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| Proposal for a National Co-op Sector Co-operative Development Fund |
One of the greatest challenges for co-operatives in Canada is access to capital investment. Because co-ops cannot sell shares on the stock market, they have a greater difficulty raising capital for development or expansion of their enterprises. The federal government-funded Co-operative Development Initiative (CDI), which for the last eight years has provided support for the development of hundreds of new co-operatives, has also confirmed the need for investment capital dedicated to the needs of co-operatives.
With this in mind, the Canadian Co-operative Association (CCA) has developed a proposal for a National Co-operative Development Fund that would be capitalized by Canadian co-operatives and credit unions, as well as by government contributions. The Fund would be a legacy project that would be created as part of Canada's celebration of the UN International Year of Co-operatives in 2012.
The Fund would be a loan fund aimed at supporting the development of new co-operatives and the expansion of existing co-operatives across Canada through investments, usually of a patient capital nature. Unlike the Co-operative Development Initiative or the Co-operative Development Foundation of Canada, this would be neither a grant fund nor a charitable fund. We would look to credit unions and co-operatives investing in the fund as part of their investment portfolio and receiving an appropriate return.
CCA has hired Kim Andres, a well-known co-operative sector consultant, to work on a proposal for the creation of the fund. The process included interviews and webinars with dozens of credit unions and co-operatives as potential investors, as well as with potential users and co-op developers to solicit their input.
The proposal includes information on the governance and management of the fund, as well as the portfolio mix. The proposal to create a sector-financed Co-operative Development Fund is being developed alongside the co-operative sector's campaign for the federal government to invest $70 million in a co-operative development loan fund. It is hoped that initial capitalization by the co-operative sector would serve to leverage this federal government investment in co-operative development as part of the government's participation in the International Year of Co-operatives.
For further information please contact:
John Anderson
Director, Government Affairs and Public Policy
Canadian Co-operative Association
613-238-6711, ext. 228
john.anderson@coopscanada.coop
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