancing. “It’s a small pool of money but the idea is to help co-ops get through their start-up phase,” Del Bianco says.
More education needed
An important aspect of helping the growth of the cooperative sector in Canada is education — or the lack of it. Del Bianco says that MBA programs don’t study cooperatives despite the fact that one billion people around the world belong to one. To help remedy the situation, Vancity partnered with the BC Co-op Association to start Cooperate Now in 2015, a boot camp for aspiring co-op entrepreneurs. Del Bianco cites one success story — The Yeast Van Brewery District Co-operative, a group of breweries in East Vancouver that Vancity helped to incorporate. Other services provided by Vancity include advice on understanding the co-op model, he adds.
Credit unions helping Canadian cooperatives is not just about Cooperative Principle 6, which is “cooperation among cooperatives.” Both Kihle and Del Bianco emphasize that working with co-ops makes sound business sense for credit unions, thanks to the durability of the cooperative business model. Studies show that co-ops are twice as likely to survive the difficult first five years of incorporation and continue to show resilience through the following five years. “A co-op is not just a business,” says Del Bianco. “It’s a community. People attached to that community will rally to see it succeed.”
Nonetheless, co-ops are still the exception rather than the norm in Canada and credit unions are working to optimize these partnerships. Del Bianco thinks credit unions were good at lending to co-ops in the past but that ability has faded over the years. “We are having to re-learn how to do business with co-ops,” Del Bianco says.
Credit unions might be doing just that, which is good news for cooperative business collaborations. Last year, several credit unions came together with other cooperative partners, committing $25 million to create the Canadian Co-operative Investment Fund, helping cooperatives access capital without compromising their autonomy or one-member, one-vote structure. Denovan believes that there is the growing realization that collaboration among cooperatives around the globe can help the sector compete with multinational corporations. Credit unions, he says, will have a critical role to play in this scenario.
“I think we are at the start of a growth spurt, based on successful co-op models in Canada and internationally” – Brendan Denovan
In Emilia Romagna, a man can finish his shift at a worker co-op, pick up his daughter at a day care that is also a worker co-op and then meet his wife at the financial co-op where she works. They can then go for a family dinner at a restaurant that is co-op owned by the chefs and the other employees, then return to their home in a co-op housing complex. Could this happen in Canada one day? “The possibilities are endless,” says Del Bianco. And credit unions, he says, are just beginning to tap the potential of Canada’s cooperative sector.
Denovan shares Del Bianco’s enthusiasm. “I think we are the start of a growth spurt, based on successful co-op models in Canada and internationally.”
Who knows? In the future, tour groups studying cooperative economies might visit the Annapolis Valley in Nova Scotia or the Fraser Valley in BC, in addition to Emilia Romagna’s cooperative landscape. ◊