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The contribution of co-operatives to community economic development : A case study of CRS Workers’ Co-operative Newell, Teresa Margaret 1994

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THE CONTRIBUTION OF CO-OPERATIVES TO COMMUNITY ECONOMIC DEVELOPMENT: A CASE STUDY OF CRS WORKERS' CO-OPERATIVE by TERESA MARGARET NEWELL B.A., Simon F r a s e r U n i v e r s i t y , 1989 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n THE FACULTY OF GRADUATE STUDIES ( S c h o o l o f Community and R e g i o n a l P l a n n i n g ) We a c c e p t t h i s t h e s i s as c o n f o r m i n g t o t h e r e q u i r e d s t a n d a r d THE UNIVERSITY OF BRITISH COLUMBIA August 1994 (c)Ter e s a M a r g a r e t N e w e l l , 1994 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of IPMMQIQITW * ^efripWAu P u ^ / ^ l ^ G -The University of British Columbia Vancouver, Canada Date - P e c . W 4 -DE-6 (2/88) ABSTRACT Compared to many other places i n the world, Canada i s a peaceful, safe, economically well-developed haven of democracy. Despite t h i s designation, many Canadians struggle d a i l y to acquire the simplest of necessities. This thesis i s about exploring the pot e n t i a l of alternative economic structures to ameliorate some of Canada's economic and s o c i a l problems. The purpose of t h i s work i s to examine the concept of Community Economic Development (CED) and the role of the co-operative model as a CED i n s t i t u t i o n . To i l l u s t r a t e the poten t i a l of the worker co-operative as a CED i n s t i t u t i o n , the case of CRS Workers' Co-op i s studied. A review of the l i t e r a t u r e provides background information on the development of the CED movement i n Canada. Academic and community-based publications are examined to provide insight into various CED theories and approaches. Basic co-operative concepts are introduced i n a h i s t o r i c a l review of co-operative development i n Canada. The role of co-operatives as CED i n s t i t u t i o n s i s examined and a case study of CRS Workers' Co-op i s used to explore the p o t e n t i a l contributions of an alternative business structure. Recommendations contained i n reports from a federal task force and a p r o v i n c i a l advisory group on co-operatives and CED form the basis for conclusions about the roles of government and established co-operatives i n fostering and supporting the development of worker co-operatives and CED projects. i i TABLE OF COMENTS Abstract i i Table of Contents i i i Acknowledgement v Preface v i 1.0 INTRODUCTION 1 1.1 Purpose 1 1.2 Scope 1 1.3 Rationale 2 1.4 Organization and Methodology 3 2.0 COMMUNITY ECONOMIC DEVELOPMENT 4 2 .1 CED as a Movement 6 2.1.1 Reactions to an Economy i n C r i s i s 7 2.1.2 Influences 10 2 . 2 CED Defined 13 2.2.1 Approaches 14 2.2.2 Princip l e s 23 3.0 CO-OPERATIVES IN CANADA 31 3.1 Co-operative Development 31 3.1.1 History 32 3.1.2 Princip l e s 46 3.2 Co-operatives i n Practice 50 3.2.1 Types of Co-operatives 50 3.3 Co-operatives and CED 56 3.3.1 Co-operative Contributions to CED 56 i i i 4.0 CRS WORKERS' CO-OPERATIVE 63 4.1 History of CRS 63 4.1.1 Early Days 64 4.1.2 Incorporation i n 1976 67 4.1.3 A New Decision-Making Structure i n 1982 ... 71 4.1.4 A New Salary Structure i n 1991 74 4.1.5 Lessons for CED 76 4.2 Nature of Ownership 77 4.2.1 Role of P r o f i t s 78 4.2.2 Democratic Control 81 4.2.3 The Di s t r i b u t i o n of Surplus 82 4.3 CRS's Contributions to CED 83 4.3.1 Economic Benefits 83 4.3.2 Educational Benefits 85 4.3.3 Co-operative Community 86 4.3.4 Needs of People 87 5.0 SUMMARY AND CONCLUSIONS 8 9 Appendix 105 Endnotes 110 Bibliography 112 i v A C K N O W L E I X J E M E N T I would l i k e to thank Craig Davis, my advisor, for his p o s i t i v e support and guidance thoughout the process of developing and writing t h i s thesis. v PREFACE In May 1991, following the completion of my course work i n planning, I took a p o s i t i o n i n the Administrative C o l l e c t i v e at CRS Workers' Co-operative. My two years of experience as a member of the CRS Board of Directors has provided me with insight into the organization that proved useful for the case study section of t h i s thesis. v i 1.0 INTRODUCTION 1.1 PURPOSE The general purpose of this thesis i s to create awareness for the potential of alternative economic structures to ameliorate economic and social problems i n Canada. More specifically, the purpose i s to examine the concept of Community Economic Development (CED) and the potential of the co-operative model as a CED institution. Toward this latter objective, the contributions of workers1 co-operatives to CED are explored i n a case study of a well-established, financially successful co-operative: CRS Workers' Co-operative. 1.2 SCOPE The main focus of this thesis i s narrowly defined as the contribution of co-operatives to CED, with particular emphasis placed on the role of workers' co-operatives. To accomplish the purpose of "creating awareness" about "alternative economic structures" ,the overall scope of the thesis, at times, becomes quite broad. "Awareness" in this thesis means enhancing the reader's knowledge of the concepts of CED and co-operation by exploring the principles and the development of the two movements in Canada. 1 1.3 RATIONALE Part of the rationale for this thesis comes from the observation that i t does not make sense that a country as economically well-developed as Canada should have so many people struggling to make i t through l i f e every day. It i s not necessarily that current approaches to economic and community development are not working but that they do not seem to be doing enough. We are l i v i n g i n d i f f i c u l t times with complicated economic and social problems; a wide range of approaches to development must be explored and supported. Another part of the rationale for this thesis comes from the belief that change must happen at the community level and that individual actions can make a difference i n how the world works. Co-operatives offer opportunities for small changes to occur and for people to have a larger impact on their own economic destinies. This thesis i s also prompted by a desire to broaden my knowledge and perspective as a (future) planner. By blending the theoretical aspects of CED with a historical review of co-operative development and the practical observations of a case study, this thesis provides me with a base for approaching future development work. 2 1.4 ORGANIZATION & METHOLX)LOGY The thesis consists of five chapters. Chapter two contains a literature review of CED development and theory. Its purpose i s to create a greater understanding of the CED approach by exploring the ideas, beliefs, strategies, and aims of the movement. Chapter three introduces co-operative concepts and provides a hist o r i c a l review of co-operative development i n Canada. Comparisons between the co-operative and the CED movements are drawn and the potential of the co-operative model to contribute as a CED institution i s examined. Chapter four i s a case study of CRS Workers' Co-operative. A hist o r i c a l review of the organization and my insights as a member of CRS provide the background for the study. The purpose of this chapter i s to breathe l i f e into the theoretical and hi s t o r i c a l material of chapters two and three by studying the contributions of a well-established, successful workers' co-operative currently operating i n Br i t i s h Columbia. Chapter five contains a summary of the principal points brought forward i n the preceding chapters and offers some conclusions about the future development of the CED and the co-operative movements. Implications for the role of established co-operatives, the role of government, and the role of planners i n fostering further development are outlined and p o s s i b i l i t i e s for future research are considered. 3 2.0 COMMUNITY ECONOMIC DEVELOPMENT Compared to many other places i n the world, Canada i s a peaceful, safe, economically well-developed haven of democracy. Cur problems pale in comparison to those of the war-torn former Yugoslavia or the economically crippled Russia, but we do have problems. There are people l i v i n g on the streets i n every major Canadian city. We have food banks and prisons strained to capacity. We have shelters to care for neglected children and to protect women against violence. We have a culture that i s driven by mass media generated consumerism and a fixation on material wealth. We have racism, addiction, alienation, isolation, and despair. We have too many Canadians who are willing and able to work who cannot find jobs and too many others who are employed i n work that i s far below their a b i l i t i e s or aspirations. We have the livelihood of entire communities threatened by decisions made half-way across the country, half-way around the world or just across the border. These are complicated problems. There are no simple answers in these d i f f i c u l t times but i t i s puzzling that a country with so much wealth should have so many people struggling to get through l i f e every day. One place we could start looking for answers i s i n our business and economic structures, as J.T. Webb puts i t i n his report, Workers' Co-operatives; A People Centered Approach to Regional Development: 4 Our economic institutions which supposedly exist to serve us and provide us with the goods and services to l i v e social, cultural, p o l i t i c a l and religious lives --to l i v e whole lives -- have taken on a l i f e of their own which i n many aspects seems to be at war with the rest of our lives. These structures encourage confrontation, competition, aggressive behaviour, self-seeking and at worst encourage social irresponsibility. ...Business i s structured i n such a way that there i s only one bottom line -- profits. (Webb 1987, 11) At present, we have evolved an economy that often does not meet basic human needs and does not always consider the environmental impacts of i t s "economically viable" decisions. There are people i n communities across Canada who have become frustrated with the lack of control they have over their own economic destinies and have begun to look at new ways to organize economic l i f e . The purpose of this chapter i s to introduce a movement that has been gaining ground in Canada, particularly over the past ten years. It i s a movement that offers an alternative approach to some of the problems our communities are facing, a h o l i s t i c approach that attempts to integrate economic, social, cultural and environmental issues. This approach i s called community economic development (CED) . CED i s not a panacea; i t cannot address a l l the complicated problems facing our country, but i t i s a place to start. It i s an organizational concept i n which individuals can come together i n small ways to begin to make a difference i n their communities. This chapter i s divided into two sections. The f i r s t section, CED as a Movement,is concerned with the origin of the movement and how i t has developed i n Canada. The second section, CED Defined, 5 provides an introduction to the broad f i e l d of CED a c t i v i t y by outlining three distinct conceptual approaches to this form of development and by presenting a brief overview of the principles of CED. 2.1 CED AS A MOVEMENT The Canadian experience with CED i s captured i n the literature i n two waves. The f i r s t wave marks the beginning of CED as a movement that developed i n reaction to the " c r i s i s of the welfare state" during the late 1970s and early 1980s.1 The second wave has been evolving since the late 1980s and early 1990s as concerns regarding the impacts of "globalization" and the state of the natural environment began to become more prominent i n the literature. 2 CED as a movement has been influenced by a number of forces. The ideas put forth by E.F. Schumacher i n Small i s Beautiful: A Study of Economics as i f People Mattered published i n 1974 and built upon further i n George McRobie's 1981 follow up, Small i s Possible, form a chord of theory that reverberates throughout the literature. Roots of CED are also found firmly planted i n the experiences of the Canadian Co-operative Movement. These influences combined with grassroots a c t i v i t i e s i n a number of other realms continue to shape the development of CED as a movement. 6 2.1.1 Reactions to an Economy in Crisis A. The Decline of the Welfare State In the post World War II era of sustained growth, the welfare state, led by private sector enterprise and assisted by selective government programs and policies, provided for "unprecedented increases i n material prosperity and social security" (Hunsley 1986, i x ) . In the early 1970s large scale economic growth began to slow down, unemployment increased and optimism about continued affluence deteriorated. In 1973, the o i l c r i s i s marked not only the beginning of a serious downturn i n the world economy but i t also brought home to many Canadians the f u l l extent to which the Canadian economy was influenced by outside sources (Campfens 1983,4). This i s when the " c r i s i s of the welfare state" began i n Canada. The foundation for the proper functioning of the welfare state i s f u l l employment. The surplus wealth generated by the post war growth economy fuelled Canada1s publicly assisted social and economic programs. As unemployment rose, however, surplus wealth in the economy declined and demands on social and economic programs increased. Governments at a l l levels were squeezed for funds and began the process of limiting their involvement i n the provision of a number of services. By the early 1980s the welfare state was i n serious financial d i f f i c u l t y . Unemployment remained a problem and economic recovery was hampered by rising inflation and high interest rates. More and 7 more communities were feeling the effects of decisions made "elsewhere," decisions made by national or multinational corporations to close a plant or lay people off, decisions made by government to reduce funding for services or to cut programs altogether. In the early 1980s there was a flurry of CED a c t i v i t y across Canada as communities3 began to look for ways to increase local control and decrease dependency on outside forces, whether those forces be "big business" or "big government." Most local i n i t i a t i v e s began as reactions against the failure of top-down regional development policies, as reactions against the failure of the traditional market system to provide sufficient quality employment opportunities i n the community or as reactions against the neglect of social and community services. CED took on the attributes of a movement during the early 1980s when activists and academics began to document local i n i t i a t i v e s and to foster i t s development through a multitude of conferences, papers, articles, and books.4 Many of the proceedings and publications that came out at this time focused on creating a more homogeneous body of CED theory by attempting to define standard principles and outline consistent strategies for development. 8 B. Globalization and the State of the Natural Environment Concerns regarding unemployment, economic st a b i l i t y , community control and the provision of social services provided the impetus for the CED movement to continue growing throughout the 1980s. The movement picked up further momentum in the early 1990s as problems associated with the impacts of "globalization" and degradation of the natural environment began to surface more regularly i n the CED literature. 5 In a report of a provincial consultation on CED i n 1992, the B.C. Working Group on Community Economic Development states that: CED has emerged as an alternative to conventional approaches to economic development. It i s founded on the belief that problems facing communities - unemployment, poverty, job loss, economic instability, environmental degradation and loss of community control - need to be addressed i n a h o l i s t i c and participatory way. (BC Working Group 1993, 2) The authors of Co-operatives and Community Development: Economics in Social Perspective believe that the challenge for communities i n the 1990s comes from "globalization and economic restructuring: free trade and trading blocs; transnational corporations; international competition; and loss of local or regional autonomy and f l e x i b i l i t y " (Fairbairn et a l . 1993, 8) . In a paper written for the Journal of Planning Education and Research in 1993, Boothroyd and Davis suggest that: Through the 1980s and into the 1990s awareness has grown that both local and national economies are increasingly threatened (if not already impacted) by the depletion and degrading of natural resource bases, telecommunication innovations that allow investment decisions to be handled more remotely and capital moved more quickly, unmanaged trade, and f i s c a l crises caused by the systemic incapacity to make do with less. (Boothroyd & Davis 1993, 234) 9 Similar points are emphasized by Marcia Nozick i n a 1990 City Magazine a r t i c l e : The Western world's over-consumption and over-production have resulted i n global environmental destruction [and that] through a process of corporate take-overs, the international free flow of capital, and concentration of production into the hands of an ever shrinking almighty few, there has been a noticeable and systematic elimination of diversity from the face of the earth. (Nozick 1990, 17) The CED movement i n Canada developed i n response to the " c r i s i s of the welfare state", as an alternative to the "big business" or "big government" responses of traditional approaches to economic development. It continues to evolve as a legitimate movement today as the quality and quantity of employment opportunities i n Canada become more desperate, as concerns over the adequate provision of social services become more serious, as natural resource problems become more complicated and as the impacts of a changing global economy become more devastating for communities. 2.1.2 Influences The appropriate technology movement, the co-operative movement and grassroots activism have a l l had a major influence on the development of CED i n Canada. A. Appropriate Technology In 1973, E.F. Schumacher, an economic advisor on third world development, was concerned that Western technologies were 10 aggravating the problems of c i t y growth and rural decay i n poor countries. He believed that " i f you want to be a good shoemaker, i t i s not good enough to make good shoes and to know a l l about making good shoes, you also have to know a lot about feet. Because the aim of the shoe i s to f i t the foot" (Schumacher 1977) . In other words, Schumacher believed that the technology used i n development must be appropriate to the situation. Schumacher believed that we should question not only the ecological implications of technology but also the impact of that technology from a human point of view, from the perspective of the worker. He believed that "you could make effici e n t technologies that were small and simple, saving capital and energy, doing minimum damage to the environment, and using people's s k i l l s instead of bypassing them" (McRobie 1986, 57). Schumacher was not the only person at this time who questioned how development should be approached. As he says, there was a "great ground-swell of people" who were also asking themselves: Well really, the purpose of our existence on this earth cannot be to destroy i t . The purpose of our existence can't be to work ourselves s i l l y and to end up i n a lunatic asylum. Let's reconsider i t . (Schumacher 1977, 7) . These are the people for whom Schumacher's perspective made perfect sense. They began the CED movement i n Canada by echoing his ideas throughout the literature. 6 11 B. Canadian Co-operative Movement The Canadian experience with CED concepts i s rooted i n the development of the co-operative movement.7 Just like the CED practitioners of today, the early co-operators found their communities being threatened by increasing corporate concentration, and by the export of local resources to remote metropolitan centres. They were convinced that the key to withstanding the onslaught of the 20th century lay i n strengthening the cultural, p o l i t i c a l and economic fabric of local communities. (Wismer & Pell 1981, 1) Canada's earliest co-operatives were far more than just economic institutions. They gave equal emphasis to social, cultural and economic i n i t i a t i v e s . It i s this social philosophy and the integration of economic and community development that permeates conceptions of CED i n Canada today (Newman 1986, 56) . C. Grassroots Activism In 1984, the Social Planning and Review Council of B r i t i s h Columbia published a report on Community Economic Development i n B.C. In this report they found that CED projects i n B.C. share some commonalities i n the process of their development: A number of people find they have a common concern, frequently about the severe unemployment problem i n their comrnunity. A group meets and agrees to expand i t s membership across the entire community of those who share this special interest. Ideas for local action are generated. A society i s formed. . . . (Clague 1985, 5) The process outlined above by Clague and reiterated by Stewart Perry (1984, 9) i s basic grassroots activism, a group of people organizing themselves around a common concern. The history of 12 the CED movement i s bursting with grassroots a c t i v i t y of one sort or another. There have been many experiments i n collective enterprise and self-sufficient community development, also known as intentional communities.8 There have also been groups within Canadian society - including Quebecois, native and metis people, members of the environmental movement, and residents of communities i n the hinterlands of the North, the West, and the Atlantic region - that have taken a grassroots approach to solving issues i n their communities and gaining more control over their own lives (Wismer & Pell 1983, 68). Grassroots in i t i a t i v e s are products of the people but without the support of Canadian job creation programs such as LIP (Local Initiatives Program), LEAP (Local Employment Assistance Program), and OFY (Opportunities for Youths) many Canadian experiments with CED could not have been maintained long enough to i n i t i a t e significant change (Wismer & Pell 1983, 68). 2.2 CED DEFINED The f i e l d of CED i s broad, both i n theory and i n practice. There are many definitions of CED in the literature involving an assortment of approaches and principles. Boothroyd and Davis devised a typology of approaches to CED that provides an excellent perspective on the wide range of activ i t y i n this f i e l d . 9 Using this typology, the f i r s t part of the following section outlines three common approaches to CED: growth promotion, structural change 13 and conmrnalization. The second part of this section provides an overview of the principles that are common to current working definitions of CED. 2.2.1 Approaches The general objective of any CED activ i t y i s to take some measure of control of the local economy back from the market and the state. The approach used to reach this objective w i l l f a l l under one of three categories depending on what concepts of economy and community are used to guide the i n i t i a t i v e and according to what the primary goals of the i n i t i a t i v e are and what strategies are used to achieve these goals (Boothroyd & Davis 1993, 230) . For the purposes of the typology, Boothroyd and Davis define community, economy, and development i n terms that are general enough to encompass a l l three approaches.10 Their definition of community focuses on member involvement as the essential characteristic of community and includes geographically defined communities as well as communities based on common interests. Economy i s defined to include concepts of both market and non-market a c t i v i t i e s by describing economy as: "a system of human act i v i t y directed to meeting human wants that i s determined by deliberate allocations of scare resources, including human time" (Boothroyd & Davis 1993, 230). Their definition of development emphasizes planned change, "deliberate quantitative or qualitative change of a system" as opposed to "change resulting from good luck 14 or aggregated individual efforts to maximize personal gain" (Boothroyd & Davis 1993, 230). A. Growth Promotion Approach (cEd) Under the cEd approach to economic development the concept of economy i s narrowly defined in terms of monetary transactions. Community i s recognized i n terms of i t s location on a map. The primary purpose of any i n i t i a t i v e i s to promote growth i n jobs, income and business activity. The primary strategy used to achieve this growth i s to increase monetary inflows (Boothroyd and Davis 1993, 7). In this type of approach there i s generally not enough thought put into questioning what kinds of jobs are created, how the income growth i s distributed, what type of business a c t i v i t y i s generated or whether money actually stays i n the community. Smokestack Chasing In the traditional form of growth promotion, also referred to as "smokestack chasing", the source of growth i s assumed to l i e i n attracting major employers to the locality. The type of development to be attracted i s typically a factory but could just as well be a mine, a railway, a tourist attraction, a prison, a college or a government agency (Boothroyd & Davis 1993, 231) . The competitive nature of this approach forces communities to battle against one another i n an attempt to "lure the economic equivalent of a knight i n shining armour" only to find that the 15 benefits they expected might never be realized (Boothroyd & Davis 1993, 231). A number of communities have found after successfully attracting a large corporate branch plant, a megaproject, or a government infrastructure expansion that the effects on existing businesses can sometimes be quite negative. Other communities have found that their natural resource base has been seriously depleted with no real long term economic benefits to show for i t . S t i l l other communities find themselves held ransom for better subsidies or larger tax breaks when demands are made through veiled threats to shut down or move an operation. Although this type of "smokestack chasing" may not be as common today as i t was i n the late 1970s and early 1980s, elements of i t s t i l l exist. In fact there i s a modern variant of this approach called "growth planning" which i s s t i l l followed by many communities today. It i s a more sophisticated version of growth promotion where the same narrow concepts of economy and community are applied to the same goals of increasing jobs and income but where the strategies employed to achieve these goals are more complicated. Growth Planning The emphasis with this approach i s on the type of comprehensive planning that attempts to involve a l l relevant private and public actors i n setting targets, surveying opportunities and developing a wide range of strategies. In addition to chasing outside investors/employers, this approach 16 includes other strategies such as increasing the productivity of existing firms and promoting the establishment of new firms by local entrepreneurs. Efforts are focused on assisting firms i n increasing community exports, making better use of resources, developing new products and supporting import substitution efforts (Boothroyd & Davis 1993, 232). There are many situations i n which these types of growth promotion efforts may be absolutely necessary, for instance i n emergencies such as the closure of a single-industry town's main employer or i n the cases of chronically impoverished communities, but none i n which i t i s sufficient (Boothroyd & Davis 1993, 232) . According to Boothroyd and Davis, the weakness i n this approach i s i n i t s single-mindedness. Issues of long-term stab i l i t y , sustainability, interdependence, equity and quality of working l i f e are not addressed. Goods and services produced outside of the marketplace (e.g., by volunteers) are not counted as contributing to community growth. The cultural, social or environmental costs of increased growth are usually secondary considerations and the shaky assumption that the benefits of increased growth w i l l automatically "trickle down" through the community underlies many poor decisions. B. Structural Change Approach (ceD) The structural change approach to CED i s what was described i n the opening section of this chapter as the f i r s t wave of CED activity. It emerged simultaneously to the smokestack chasing 17 approach as some communities began looking for ways to "improve s t a b i l i t y i n the short and long terms by broadly reducing their dependencies rather than simply looking for ways to promote growth" (Boothroyd & Davis 1993, 234) . It evolved as an alternative to the type of planned growth approach that relies heavily on government support and the "invisible hand" of the market system to guide the destiny of a community. Under the ceD approach to economic development, s t a b i l i t y and sustainability are the primary goals; i t i s the quality of the economy, the types of jobs and the level of diversity, that i s emphasized, rather than the quantity of growth i n one variable or another. It i s advocated by those who believe communities should not buy growth at any price (e.g., at the price of c y c l i c a l instability, absentee ownership, or the exhaustion of natural capital) (Boothroyd & Davis 1993, 233). The concept of the economy i n this approach includes a wide spectrum of monetary and nonmonetary transactions ranging from big businesses and the public sector to collectives, cooperatives, community enterprises, voluntary activity, barter and s k i l l s exchange, mutual aid and household activity. The notion of community extends beyond l o c a l i t y to incorporate a meaning of place: a sense of one's home. The primary structural strategies used to increase local control i n the interest of s t a b i l i t y and sustainability are grouped into six categories by Boothroyd and Davis: 18 1. Diversify external investment sources. The reasoning behind diversifying i s that several small operations are generally more stable than one large employer. 2. Reduce dependence on external investment by increasing local ownership. This strategy includes ideas such as supporting employee buy-outs, encouraging local entrepreneurs, identifying appropriate small scale technologies or unfilled market niches that can be u t i l i z e d by local entrepreneurs. As well as developing credit unions and community loan funds to help ensure a larger portion of community funds stay i n the community this strategy also involves establishing community-rooted firms such as producer and consumer cooperatives and community development corporations. 3. Reduce dependence on outside decision-makers by increasing local control over resource management. This strategy includes encouraging the development of comanagement ini t i a t i v e s , nature conservancies, community land trusts and cooperative housing. 1 1 4. Reduce dependence on traditional exports by diversifying products or markets for existing products. The strategy here i s to find ways to avoid relying on a single commodity to form the community's economic base. 19 5. Reduce the need for exports i n general, by substituting local production of imports paid for by exports. For example, encourage buy-local programs where possible. 6. Reduce dependence on money as the basis for local exchange by strengthening the local noncash economy. The strategy here i s to reduce the impacts on the community of macro-economic business cycles by establishing community gardens or forming babysitting cooperatives, for instance. The strategies offered by the ceD approach to development would be suitable for a wide range community socio-economic situations. Many citizens would welcome the economic s t a b i l i t y attained by the development of a mix of locally-control led, environmentally-sustainable a c t i v i t i e s . The drawback with this approach, however, i s that not everyone would be willing to make the trade-offs and compromises necessary to achieve this type of development (Boothroyd & Davis 1993, 233). There i s a mainstream attachment to unlimited growth that tends to lead people to a strong notion of quality of l i f e (i.e. materially driven) which i s not compatible with many of the strategies outlined i n the ceD approach. The far reaching social and environmental implications of this perception of unlimited growth and material luxury are what motivates many of today's CED activists to continue working towards developing better communities. 20 C. Communalization Approach (Ced) The communal izat ion approach to CED goes beyond concerns with economic growth and s t a b i l i t y to considerations of how wealth i s used and distributed. The concept of economy i n this approach i s extensive. Boothroyd and Davis describe i t as "market and production distribution based on market and nonmarket principles" (Boothroyd & Davis 1993, 237). For advocates of Ced, structural change i s necessary but insufficient as a goal. The emphasis i s on developing an economy in such a way that people feel connected on a social/emotional level, where they are concerned with each other's well-being and gain satisfaction from co-operating. This i s a quality many aboriginal people i n Canada c a l l "caring and sharing" (Boothroyd and Davis 1993, 235). It i s the process of development and the concept of equity that matter most with this approach: Ced t r i e s to create within the community f a i r access to the means of household livelihood by creating f a i r access to the community's collective decision-making processes. It i s participatory in i t s means and ends, communalistic without negating the individual. Its concern i s to establish free cooperation. (Boothroyd & Davis 1993, 236) Ced strategies can be grouped into 3 categories: 1. Working through local and senior governments to eliminate marginalization or exploitation of particular people within the community. Strategies here would be to urge governments to encourage work sharing, prevent discriminatory lending-policies, monitor work conditions or f a c i l i t a t e unionization. Ced practitioners could 21 help to establish fairer distributions of corrmunity services and development impacts and to make planning processes more participatory (Boothroyd & Davis 1993, 236). 2. Structuring ceD institutions (such as co-ops, land trusts, and community development corporations) to favour those most i n need. Co-ops, for instance, can be organized to meet ceD objectives such as buffering individuals from the market, increasing collective bargaining power, and retaining earnings i n the community while s t i l l promoting social justice that i s a Ced objective (Boothroyd & Davis 1993, 236). 3. Strengthening noncash mutual aid norms and practices. These are the types of ac t i v i t i e s that have traditionally enabled weaker members of a community to survive (e.g., through distributions of food or caring for children at risk) and households to accomplish tasks beyond their individual power (e.g., through barn-raising bees) . The ethic of mutual aid, while weakened by modernization, survives as "voluteerism" . The strategy here i s to point out the importance of mutual aid to the community economy and promote i t s expansion. (Boothroyd & Davis 1993, 236) . The Ced approach assumes that the purpose of CED i s to increase community solidarity, distributive justice, and broadly defined quality of l i f e . There i s also an assumption that economic institutions should be organized to promote cooperation rather than 22 competition (i.e., they should combine social development with economic development) and that a l l community members must be empowered to participate i n planning and decision-making processes that shape the community's economy (Boothroyd & Davis 1993, 236) . Unfortunately, Ced faces the same basic limitation as ceD i n that i t i s out of step with the mainstream. Privacy, for instance, has a high value in today's society and i t i s argued that for many individuals this emphasis on privacy replaces a sense of responsibility for the public good. There i s also a perception "out i n the world" that social forces now seem so far beyond individual control that the best anyone can do i s focus on manageable personal goals (Boothroyd & Davis 1993, 237) . The same elements: alienation, isolation, p o l i t i c a l cynicism and apathy that create the need for Ced also limit i t s potential as a viable alternative to traditional economic development approaches. 2.2.2 Principles The three approaches outlined i n the previous section provide a broad perspective on the range of act i v i t y i n this f i e l d . The idea of separating CED approaches into the categories of growth promotion, structural change or communalization i l l u s t r a t e s how different strategies can be used for different situations depending on what the goals are and how the concepts of community and economy are perceived. 23 The following section provides a narrower perspective on CED by focusing on some of the principles currently used to guide CED in i t i a t i v e s i n Bri t i s h Columbia. A. Definition For the purposes of their 1986 Directory of CED i n B.C., the Social Planning and Review Council (SPARC) presented the following statement: CED i s concerned with fostering the social, economic and environmental well-being of communities and regions through i n i t i a t i v e s taken by citizens i n collaboration with their governments, public institutions, community agencies or other organizations, that strengthen local decision-making and self-reliance, co-operative endeavour and broad participation i n community aff a i r s . (SPARC 1986, v i i ) In a recent report on CED the B.C. Working Group on CED stated that: CED i s a community-based and cornmunity-directed process that e x p l i c i t l y combines social and economic development and i s directed towards fostering the economic, social, ecological and cultural well-being of communities and regions. As such i t recognizes, affirms and supports a l l the paid and unpaid activity that contributes to the realization of this well-being. (B.C. Working Group on CED 1993, 2) In both statements, community control i s emphasized as the dominant feature, and references to integration and cit i z e n participation are included as central elements. The BC Working Group definition, the more recent of the two, shows how the f i e l d has moved towards an even more h o l i s t i c approach to CED as i t includes a broad reference to " a l l the paid and unpaid activity" and emphasizes a more general sense of "well-being". 24 The p r i n c i p l e s t h a t d i r e c t these d e f i n i t i o n s i l l u s t r a t e t h a t CED a c t i v i t y i n B . C . t o d a y t ends t o f o l l o w a b l e n d o f t h e s t r u c t u r a l change and the c o m m u n a l i z a t i o n a p p r o a c h e s . B . P r i n c i p l e s The B . C . Working Group l i s t s the f o l l o w i n g p r i n c i p l e s ( B . C . W o r k i n g Group on CED 1993, 2 ) : 1. E q u i t y B e l i e f t h a t community members s h o u l d have e q u i t a b l e a c c e s s t o community d e c i s i o n - m a k i n g p r o c e s s e s , r e s o u r c e s and b e n e f i t s o f CED p r o j e c t s . 2. P a r t i c i p a t i o n Encourage a c t i v e p a r t i c i p a t i o n o f a l l members o f the community and work t o remove the b a r r i e r s t h a t l i m i t the p a r t i c i p a t i o n o f m a r g i n a l i z e d c i t i z e n s . 3 . C o m m u n i t y - B u i l d i n g Work towards b u i l d i n g a sense o f community b y f o s t e r i n g r e l a t i o n s h i p s o f a c c e p t a n c e , u n d e r s t a n d i n g and m u t u a l r e s p e c t . 4 . C o o p e r a t i o n and C o l l a b o r a t i o n Encourage r e l a t i o n s h i p s b o t h w i t h i n communit ies a n d between communit ies b a s e d on c o o p e r a t i o n and c o l l a b o r a t i o n . 25 5. Integration Holi s t i c approach that addresses social, economic, cultural and ecological dimensions of community well-being. 6. Interdependence Recognize that the local community exists within a larger context and that i t s decisions can have an impact far beyond i t s own boundaries. 7. Living within Ecological Limits Encourage processes, structures and i n i t i a t i v e s that respect ecological limits and support work that i s sustaining, regenerating and nurturing of both the community and the earth. 8. Self-Reliance and Community Control Build on local strengths, creativity and resources, and seek to decrease dependency on, and vulnerability to, outside economic interests. Support decentralized, non-hierarchial decision-making processes that strengthen the autonomy of the individual, the community and the region. 9. Capacity-Building Encourage the acquisition of relevant s k i l l s and the development of supportive structures and institutions. 26 10. Diversity Encourage economic activates that are diverse and appropriate to the expressed needs within the community and region. 11. Appropriate Indicators Monitor and evaluate progress through community-derived and appropriate economic, social, cultural and ecological indicators, rather than through conventional economic measures and standards. These same points are reiterated in one form or another throughout the CED literature. 1 2 For instance, Nozick's five basic principles of CED, self-reliance, sustainability, diversity, human needs and democratic processes are a l l emphasized under the umbrella of "holistic thinking inspired by Schumacher" (Nozick 1990, 15) : 1. Economic self-reliance of communities as opposed to dependence on outside economic forces. 2. Ecological and economic sustainability: development that emphasizes diversity and quality over quantity. 3. Development geared to human needs both material and non-material as opposed to the sole accumulation of material wealth. 27 4. Empowerment of communities through self-management and local control, using democratic processes that maximize community and grassroots participation. 5. Endogenous development stemming from the unique history and culture of a community as opposed to uniform development based on a set of corporate standards or socially defined "norms". In practice, there are few CED i n i t i a t i v e s that are able to adhere to a l l of these principles but many groups working i n the f i e l d of CED i n B.C. do attempt to model their organizations on these types of principles. There are research organizations like the Social Planning and Research Council of BC and the WomenFutures CED Society, that are devoted to researching, planning and networking i n support of CED. There are educational institutions such as The School of Community and Regional Planning at the University of Br i t i s h Columbia and the CED centre at Simon Fraser University that offer CED and community planning courses. At the community level, there are numerous non-profit organizations and voluntary groups devoted to creating local employment and providing community social services and training (Clague, 1985, 4). There are workers' co-operatives and even a few barter/exchange organizations that round out the l i s t of the types of groups i n B.C. that are attempting to offer alternatives to traditional mainstream economic development approaches. 28 The CED approach has emerged as an alternative to traditional approaches to economic development because i t offers a different perspective on the role of business and economic structures i n fostering community development. Our traditional economic institutions are not structured to meet basic human needs. Promoting economic growth i s the main goal of conventional approaches to economic development where increases i n employment and profit are used as the standards to measure success. With the CED approach, the perspective on economic institutions i s skewed towards the interests of people. Fostering community well-being i s the main goal of the CED approach where issues of equity, quality of working l i f e , s t a b i l i t y , sustainability and community self-reliance are used to guide decisions. As noted earlier, people i n communities across Canada are concerned about unemployment and the impacts of globalization, about the degradation and depletion of natural resources, and about having access to adequate social services. They have become interested i n experimenting with CED approaches because they realize that they cannot rely on the "invisible hand" of the market or the "long arm" of government to solve a l l of their problems. One type of economic structure that i s particularly well-suited to meeting the wide ranging demands of the CED approach i s the co-operative. Co-operatives, with their equitable principles and democratic nature, make ideal CED institutions. Co-operative structures reinforce many CED principles and ensure that the needs 29 of people are always an integral part of the decision-making process. The following chapter i s dedicated to exploring the potential of co-operatives to contribute to the CED approach. 30 3.0 COOPERATIVES IN CANADA During the review on CED approaches, co-operatives were identified as one of many different types of institutions that can be used to achieve CED goals. This chapter, which i s divided into three sections, w i l l take a detailed look at co-operatives and what they have to offer the CED movement. 3.1 COOPERATIVE DEVELOPMENT There i s a long and diverse history of co-operative development i n Canada. In order to understand the nature of today's co-operative movement and what i t has to offer CED, i t i s important to understand the motivations of the early co-operators and how their ideas have been incorporated into co-operative development over time. Co-operatives of one type or another have been operating i n Canada since the early 1900s. The origins of the Canadian movement date back to the 1850s in England and the Rochdale Society of Equitable Pioneers that launched the f i r s t successful consumer co-operative. There were a variety of Utopian co-operative experiments i n the early 1800s but i t was Rochdale that marked the beginning of successful co-operative structures. 31 3.1.1 History A. The Rochdale Movement The history of the co-operative movement i s d i v i s i b l e into three phases. The Utopian or pre-Rochdale phase from 1800 to 1850, the Rochdale movement phase from 1850 to 1950, and the post-Rochdale or systems phase which began about 1950 (Melnyk 1985, 6) . Pre-Rochdale Utopian Phase (1800-1850) According to many historians, the origin of modern co-operative institutions can be found in the ideas of the European thinkers of the late eighteenth and early nineteenth century (McGillivary and Ish 1992, 8) . French Utopian socialists St. Simon (1760-1825) and Charles Fourier (1772-1837) and the English industrialist Robert Owen (1771-1858) believed that a "return to the small agrarian-style village community" might stave off the effects of the new capitalist industrialization (Melnyk 1985, 6) . Their ideas led to various experiments with Utopian co-operative communities i n France and England, most of which were not successful (Fairbairn et a l 1991, 20). The f i r s t modern co-operatives arose i n the midst of the social turmoil of the nineteenth century. 1 3 Nineteenth century Europe was a time of rapid urbanization, industrial growth and technological change. Those with access to capital, the owners of business, controlled the means of production. With control over the means of production and no shortage of labour, owners were able to control labour and dictate d i f f i c u l t working conditions. 32 The Rochdale Movement (1850-1950) The formation of the Rochdale Co-operative was a response primarily by the working/middle class to the adverse economic effects they were experiencing: Since the members of this group did not have access to enough capital on an individual basis to be able to participate as owners of firms, they decided to join together, pool their capital, and attempt to accumulate wealth by acting together. (Fulton 1991, 101) This i s where the influence of the early Utopian socialists comes i n because although the Rochdale pioneers were interested i n economic advancement and controlling sources of capital they were adverse to the excesses of capitalism. The pioneers followed "a communitarian ethos which prefers the distribution of wealth on the basis of effort rather than capital and the meeting of member needs rather than the vagaries of a solely prof it-oriented marketplace" (McGillivary and Ish 1992, 5) . The goal of the Rochdale pioneers was Utopian. They wanted to create a self-supporting "home colony" (Melnyk 1985, 6) i n which to reassert community and human needs as the guiding force of production (Fairbairn et a l 1991, 6) . They wanted to have a p o l i t i c a l voice i n their group affairs, and they wanted to develop education and social services, which at the time were inadequate (Fulton 1991, 101). The society's articles included matters such as construction of homes, manufacturing, farming, education, and self-government (Melnyk 1985, 6) . Consumer co-operative stores were viewed as the f i r s t step in this multi-functional approach and in 1844 the f i r s t successful consumer co-operative store was opened 33 by the Rochdale Society of Equitable Pioneers i n England (Melnyk 1985, 6) . The operation of the store and of the society was guided by the following set of principles: These principles were that membership i n the Society would be open to a l l - - i t would be controlled democratically. A limited amount of interest was to be paid on capital, and, i n the event of a surplus i n any trading period, this was to be distributed to the members in relation to their purchases. Goods were to be sold on a cash basis solely, because of the d i f f i c u l t i e s caused by credit, and were to be sold at the current r e t a i l price.... The goods sold were to be of good quality. . . . There was to be a reserve fund set aside for education of members and non-members i n the ways of the Society, and p o l i t i c a l and religious neutrality was to be observed. (McGillivary and Ish 1992, 10) Unfortunately for the pioneers, operating the network of stores, which developed when the idea of consumer co-operatives became successful and copied, became an end i n i t s e l f . The original dream of a multi-functional co-operative community was abandoned as the Society turned i t s attention mainly to managing their network of stores (Melnyk 1985, 6). Even though the Utopian community ideal was never achieved, the Rochdale style of co-operatives helped build a sense of working-class identity and community within the new, market-driven society (Fairbairn 1991, 51) . The following figures provide insight into the success of the Rochdale approach. Twenty years after the founding of Rochdale, the Manchester Wholesale Society, the wholesale arm of the Rochdale Society, was started to service r e t a i l co-op stores which by that time had bui l t up 18,337 members. By 1877 the Wholesale Society was serving 588 societies with 273,351 members (Melnyk 1985,7) . By 34 the late 1800s i t was serving 1,133 r e t a i l stores representing 1,445,099 members (Melnyk 1985, 7). Over time the Rochdale aims and rules gained the status of "co-operative principles" (McGillivary and Ish 1992, 11) . Interpretation, application, and emphasis of the rules varied widely but i t was the Rochdale Society's "principles" that ultimately guided the development of co-operative institutions and enterprises throughout Europe, North America and parts of the rest of the world during the late 1800s and early 1900s (McGillivary and Ish 1992, 11). The International Co-operative Alliance (ICA) was formed i n 1895 for the worldwide promotion of co-operation and by 1930 the success of the movement made the need for more formalized standard principles evident (Melnyk 1985, 8) . In 1937 the ICA undertook the task of reformulating and restating the "co-operative principles" . These same reformulated Rochdale aims and rules continue to inform co-operative definition and legislation i n several countries today including Canada, Britain, and the United States (McGillivary and Ish 1992, 11) . These "principles" w i l l be revisited i n greater detail i n the latter part of this chapter. Post-Rochdale Phase (after 1950) The period between 1850 and 1950 was a time of ideological fervor i n the co-operative movement. Co-operatives were trying to win the world (Melnyk 1985, 6) . By the early 1950s the dream of replacing the private sector had disappeared and had been replaced 35 by the theory of co-operatives as a "third sector" i n a capi t a l i s t economy behind the private and public sectors (Melnyk 1985, 18) . In the post-Rochdale or systems phase i n which we are presently l i v i n g co-operatives practice co-existence rather than conversion and according to George Melnyk, author of The Search For Community: From Utopia to a Co-operative Society, are "primarily concerned with systems and managing their success" (Melnyk 1985, 6) . Melnyk (1985) divides co-operatives into four distinct p o l i t i c a l categories: l i b e r a l democratic, Marxist, socialist, and communalist. He characterizes the Canadian co-operative movement, and the Rochdale movement in general, as "lib e r a l democratic," defined i n terms of i t s relationship to capitalism: The essence of lib e r a l democratic co-ops i s successful competition with capitalism through short-term and immediate benefits to i t s members. This pragmatic approach appealed to the person's self-interest rather than to his idealism and i t demanded a reconciliation between the co-op and the private sector. (Melnyk 1985, 17) There are three basic characteristics that distinguish l i b e r a l democratic co-ops from Marxist, socialist, or communalist co-operative ventures: an emphasis on private property, a basic tolerance of capitalism, and a pragmatic uni functional ism (Melnyk 1985, 15). These are the characteristics that evolved out of the Rochdale model and have come to define most of the co-op institutions prevalent today in Western Europe and North America (Melnyk 1985, 15). 36 Melnyk believes that the current post-Rochdale phase i s i n "ideological c r i s i s " and that a renewed model for co-ops i s needed. He believes that there i s a " c r i s i s of conscience" presently affecting the movement which stems from the continued survival of the types of ideals which were present during the Utopian phase of co-operative development, 150 years ago (Melnyk 1985, 8) . Canadian sociologist Jack Craig tends to view the situation less desperately when he characterizes the "current phase of co-operative development as one embracing a variety of ideologies which stem from the different social movements and from the specific nature and goals of the individual co-op" (McGillivary and Ish 1992, 15) . Melnyk's concern for ideology reveals a general tension within the current co-operative movement which exists between those who embrace the status quo managerial approach and those who push for a return to a more ideologically based approach. B. Co-operative Movement i n Canada Historically, co-operative institutions have developed i n Canada on a regional basis. According to Melnyk they have done so "because of the cultural differences i n a bilingual country, because of the different regional economies that have developed i n Canada, and because of the varying historical periods during which the country was settled and developed" (Melnyk 1985, 20) . In the study Patterns and Trends of Canadian Co-operative Development, that came out of the Co-operative Future Directions Project i n 1982, Canadian co-operatives are described as "emerging out of 37 local i n i t i a t i v e s , immigration patterns, and group interests" (Co-operative Future Directions Project 1982, 12). The following section reviews the development of the co-operative movement i n Canada and i n particular, how the motives for development have varied over time and from region to region. Early Years In Western Canada the f i r s t co-operative ideas were introduced with the immigration of American farmers to the Prairies i n the 1870s. As the West became settled and the economy began i t s transformation from one based on the fur trade to one based on wheat, co-operative ideas began to take root (Melnyk 1985, 21) . The impetus for co-operative development i n Western Canada came from four main sources. One source for co-operative development involved "the long history of exploitation by prof it-motivated institutions with head offices located outside the region" (Melnyk 1985, 22) . Pioneering farmers who had suffered the hardship of homesteading were frustrated by the monopoly held by the grain elevator companies. To fight unfair practices and express their discontent at central Canadian domination, farmers organized their own co-operative wheat pools (Melnyk 1985, 20) . The f i r s t real gains for co-operation i n Canada were the establishment of the prairie wheat pools. Their success encouraged the formation of agricultural marketing co-operatives throughout the country (McGillivary and Ish 1992, 13) . 38 A second source for co-operative development during the early-years i n Western Canada came from the need for "capital for better equipment so workers could compete i n a technologically expanding economy" (McGillivary and Ish 1992, 12) . Just as the workers i n a rapidly industrializing Europe turned to co-operative methods to gain access to capital for improved technology and communications, the farmers i n Western Canada organized successful co-operative institutions to be able to modernize equipment and continue to adapt to the changing rural economy. A third element providing the impetus for co-operative development was the desire for mutual economic gain while operating within the security of group ac t i v i t i e s (McGillivary and Ish 1992, 12) . Although "discontent at central Canadian domination" and the "need for capital for equipment" played parts, the simple p o s s i b i l i t y of a financial return went a long way i n leading farmers and labourers throughout the country to organize successful co-operative institutions such as the grain elevators and the agricultural marketing agencies (Co-operative Future Directions Project 1982, 9). The cause of agrarianism was the fourth important element to influence the development of co-operatives i n Western Canada. Agrarianism encompasses "a rejection of urban evils, a belief that farm l i f e was at i t s base co-operative, and a preference for the small community i n control of i t s economic and social l i f e " (McGillivary and Ish 1992, 12). There were farmers at this time who regardless of differences of geography, specialization, or 39 wealth, "increasingly saw themselves as a distinct class, ignored by government and exploited by interest groups, " and who "protested the special position of manufacturers, resented the influence of corporations, and objected to the privileges of c i t y dwellers" (Co-operative Future Directions Project 1982, 10). These farmers were attracted to co-operative methods because "they provided ways to bypass the exploiters of rural society and they denounced capitalism" (Co-operative Future Directions Project 1982, 10) . There was a spontaneous array of co-operative experiments occurring a l l across Canada i n the late 1800s and early 1900s and although many of these early, somewhat Utopian experiments met with failure, they s t i l l played an important role i n introducing co-operative methods and ideology to a wide variety of people i n a large number of places. As a result, the issues of urbanism, industrialism, and morality remained basic to the Canadian movement for many years (McGillivary and Ish 1992, 13) . At the same time as the agriculturally based Western Canadian co-operative movement was developing, the influence of immigration patterns was being f e l t i n the consumer co-operative movement. Consumer co-operatives made significant inroads i n Canadian c i t i e s during the early 1900s as many European immigrants brought their experience with co-operative stores to Canada (Co-operative Future Directions Project 1982, 15). 40 Co-operative banking also made substantial progress during the early years of the century. By 1900, the needs were intense. Banks did not lend to middle and lower income earners. . . farmers who needed cash to purchase equipment, buildings and livestock and urban dwellers who needed money for furniture and housing, were forced to pay usurious rates or go without" (Co-operative Future Directions Project 1982, 16). The f i r s t credit union or "caisse populaire", was established i n Quebec i n 1901 by a legislative reporter named Alphonse Desjardins, who had become concerned about the severe credit problems i n Canada during the 1890s (Melnyk 1985, 20) . This i s where the cultural differences of a bilingual country affected an aspect of co-operative development. The caisse populaire movement grew rapidly because the powerful Catholic Church promoted the credit unions in every parish as "expressions of Quebecois loyalty and piety" (Melnyk 1985, 20). In Quebec "caisse populaires" were expressions of francophone nationalism. In the rest of the country, "caisses populaires" provided a model for the development of much needed co-operative financial services. In Atlantic Canada during the 1920s and 1930s, two priests recognized the need for adult education i n the region. They started a local i n i t i a t i v e that began as a way to encourage improved adult education and ended up with a movement, the Antigonish Movement, that fostered co-operative development throughout the region (Melnyk 1985, 20) . Through small group discussions, the priests were "able to mobilize large segments of the population to launch economic organizations for community improvement" (Melnyk 1985, 20). The movement touched fishermen, 41 farmers, and miners through credit unions, co-operative canneries, and marketing co-operatives. By 1934, 952 study clubs had been formed i n Nova Scotia and 150 co-operative enterprises had been set up (Melnyk 1985, 20) . With co-operative success i n the countryside and the Atlantic region, the rise of consumer co-operatives i n the c i t i e s and the emergence of co-operative credit i n Quebec, some co-operative leaders began to nurture the idea of a "co-operative commonwealth" (Co-operative Future Directions Project 1982, 19). This "win the world" approach characterized the ideological fervor that pervaded the co-operative movement during i t s early development i n Canada. The Depression Years The Depression of the Thirties was a time when the co-operative principle of democratizing the economic system and defending the livelihood of ordinary people found i t s widest appeal (Melnyk 1985, 23) . According to the study produced by the Co-operative Future Directions Project: The economic problems and social ferment of the 1930s generated debate i n co-operative circles about the purpose of the movement. The strongest vision was the desire to eliminate "poverty i n the midst of plenty"... .On an individual level, [the co-operative movement] taught t h r i f t and encouraged group action; on a community level, i t could provide services and amass resources; on the national level i t promised greater democracy and an alternative economic order. (Co-operative Future Directions Project 1982, 35) The Depression years consolidated the co-operative movement' s special relationship with Western Canada as the hardships faced by farmers encouraged a l l sorts of new ventures. Co-operatives 42 organized education and social programs i n every part of the region (Melnyk 1985, 23). During the Depression years the influence of co-operatives was also confirmed i n Atlantic Canada as the Antigonish Movement became an important regional vehicle of survival for ordinary people (Melnyk 1985, 20). Co-operative stores and their associated wholesale operations were the hardest hit during the depression as many stores were forced to close due to the worsening credit circumstances of their cash-poor members (Co-operative Future Directions Project 1982, 30) . The marketing co-operatives fared much better during these times, particularly once the war broke out and they were provided with shelter i n the form of orderly wartime marketing arrangements (Co-operative Future Directions Project 1982, 35). The Movement /After 1950 After World War II the desire to "democratize the economic system and defend the livelihood of ordinary people" died down and the movement began i t s shift towards an emphasis on "self-interested pragmatism" (Melnyk 1985, 24). The changing Canadian economic environment discouraged co-operative utopianism: The Canadian co-operative movement lost much of i t s ideological edge in the late 1940s and 1950s. The agrarians and Marxists were out, Utopians and social democrats were declining, the religious activists lost their momentum, and the 'co-operative sector' provided direction without passion. As Canadian society became less ideological and more materialistic, the Canadian co-operative movement became more cautious and less controversial. (McGillivary and Ish 1992, 14) 43 The Co-operative Future Directions Project study points to the late 1940s and early 1950s as "the beginning of a great social transformation throughout Canada. The modern c i t y based on the automobile and suburban living, became the focus for national growth; a highly individualistic ethos i n which community and co-operative activism weakened" (Co-operative Future Directions Project 1982, 36). The impulse for social reform quietly dissipated and then disappeared as the co-operative movement entered i t s "systems" phase of expanding and augmenting i t s corporate structures. The large Canadian co-operatives that survived the Depression concentrated on developing a pragmatic relationship with capitalism (Melnyk 1985, 24). Current Phase - 1980s and 1990s It would seem from the literature that the Canadian co-operative movement i s currently s t i l l i n the "systems" phase of expanding and augmenting i t s corporate structures (Melnyk 1985, 24) . The theme of the June 1994 Triennial Congress of Credit Unions and Co-operatives certainly seems to provide support for this view with i t s t i t l e : "Interdependence: Co-operative Linkages" and with issues like "youth, strategic alliances, organizational renewal and diversity" to guide discussions. The co-operative movement may not be enjoying the same sort of ideological fervor that was present during the early years of development, but given the d i f f i c u l t economic times co-operatives 44 and other businesses have been facing i n recent years this i s understandable. Many of the country's co-operative leaders are finding i t necessary to focus their energies on ensuring that their organizations remain healthy and maintain their place alongside the more traditional business institutions. The Canadian co-operative movement has a cumulative membership of more than 12 million 1 4 (Co-op Working Party Report 1993, 3) . Co-operatives are not dominant i n the Canadian economy as a whole but they do represent a powerful, diversified sector that plays a c r i t i c a l role i n smaller communities and i n particular regions and industries (Fairbairn et a l 1991, 1). Co-operatives continue as a v i t a l force i n Canadian rural l i f e , where about 70% of the grains that are marketed from the Prairies flow through co-ops and about half of a l l dairy products produced i n Canada come from co-operatives (Co-op Working Party Report 1993, 3). The consumer co-operatives that started i n the early years of the century as important movements i n Western Canada, Quebec and Atlantic Canada, today are joined together i n supporting large wholesale endeavors, particularly Federated Co-ops, Co-op Federee, and Co-op Atlantic (Co-op Working Party Report 1993, 3) . The caisse populaire system of co-operative financial institutions that began i n Quebec in the early 1900s now forms the heart of the Quebec economy (Co-op Working Party Report 1993, 4) . The credit unions that started in the rest of the country i n the 1930s have grown to become extremely important i n several 45 provinces, most notably Saskatchewan and Br i t i s h Columbia (Co-op Working Party Report 1993, 4) . 3.1.2 Principles The Rochdale pioneers provided the original rules but the principles of co-operation have never been static. They have been reinterpreted and reformulated over the years. The organizational f l e x i b i l i t y of these principles i s the cornerstone of co-operative development. It i s the very broad definition of co-operation "as people working together i n a s p i r i t of self-help and mutual aid for their common good" that allows co-operatives to be adapted to meet a wide variety of needs (Melnyk 1985, 4). The Rochdale pioneers were interested i n pooling their resources for economic advancement but with an egalitarian twist. They believed i n "the distribution of wealth on the basis of effort rather than capital and the meeting of member needs rather than the vagaries of a solely prof it-oriented marketplace" (McGillivary and Ish 1992, 5) . Their beliefs are reflected i n the original Rochdale principles that included the following ideas: 1. Membership in the Society would be open to a l l . 2. Membership would be controlled democratically. 3. Limited interest was to be paid on capital. 4. Surplus was to be distributed to members i n relation to their purchases. 5. A reserve fund was to be set aside for the education of members and non-members i n the ways of the Society. 46 6. P o l i t i c a l and religious neutrality was to be observed (McGillivary and Ish 1992, 10). As mentioned earlier, the principles of co-operation have not remained static, they have been interpreted, reinterpreted and reformulated over the years. The International Co-operative Alliance (ICA) has reformulated the Rochdale principles twice, in 1937 and 1966. A third reformulation project was announced at the ICA Stockholm Conference i n 1988 and i s to be completed by 1995 (McGillivray and Ish 1992, 5). The 1966 ICA Congress gave us the principles that currently define co-operative activity throughout the world. Those principles, that s t i l l reflect many of the original Rochdale aims and rules, are as follows: INTERNATIONAL CO-OPERATIVE PRINCIPLES15 1. Membership of a co-operative society should be voluntary and available without a r t i f i c i a l restriction or any social, p o l i t i c a l or religious discrimination, to a l l persons who can make use of i t s services and are willing to accept the responsibilities or membership. 2. Co-operative societies are democratic organizations. Their affairs should be administered by persons elected or appointed i n a manner agreed by the members and accountable to them. Members of primary societies should enjoy equal rights of voting (one member, one vote) and participation i n decisions affecting their societies. In other than primary societies the administration should be conducted on a democratic basis i n a suitable form. 3. Share capital should only receive a s t r i c t l y limited rate of interest i f any. 47 4. Surplus or savings, i f any, arising out of the operations of a society belong to the members of that society and should be distributed in such manner as would avoid one member gaining, at the expense of others. This may be done by decision of the members as follows (a) by provision for development of the business of the co-operative; (b) by provision of common services; or (c) by distribution among the members i n proportion to their transactions with the society. 5. A l l co-operative societies should make provision for the education of their members, officers, and employees and of the general public, i n the principles and techniques of Co-operation, both economic and democratic. 6. A l l co-operative organization, i n order to best serve the interests of their members and their communities, should actively co-operate i n every practical way with other co-operatives at local, national and international levels. In their paper, Co-operatives in Principle and Practice, Anne McGillivary and Daniel Ish summarize these principles as representing or reflecting three things: "the actual practice of co-operatives; the minimal requirements defining a co-operative for the purposes of the ICA; and the attempt of the movement to set and maintain a particular standard of operation" (McGillivary and Ish 1992, 20). If the principles are meant to reflect the state of the movement then i t makes sense that they would continue to be reinterpreted and reformulated as the movement changes. In fact, the 1995 review i s a good example of how co-operative principles can be changed to reflect the concerns of the times. The essential s p i r i t w i l l remain the same but i n 1995 the ICA w i l l be looking at ways to incorporate issues such as the environment, gender, capitalization, democratic control i n large organizations and 48 government relations into i t s standard principles (Co-op Working Party Report 1993, 6) . The ICA i s made up of 70 countries representing 700 million individual memberships (Co-op Working Party Report 1993, 5) . Co-operatives exist under regimes spanning capitalism to communism and socio-economic conditions of almost every kind. (McGillivary and Ish 1992, 7) The organizational f l e x i b i l i t y of co-operative principles i s the cornerstone of co-operative development. Co-operation meets a wide variety of human needs and has found institutional expression in everything from banking to Utopian communities (Melnyk 1985, 3) . The important dimension i n this adaptability i s that the co-operative form of business i s not so much driven by profit as by the desire to bring fairness, equity and justice to the marketplace (CCA Pamphlet n.d.). To understand the co-operative concept and i t s development, one must take a broad view because i n i t s simplest form a co-op i s : ... an association of people who have combined their resources of capital and labour to capture greater or different benefits from an enterprise than i f the business were undertaken individually. (Fairbairn et a l , 21) Basically, the co-operative model offers economic self-help through the pooling of resources. Through their tradition of self-help and mutual aid, co-operatives have made a major contribution to the development and s t a b i l i t y of communities across Canada and throughout the world. 49 3.2 CO-OPERATIVES IN PRACTICE Although co-operatives are organized around common principles, they vary i n size, area served, a f f i l i a t i o n , legal status, financial structure, membership group and goals. They run many different types of businesses and provide a variety of services to their members. 3.2.1 Types of Co-operatives A. Credit Unions Credit unions are financial co-operatives that provide a f u l l range of banking services to their members. They can be small and community-based, or very large. Over 9 million Canadians are members of credit unions or caisses populaires with assets over $64 b i l l i o n . In 1989 the Quebec Desjardins caisse populaire system had more than 1600 outlets involving 4.4 million members and $34.7 b i l l i o n of assets (Quarter 1992, 24). The 1,301 credit unions i n the rest of Canada accounted for a further 4.3 million members and $29.8 b i l l i o n of assets (Quarter 1992, 24). Credit unions play an important role i n many communities. Because they are locally-controlled, credit unions have the a b i l i t y to reduce dependence on externally-control led banks and can, depending on management policies, prevent leakages of savings and encourage local entrepreneurship by reinvesting i n their own communities (Boothroyd 1991, 5) . 50 As consumer-owned financial institutions, they have pioneered innovative technology, like daily-interest savings accounts and automated t e l l e r machines and, at the same time, have provided community-based services to their members (CCA Pamphlet 1992). The co-operative financial sector also includes insurance and trust companies. Insurance co-operatives across Canada employ over 7,500 individuals, provide service to 9 million policy holders and are among the largest insurance companies i n Canada (CCA pamphlet 1992). B. Marketing Co-operatives (aka Producer Co-operatives) Marketing co-operatives are joint marketing organizations for primary producers such as farmers and fishers. The common feature of marketing co-operatives i s that the members are independently employed, most often self-employed, and establish a co-op to provide themselves with a common service, usually marketing (Quarter 1992, 19) . In this case, a member's use of the co-operative i s measured by what he or she s e l l s to i t rather than what i s bought from i t . Broken down by sector, farm-marketing co-operatives have a 68% market share for grain and oilseeds, 56% for dairy products, 28% for poultry and eggs, 26% for honey and maple products, 18% for livestock and 15% for fruits and vegetables. In total, Canada's farm marketing co-operatives have 188,914 members, more than 23,000 employees, and transacted $8.7 b i l l i o n of business i n 1989 (Quarter 1992, 18) . 51 Fishing co-operatives process and s e l l much of Canada's seafood to markets in Canada and around the world (CCA 1992) . There were 61 these i n 1989, situated i n the Atlantic provinces and the West Coast. There sales were $184.9 million. (Quarter 1992, 19). A variation of the marketing co-operative for primary producers i s the artisan co-operative, like those set up by the Inuit i n the Northwest Territories and the Cree and Inuit of northern Quebec. There are now 34 artisans' co-operatives i n the Northwest Territories, and 11 such co-operatives i n northern Quebec (Quarter 1992, 19). C. Consumer Co-operatives Although farm marketing co-operatives have achieved the greatest business success among Canadian co-operatives, the Canadian movement i s based primarily upon consumers or users of a service. There are many types of user-based co-operatives providing a wide range of products and services, from farm supplies, food ret a i l i n g and wholesaling, to daycare, healthcare, u t i l i t i e s operations, communications, recreational equipment, and even burial services. 1 6 Although each of these services differ, the common denominator i s that the people who use the co-operative for i t s services are also i t s members (Quarter 1992, 19) . In Canada today, r e t a i l co-operatives are concentrated i n the West and i n the Atlantic region. Co-op Atlantic acts as a wholesaler and organizer of 176 outlets i n communities throughout 52 the Atlantic Region (Quarter 1992, 19). In 1989, i t had sales of $480 million, making i t the seventh largest Canadian-owned corporation i n the Atlantic provinces (Quarter 1992, 19) . In the West, the Saskatchewan-based wholesaler, Federated Co-ops, services 360 r e t a i l co-operatives with $2.2 b i l l i o n of sales i n 1989 (Quarter 1992, 19) . Co-operative activity i n the consumer sector ranges from these large scale wholesalers and their network of stores to the small neighbourhood-based food stores and buying clubs i n local communities where each store i s owned and democratically controlled by the people who shop i n i t (Quarter 1992, 21). There are nine healthcare co-ops i n Canada with a total membership of 227,823 benefiting from insurance programs, community c l i n i c s and dental services (Simpson 1991, 136). Childcare co-ops are growing rapidly i n Canada. In 1989, there were estimated to be about 800 operating both daycares and nursery f a c i l i t i e s (Simpson 1991, 136). D. Worker Co-operatives While consumer co-operatives are owned by their customers, worker co-operatives are owned by their employees. From the outside, a workers' co-operative may look like any other business, but i t s internal structure i s very different. Here labour "hires" capital rather than the other way around. A worker co-operative exists to provide members with stable employment i n a workplace they control (CCA Pamphlet 1992). 53 Worker co-operatives operate i n a wide range of fiel d s from the printing industry, to r e t a i l f a c i l i t i e s , plywood and pulp mills, communications and advertising, natural food wholesaling, retailing, and publishing but i n s t a t i s t i c a l terms, the worker co-operative i s much less prominent than any o f the other models, both in business scale and membership (Quarter 1992, 27 and Simpson, 135) . In Canada, i n 1989, there were about 300 worker co-operatives with 6,140 members and $223 million of revenues (Quarter 1992, 27) . About 60% of Canada's worker co-operatives are located i n Quebec, where i n 1984 the Parti Quebecois government put i n place a system of development groups and a government corporation to assist with financing (Quarter 1992, 27). Quebec's 41 forestry co-operatives account for 60% of the business and about 50% of the membership of a l l worker co-operatives i n Canada. The only other significant cluster i s i n the natural foods business, where such worker co-operatives as CRS, Wild West and PSC dominate the wholesale trade on the West Coast (Quarter 1992, 27). E. Housing Co-operatives In a housing co-operative, the residents (or users of the service) are also members, each having one vote i n electing the board and i n policy committees. In most cases, the co-operative owns the housing collectively and leases i t back to individual members. These co-ops offer middle ground between private ownership and renting. In this situation members have much more 54 control than tenants, over both costs and occupancy, because they are, i n effect, their own landlords (CCA Pamphlet, 1992). Since the mid-1970s, co-operatives have taken hold as a form of social housing. The co-op housing sector has b u i l t more than 60,000 units creating 60,000 person-years of construction related employment and 500 f u l l time jobs (CCA Pamphlet, 1992) . As of 1990, there were about 1,400 housing co-operatives with more than 200,000 residents, and with a book value of more than $2.2 b i l l i o n (Quarter 1992, 21). By the end of the 1980s there were 6,916 co-operative corporations i n Canada with a total membership exceeding 21 million people. Twelve million Canadians belonged to at least one co-operative corporation, and the assets of the movement were $105.9 b i l l i o n (Quarter 1992, 15) As this review has shown some of these co-operatives are small and community-based, such as the grocery-buying clubs found i n many communities or the f i s h processing and marketing co-ops on the East Coast. Other co-ops have become very big businesses. The Federated Co-op chain of r e t a i l department stores, the province wide wheat pools i n each of the Prairie provinces, and the Inuit art and consumer co-ops have a l l become significant economic forces. In either case, small or large, as relevant contributors to the Canadian economy co-operatives have a v i t a l role to play i n the economic and social l i f e of our country. The current strength and diversity of the co-operative sector encompass many of the c r i t i c a l areas necessary for local economic development. 55 3.3 CaOPERATIVES AND CED As discussed i n chapter two, there i s a variety of opinion about what constitutes CED activity. The definition of CED that includes ideas of self-reliance and improving the s t a b i l i t y and sustainability of a community economy by reducing dependencies on the market and the state i s the definition that w i l l be used as a reference point for the following section. With this view of CED, i t i s the process of development, the quality of an economy, and the concept of equity that matter most. Diversity i s encouraged and human needs are brought into the economic picture through the participation of community members i n planning and decision-making processes. The co-operative model, with i t s long history of development, wide variety of structures, and durable principles, i s very well-suited to the goals of CED. The following section explores the potential of co-operatives to contribute to the CED approach. 3.3.1 Co-op Development and its Contributions to CED A. Similarities i n Development The early days of co-operative development i n Canada echo throughout today's CED movement. Just as farmers i n the early 1900s were discontented with central Canadian domination, communities interested i n CED today, are frustrated by decisions being made in the head offices of transnational companies. The cause of agrarianism, an impetus for early co-operative 56 development, with i t s rejection of "urban evils", disapproval of capitalism and preference for the small community i n control of i t s economic and social l i f e , holds similarities to the "caring and sharing" approach of some CED activists today. With this approach, quality of l i f e takes precedence over material wealth as a guiding force i n decision-making. Emphasis i s placed on limiting the alienating effects of our technologically driven world by developing an economy where people enjoy co-operating and are truly concerned with each other's well-being. Ideas central to the early days of the co-operative movement such as: benefiting from the pooling of resources, democratizing the economic system, defending the livelihood of ordinary people and eliminating poverty i n the midst of plenty, are a l l shared by today's CED movement. The motives and ideals of today's CED movement are reminiscent of the early days of the Canadian co-operative movement. The co-operative movement i s now a well-established force i n the Canadian economy. Today's CED movement, s t i l l i n i t s "early days", could benefit a great deal from experience gathered by the co-operative movement during i t s development. For example, the capacity to manage the relationships and tradeoffs between economic and social goals i s well developed i n many co-operatives (Newman et a l 1986, 27). Many CED i n i t i a t i v e s could benefit from insights into this balancing process as well as from the technical assistance, training or advice that could be provided by many co-operators. 57 Over the years, co-operators have also become proficient i n interacting with government programs and mobilizing community support and involvement (Newman et a l 1986, 27) . They have been able to use common goals as a basis for creating strong support organizations at provincial, regional and national levels (Newman et a l 1986, 27). If the CED movement i s to take root i t w i l l need to interact with government programs and to develop a broad network of support institutions. The Canadian co-operative sector should be able to offer useful guidance i n both of these areas. B. Economic Aspects of Co-operation The Co-operative sector represents an economic force i n Canada. As the 1984 Report of the National Task Force on Co-operative Development stated: Co-operative organizations play significant roles i n a l l regions of the country and i n many industries that are c r i t i c a l l y important to Canada. Co-operatives are also helping Canada to meet the challenge of creating long-term meaningful employment. (National Task Force 1984, 14) Co-operatives, with their strong community roots, attempt to offer permanent development. They also provide communities with the opportunity for local control and with a response to the impacts of globalization and market deficiencies. Local Control The key to CED i s local control. Co-operatives are formed to meet the needs of individuals. They are l o c a l l y owned and the people i n control of the co-operative understand the problems and 58 needs of the local population. The democratic nature of the co-operative structure means that everyone who has a stake i n the outcome of a decision has the power to contribute to making that decision. This a b i l i t y to respond to the needs of people, rather than s t r i c t l y the needs of capital, by involving people i n important economic decisions means that co-operatives can help decrease dependency on outside economic interests. Response to Market Deficiencies Many CED in i t i a t i v e s began as reactions against the traditional market system to provide enough employment or as reactions against the neglect of social and community services by the state. By serving these unmet needs and responding to market deficiencies co-operatives are fundamentally a form of community development. For decades, co-operatives have arisen where other institutions - investor-owned businesses, government - l e f t a deficiency. The process of developing and sustaining a co-operative involves, i n miniature, the process of developing and promoting community s p i r i t , identity, and social organization. This grassroots orientation i s a reflection of local people taking the i n i t i a t i v e to understand the problems they face and to develop solutions. (Ketilson et a l 1992, i) Permanent Development The grassroots orientation means that co-operatives have traditionally been organized by people associated i n one kind of community or another. For instance the community may be geographic or i t may be by kind of work (e.g., fishers) or i t may be by need (e.g., housing). Regardless of their base, however, co-operatives 59 survive and prosper because they meet the needs of individuals. Co-operatives have strong community roots and are committed to their communities. Generally, co-operatives are interested i n long term benefits. They do not close their doors to move to another province or country because of government assistance or a cheaper work force (Co-operative Working Party Report 1993, 7) . Retain Earnings i n the Community An important element i n CED strategies i s to reduce the outflow of income from the community. Earnings enter a community from government payments, external sources of investment, and exports of goods and services. The more of this income that i s kept i n the community the more there w i l l be to circulate throughout the local economy. The principal d i f f i c u l t y i n keeping income i n a community comes when people i n the community use these earnings to purchase goods and services outside of the community. The implication in this equation i s that there needs to be a balance between trying to bring income into the community through external investment, government, and export-oriented a c t i v i t i e s and trying to develop locally oriented ac t i v i t i e s that local people can control and where they can purchase the commodities they need. Investor-owned businesses tend to focus on the relatively more profitable export-oriented ac t i v i t i e s (Ketilson et a l 1992, 37) . This means that to provide the locally oriented industries that are required to sustain economic activity i n the community, other forms of ownership may need to be developed (Ketilson et a l 1992, 37) . 60 Co-operatives, given their concern about elements other than just profits, are excellent vehicles for developing these types of lo c a l l y oriented a c t i v i t i e s . Response to Globalization Many CED activists are concerned with managing the pervasive impacts of globalization and the ever changing whims of world markets. Co-operatives have characteristics that, according to Fairbairn, make them ideal institutions for the community response to globalization. Co-operatives mobilize community resources, train and develop community members and leaders, and link the community and i t s interests into the market economy. Co-operatives and co-operation also serve as a model for change and adaptation. Communities challenged by globalization require an alternative kind of development, and co-operatives have structures, ideas, and traditions ready to be applied. (Fairbairn 1991, 10) C. Social Aspects of Co-operation Co-operatives have an important social role to play i n the Canadian economy. Co-operatives, with their dedication to serving member needs, provide many socially needed but marginally economic services (e.g., day care co-operatives and health services co-operatives) . With their commitment to the democratic involvement of members, co-operatives encourage self-help and foster the development of local leadership. CED involves issues of adult education, social organization and empowerment. The co-operative model i s a means to an end for CED because even though a co-operative i s basically an economic enterprise that follows certain principles, a co-operative i s also 61 a process of adult education (Fairbairn 1991, 45) . Co-operative structures, depending on how the concept of co-operation i s characterized and defined, provide people with the opportunity to take charge and help themselves. By involving people i n the social and economic decisions affecting their lives, co-operatives enhance their understanding of democratic principles and promote the development of leadership s k i l l s . This democratic involvement may be the greatest contribution that co-operatives have to make to Canada (National Task Force 1984, x i i ) . As this section has shown, the co-operative model, i n general, has significant contributions to offer the CED approach. The CED movement could learn many lessons from the experiences of the established co-operative sector. As important economic and social forces i n the Canadian economy, co-operatives encompass many areas c r i t i c a l to the success of community development. By i t s very nature, the co-operative model, with i t s wide variety of structures, and durable principles i s well-suited to meeting the diverse needs of the CED approach. While the co-operative model, i n general, has significant contributions to offer the CED approach, i t i s the worker co-operative structure, i n particular, that holds the most promise as a tool for achieving the aims of CED. In chapter four a case study of CRS Workers' Co-operative provides hope that i t i s possible to achieve egalitarian goals i n the midst of a pr o f i t hungry economy. 62 4.0 CRS WORKERS' CO-OPERATIVE The purpose of this chapter i s to explore the potential role of worker co-operatives in CED by focusing on the contributions of a well-established, successful organization currently operating i n Br i t i s h Columbia. CRS Workers' Co-operative, which operates Horizon Distributors, a natural foods wholesaler, and Uprising Breads Bakery, a retail/wholesale bakery, w i l l be the organization that provides the foundation for this study. The f i r s t part of the chapter reviews the history of CRS to see what lessons might be learned from the nearly twenty years the co-operative has been i n existence. The nature of ownership, the way i n which the basic principles of co-operation have been incorporated into the overall structure at CRS, i s considered i n the second part of the chapter. The f i n a l part of this chapter contains a summary of specific contributions CRS has to offer the CED approach. 4.1 HISTORY OF CRS The key to the co-operative model i s the organizational 1 f l e x i b i l i t y of co-operative principles. CRS has seen a substantial amount of growth and structural change since the early days when i t s roots were i n the social movement of the late 1960s. The socio-economic climate i n which CRS operates has changed over time and the needs and ideals of the membership have changed along with i t . The co-operative has grown from six members supported by 63 government grants i n the early 1970s, to an economically independent organization of 54 members and over $13 million per year i n sales i n the early 1990s. CRS i s a dynamic organization, constantly adapting to the needs of i t s members and the needs of i t s businesses, continually balancing the desire for democratic control with the e f f i c i e n t and effective decision-making needed to run successful businesses. In order to adapt to changing needs and a tremendous amount of growth, the democratic decision-making structures of CRS have been transformed a number of times over the years. Regardless of the different structures, however, the co-operative principle of democratic control has always ensured that the needs of the members have remained i n the forefront. 4.1.1 Early Days The roots of CRS date back to Victoria i n 1971 and a "pre-order" food co-op (buying club) called Amor de Cosmos that was based on principles of consumer control and volunteer labour (CRS History 1989, 3) . People i n this group were dedicated to co-op ideals. They believed that fundamental changes to society were possible and they were willing to take risks and to volunteer time and energy to achieve their p o l i t i c a l ideals. From 1971 to 1973 the group received grants from Opportunities for Youth (OFY) and the Local Initiatives Program (LIP) which they used to help start consumer co-ops throughout the province (CRS History 1989, 3) . In 1972 Fed-up Co-operative Wholesale was formed 64 because there were so many new pre-order co-ops that a central depot was needed (CRS History 1989, 3) . By the end of 1973, almost f i f t y collectives, from a l l corners of the province, were ordering from and participating i n running the warehouse (CRS History 1989, 3) . Member co-ops supplied volunteer workers to the Fed-Up warehouse. The federal grants provided money to pay the salaries and expenses .of staff who acted as consultants for the Fed-Up system and the member food co-ops. One of the grants was submitted under the t i t l e "Consumer Resource Service" and the i n i t i a l s "CRS" came to be used to describe the consultant group. The grant money, according to the federal government, was supposed to be used only for the temporary funding of salaries and expenses (CRS History 1989, 4). The CRS workers viewed the salary monies as common property of the "movement" and an important source of capital to seed new projects and make capital expenditures (CRS History 1989, 4) . Their answer to the government restrictions and their capitalization needs was to keep only as much of the salaries as they needed to li v e on and then return the rest to a common pool in the form of a "kickback" (CRS History 1989, 4). The CRS group was becoming more interested i n long-term goals for the movement: "They wanted Fed-Up to be a strong co-operative federation that could handle the ownership and operation of businesses. They wanted a movement that could combine the economic power of member-run co-ops from around the province into a base for change" (CRS History 1989, 5) . CRS received a grant from the Local 65 Employment Assistance Program in 1973 and for the f i r s t time the provision of permanent jobs to members became an important objective for the group (CRS History 1989, 5). Members of the Fed-Up Council were not interested i n creating permanent employment, they were distrustful of major growth, stressed the primacy of volunteerism, and f e l t s a tisfied with the service which Fed-Up provided" (CRS History 1989, 5) . In 1974 the Council directed CRS to establish i t s businesses, including i t s wholesale warehouse, independent of the Fed-Up system (CRS History 1989, 5) . Despite their differences and the fact that they were running separate warehouses, the two groups, CRS and Fed-Up, remained loosely a f f i l i a t e d . A p o l i t i c a l separation of the two groups occurred when the CRS members became interested i n the principle of worker control, something quite different from the Fed-Up system where consumer control was paramount (CRS History 1989, 6) . The CRS group began to develop other industries on their own. In 1974 they had two projects in operation. One project involved a beekeeping operation, the other involved some food processing equipment which had been purchased with money from the common pool set aside from worker's salaries (CRS History 1989, 6) . By the beginning of 1975 CRS had established Queenright Beekeepers and Tunnel Canary Cannery. (CRS History 1989, 6). None of these industries was established without a great deal of struggle, both internal and external. Although at this stage workers were beginning to educate themselves i n the technical aspects of their work, trades were learned mostly through hard experience. Government funding afforded the luxury of being able to make mistakes. . . . (CRS History 1989, 7) 66 Aside from operating as a commercial beekeeper, Queenright was also involved in the construction of beekeeping equipment. Beekeeping parts were produced out of pine m i l l ends for wholesale and r e t a i l markets. Production was very labour intensive and control over.the source of supply for pine m i l l ends was extremely d i f f i c u l t . High costs of production coupled with dwindling government funding and a lack of experience i n running a business of this nature led the group to decide to dissolve Queenright i n 1975 and put their energies into making use of a commercial oven and other bakery equipment which had been donated ea r l i e r i n the group 1s existence. Uprising Breads Bakery was up and running by the beginning of 1976. With LEAP money running out, CRS began to prepare i t s e l f to enter the world of independent business (CRS History 1989, 8) . In 1976, Collective Resource & Services Workers' Co-operative was formally incorporated under the co-operatives act of B r i t i s h Columbia (CRS History 1989, 8) . 4.1.2 Incorporation in 1976 At the end of 1976 CRS was one co-operative with three divisions or enterprises: Tunnel Canary Cannery, Uprising Breads Bakery, and the CRS wholesale warehouse (CRS History 1989, 8) . The focus for the workers at this time was to maintain their job security by ensuring that the businesses continued to be viable and by concentrating on improving their s k i l l s as workers and managers of their own enterprises (CRS History 1989, 8). 67 The wholesale business improved enough i n 1977 for CRS to move from a 1,000 sq. f t . basement to a proper 4,500 sq. f t . warehouse. There were approximately 14 member-workers at this time including bakery, wholesaler, and cannery workers, as well as two bookkeepers. Management of the businesses was done by the whole group during general meetings which were held every Friday afternoon. Issues such as salary levels, major acquisitions, scheduling of work, purchasing, general policy and goals were discussed by the entire membership at these general meetings (CRS History 1989, 10). Co-operative sales doubled i n 1978 and i t became evident that CRS needed a more formal meeting structure that allowed for better preparation, more democratic input and more informed decision-making. Toward the end of 1978 a restructuring committee was established to recommend changes i n the management and decision-making systems. As a result of this committee the decision-making process was changed to a structure of sub-committees where of planning, personnel, finance and co-ordination groups made decisions. General meetings were limited to once a month. By 1979 the wholesaler had outgrown i t s 4,500 sq. f t . warehouse. The bakery was doing well but the cannery was struggling to break even. The workers were beginning to see the co-op as an ongoing vehicle for social change which they wanted to perpetuate. They started long range planning and out of that planning came the decisions to move to a larger warehouse and to close the economically inefficient cannery. 68 The cannery was closed because i t did not f i t the long range plans of the organization. At the time of the move to a larger warehouse the cannery was having d i f f i c u l t y breaking even on what was quickly becoming a highly specialized and expensive product to produce. The cannery's production was highly labour intensive. The f r u i t was canned i n honey syrup rather than sugar, and i n glass rather than tins (CRS History 1989, 9) . The canning business required large cash outlays at the beginning of every season so that enough jars and f r u i t could be purchased to create products that would be available throughout the year. Technical knowledge of the canning equipment and processes was required of a few workers but the majority of those working at the cannery carried out assembly-line type jobs. When the co-op was faced with the choice of investing considerable money in a much larger, more effici e n t and mechanized operation, subsidizing the present one with prof it-making enterprises or withdrawing from the canning business altogether, they chose to withdraw altogether. Balance sheets aside, the bottom line i n the decision to close the cannery came from the workers themselves when the question "Who wants to work there?" was asked at a general meeting and no one raised his or her hand (CRS History 1989, 9). When the move was made to the new 12,000 sq. f t . warehouse CRS took i t s present form: two enterprises, a retail/wholesale bakery and a natural foods wholesaler, plus an accounting team which serves both (CRS History 1989, 9). 69 The sub-committee structure improved planning capacity and financial controls, which i n turn allowed the co-op to begin to anticipate business needs, rather than merely respond to problems. With the new structure control over the co-op's business environment increased and the co-op prospered. The move also marked the beginning of CRS' relationship with CCEC Credit Union as the new, larger, location necessitated CRS' f i r s t borrowing from the credit union system (CRS History 1989, 9) . CCEC Credit Union was founded i n 1976 by a group of people active i n daycare, consumer and housing cooperatives who decided to pool their organization's money and form a financial institution because they were frustrated by the unwillingness of traditional financial institutions to provide needed capital and other financial services (CCEC Pamphlet 1991) . The founding of the credit union was based on a strong commitment to cooperative and democratic principles. The significance of being able to do business with a lik e -minded17 financial institution was very important to the early development of CRS. Although CCEC was not always able to supply a l l of CRS's financial requirements (due to stringent regulatory controls) they understood the structure of CRS and often acted as a guide to the financial world for the co-op. In fact, CCEC was instrumental i n f a c i l i t a t i n g the development of the f i r s t major financing package CRS had with B.C. Central Credit Union. CCEC remains a dominant lending institution for CRS and i s the credit union of choice for the personal business of many of today's CRS workers. 70 4.1.3 A New Decision-Making Structure in 1982 In 1982 the re a l i t i e s of economic recession caught up with CRS (CRS History 1989, 13) . The survival of CRS was threatened as sales declined rapidly, and the need to curb costs, particularly i n the administrative area, became urgent (CRS History 1989, 13) . Consequently, a Structure Evaluation Comrrtittee was struck to develop a proposal for a new, more effective and less costly administrative structure (CRS History 1989, 13). The result of this committee was the creation of a governance structure that included: an elected Board of Directors (consisting of five members accountable to the General Membership) to co-ordinate co-op level a c t i v i t i e s ; a Personnel Committee and an Administrative Collective to do the bookkeeping and accounting for the collectives and to provide the Board with information and analyses regarding collective plans, budgets and performance (CRS History 1989, 13). The food wholesaler and the bakery, although directly accountable to the Board, became more autonomous as a result of the restructuring. They operated as distinct collectives, each responsible for developing yearly plans and coordinating a c t i v i t i e s within the context of the approved plans (CRS History 1989, 13) . "In addition to saving money, this major restructuring of CRS was intended to provide an administrative structure that could react quickly to internal and external pressures. Information flow and accessibility to information was improved" (CRS History 1989, 14) . 71 In 1984 the work of the restructuring committee went a step further when the membership instructed i t to design a new management structure (CRS History 1989, 14) . This issue was a turning point for CRS because some members were concerned that a new management team would create a hierarchy that would be i n contrast to co-operative principles of worker self-management and responsibility (CRS History 1989, 14) . Despite these concerns, however, a proposal to create a general manager, and a manager for each of the two businesses, and for the administrative collective was adopted i n 1984 (CRS History 1989, 14) . Three people l e f t the co-operative over this issue. The late 1980s were a time of tremendous growth for both CRS businesses. The Bakery completed an expansion study i n 1985, and the following year increased i t s r e t a i l space to include 1,500 sq. f t . (CRS History 1989, 9) . There were eleven members at the bakery, eight at the warehouse, four i n the administrative collective and the combined sales for the co-op were $3.0 million. Growth i n the wholesale warehouse was phenomenal. In 1988 the wholesaler chose a new name, Horizon Distributors, and moved to a new 36,000 sq. f t . warehouse. In the f i r s t year at the new warehouse the number of workers almost doubled and sales exceeded $5.5 million. The management structure, originally set out i n 1982, evolved throughout this period of growth. The essential nature was preserved as the structure proved to have the f l e x i b i l i t y to f a c i l i t a t e growth to over 50 members (CRS History 1989, 14) . 72 The question of how salaries were distributed to the members became more of a focal point during this period of continued growth, as business needs and member needs continued to change. The salary structure that was defined i n the late 1970s reflected the society to which the members aspired (CRS History 1989, 15) . Every member received the same "base rate", regardless of the job they were doing, and people with children received an added "dependent supplement" on top of this base rate. When the new management structure came into effect i n 1984 there was pressure to change the salary structure to reflect the fact that there were now people who had responsibilities defined as different from the rest of the membership (CRS History 1989, 15) . In 1986, the membership adopted a "managers' differential" to reflect this difference i n responsibility (CRS History 1989, 15) . At the same time a differen t i a l for seniority was also adopted to reflect the importance the co-operative wanted to place on experience (CRS History 1989, 15). The issue of managers' differentials was linked closely to the concerns about hierarchy and control which had come out of the earlier restructuring debates. Emotionally charged discussions occurred at the personal and the philosophical level. On one side of the controversy were the people who believed i n the f l a t structure, i n the idea that paying one person more than another diminishes the value of lower-paid jobs. On the other side, there were those who f e l t that i t was necessary for CRS to pay closer to the market rate in order to attract and retain the caliber of 73 people needed to operate an organization of CRS' size and complexity. 4.1.4 A New Salary Structure in 1991 An increase to the managers' differ e n t i a l i n 1988 and continued increases i n seniority increments did not alleviate pressure on the salary system and i n 1990 a Salary Structure Committee was struck. The result of the Salary Structure Committee work, amidst great turmoil, was the adoption, i n 1991, of a four level salary structure based on job types. With the new structure jobs were evaluated and assigned to a salary level according to a set of c r i t e r i a adopted by the board of directors (CRS History 1989, 16) . Managers' salaries were determined separately (CRS History 1989, 16) . The salary structure went from a f l a t base rate (with differentials added for workers with dependents, for managers, and for seniority) to a multi-level system based on a set of job-related c r i t e r i a . This issue marked another turning point i n the co-op's history. Again, some members resigned over this decision. By 1991, the wholesale operation, Horizon Distributors, had once again outgrown i t s warehouse space. Sales jumped considerably and space almost doubled when the business moved to a new 55,000 sq. f t . f a c i l i t y . In 1989 CRS had 37 members and sales of $6.3 million. By 1993 the co-op had grown to 54 members with the combined sales of Uprising and Horizon reaching $13.2 million. 74 In 1994 growth continues to pressure the salary and decision-making structures of the co-op. CRS i s constantly evolving, continually trying to balance the needs of the businesses with the needs of the members. In order for the businesses to be competitive i n their respective markets, they need quality personnel and efficient, effective, dec i s ion-making processes. In order for members to be "served" they need an acceptable salary and a meaningful level of democratic control. In the past CRS has looked to developing goals and statements of purpose to guide their decisions. In the mid 1980s the following "Statement of Purpose" was adopted and remains i n place today: To provide i t s members with secure, well-paying jobs, within a personally empowering structure; to operate i n accordance with the principles of worker ownership and self-management ; to be a model of a democratic alternative to the capi t a l i s t system; to operate businesses in an environmentally and socially responsible manner, producing goods and services that make a positive contribution to society; to have a work environment that supports the development of non-oppressive attitudes and behaviour; and to support groups who, like CRS, are contributing to the creation of a society where personal, economic and social relationships are based on co-operation and equality. If CRS i s to continue balancing the needs of the members, the needs of the businesses and the needs of the co-operative i t w i l l have to review i t s statement of purpose, and begin the long term planning process of developing new goals for new directions. 75 4.1.5 Lessons for CED There i s an enormous amount of information and experience wrapped up i n the history of CRS. The organization has many lessons to offer other workers' co-operatives and potential CED i n i t i a t i v e s . The high degree of commitment from the founders was c r i t i c a l to the early success of the organization (CRS History 1989, 16) . Without clear goals and the payroll "kickbacks" as a base, CRS would have had d i f f i c u l t y surviving the early days of experimentation. A strong ideological base with a clear fundamental goal of providing employment i n an empowering structure has been an important guiding feature throughout CRS' development. The early financial support from the various government grants allowed members to learn by doing, to make mistakes, to make changes and then to move on. Development at CRS has been an ever-changing process showing that i n order to be successful the structures of an organization must reflect the needs and the goals of the members. An organization must be willing to reassess goals and make changes as business changes, as people change and as the world changes. The importance of good management and technical s k i l l s , although not stated directly i n the earlier history description, has been a c r i t i c a l element i n the development of CRS. Growth at CRS did not just occur. The natural food market did not magically open up overnight and the bakery was not simply "in the right place at the right time." People, with s k i l l s and imagination, 76 d e v e l o p e d the n a t u r a l foods market and c r e a t e d e x c e l l e n t p r o d u c t s a t t h e b a k e r y . People w i t h a b i l i t i e s i n a c c o u n t i n g , p l a n n i n g , f o r e c a s t i n g , b u d g e t i n g , m a r k e t i n g , customer r e l a t i o n s , and computer systems b u i l t CRS. These a r e not n e c e s s a r i l y s k i l l s t h a t p e o p l e b r o u g h t w i t h them but r a t h e r a b i l i t i e s t h a t t h e y were a b l e t o c u l t i v a t e as the o r g a n i z a t i o n d e v e l o p e d . Perhaps the most u s e f u l l e s s o n the development o f CRS has t o o f f e r , i s s i m p l y t h a t : i t i s p o s s i b l e t o c r e a t e s u c c e s s f u l b u s i n e s s e s where i n d i v i d u a l s have d e m o c r a t i c c o n t r o l o v e r t h e i r w o r k p l a c e and t h e i r own economic f a t e . 4.2 NATURE OF OWNERSHIP CRS has come a l o n g way i n 20 y e a r s . I t s t a r t e d as a s m a l l group o f p e o p l e w i t h g e n e r a l i z e d s k i l l s and j o b s , o p e r a t i n g w i t h i n a f l a t s a l a r y s t r u c t u r e where l i n e s o f a u t h o r i t y were q u i t e g e n e r a l and d e c i s i o n - m a k i n g t ended t o f o l l o w a consensus s t y l e . CRS i s now a l a r g e group o f p e o p l e w i t h s p e c i f i c s k i l l s and j o b s . T h e r e a r e f o u r l e v e l s i n the s a l a r y s t r u c t u r e , l i n e s o f a u t h o r i t y a r e more h i e r a r c h i c a l and the d e c i s i o n - m a k i n g s t y l e t ends towards " m a j o r i t y r u l e s " . D e s p i t e these changes which , t o some, seem l i k e t h e d i f f e r e n c e between n i g h t and day, c o - o p e r a t i v e p r i n c i p l e s have a lways been embodied i n the s t r u c t u r e o f CRS. P r i n c i p l e s may have been i n t e r p r e t e d d i f f e r e n t l y a t d i f f e r e n t t i m e s b u t t h e i m p o r t a n t p o i n t i s t h a t the o r g a n i z a t i o n i s s t i l l owned and r u n b y i t s members. 77 At CRS every member i s an owner because upon being approved for membership a worker must purchase $4000 i n shares. CRS, like a l l co-operatives, operates on the principle of one member/one-vote, which i s different from investor-owned firms that operate under the principle of number of shares/number of votes. This difference i n principle has significant implications for decision-making and control. From a business perspective, Horizon Distributors and Uprising Breads Bakery are no different from any other business i n their respective industries. Income from operations must exceed expenses in order for them to profit and they must profit to ensure the long term v i a b i l i t y of the businesses. In traditional businesses surplus i s distributed to investors or owners. The same i s true i n the case of CRS where surplus earnings are distributed to the worker-owners i n the form of bonuses. The significant contrasts between the two types of organizations come from the role profits play, the way the businesses are controlled, and the way i n which surplus i s distributed. 4.2.1 Role of Profits The purpose of CRS i s to "provide good quality jobs to as many people as possible in an empowering way" (Worker Co-op 1994, 3). If the businesses are not successful, jobs cannot be provided and the purpose of the co-op i s not met. Ketilson suggests that the role of profit i n the different 78 organizations may lead to different types of decisions and i n the case of co-ops those decisions w i l l tend to favour the needs of the members rather than the needs of capital: The nature of the ownership of economic a c t i v i t y within a community matters. Investor-owned businesses, for instance, w i l l be much more l i k e l y to let financial considerations take p r i o r i t y when making decisions about investment or whether to remain i n the community. Community-based organizations such as co-ops are l i k e l y to place less weight on the p r o f i t a b i l i t y of the organization, and more on the economic well-being of the members comprising the organization. (Ketilson et a l 1992, 35) There are many examples at CRS of decisions where the economic well-being of members has overshadowed the s t r i c t consideration of p r o f i t a b i l i t y . One such example occurred i n the early 1990s, when CRS had a period of substantial losses which seriously threatened the v i a b i l i t y of the co-op. There were a number of contributing factors to the losses but the two main concerns at the time were, one, to stop the losses and, two, to stabilize the businesses. The approach the co-op took was to have the board of directors, the general manager and the managers of the three collectives s i t down and work out a plan for controlling the situation. With payroll as the co-operative's largest expense, the quickest and simplest answer, from a business perspective, would have been to limit losses by laying people off and cutting payroll. When the group met, however, they were able to come up with a two-part package of recommendations which did not involve any job losses. A certain level of financial losses was accepted at the outset and then with employment as a priority, the group was able to put together a creative "emergency measures" package which would 79 a l l o w the c o - o p t o c o n t i n u e t o meet i t s f i n a n c i a l o b l i g a t i o n s t o c r e d i t u n i o n s and s u p p l i e r s . The emergency measures i n v o l v e d budget c u t s i n o p e r a t i o n s and r e q u i r e d members t o make c o l l e c t i v e s a c r i f i c e s i n t h e way o f i n c r e a s e d work h o u r s , r e d u c e d v a c a t i o n p a y and i n c r e a s e d s h a r e c a p i t a l r e q u i r e m e n t s . The second p a r t o f t h e package i n c l u d e d a l e n g t h y s e t o f recommendations and g o a l s which would s e t t h e c o u r s e f o r b e t t e r management i n the f u t u r e . The k e y f e a t u r e s a r e : 1. The i n t e r e s t s o f the membership, namely employment, were t h e f o c a l p o i n t o f d i s c u s s i o n s . 2. Workers , i n the form o f e l e c t e d b o a r d members, h a d a s i g n i f i c a n t r o l e i n c r e a t i n g the recommendations and p r o v i d i n g d i r e c t i o n t o the managers. 3 . I n f o r m a t i o n was open and a c c e s s i b l e t o a l l members. W r i t t e n packages were p r o v i d e d f o r e a c h p e r s o n and a v e r b a l p r e s e n t a t i o n was made a t a g e n e r a l mee t ing where members h a d t h e o p p o r t u n i t y t o d i s c u s s prob lems , a sk q u e s t i o n s a n d make f u r t h e r recommendations . 4 . Workers , a t the g e n e r a l mee t ing l e v e l , h a d the f i n a l a p p r o v a l on t h e recommendations and as s u c h had c o n t r o l o v e r t h e i r own economic f u t u r e s . 80 5. The whole process was an invaluable learning experience for a l l those who were involved. In a traditionally structured business the workers would not have been as intimately involved i n the decision-making process, they would not have had access to as much information, and they would not have had as much control over their own economic futures. Also, i n a traditionally structured business, the tradeoffs between financial losses and jobs would probably have worked out differently as the level of losses tolerated by the co-op might not have been acceptable in a conventional business, particularly an inve stor-owned business. The one member/one vote principle not only enhances organizational responsiveness to member needs and concerns, this principle also allows broad participation of members i n the decision-making process. It provides people with both the responsibility and the authority to participate i n the decisions that affect their lives, decisions involving employment and income (Simpson 1991, 136). 4.2.2 Democratic Control In traditional structures control of the business i s based on the amount of money invested, usually one vote per share purchased. The more shares owned, the greater the control. In a workers co-operative, like CRS, control i s distributed democratically among members through the one member/one vote principle. 81 At CRS, members have control over their everyday work environments through workgroup meetings. They have input into planning through collective level meetings. Members participate i n evaluation and hiring committees as well as other important ad hoc committees such as the Restructuring Committees of the 1980s. They have the opportunity to be involved i n policy formation and the overall guidance of the co-op through the elected board of directors. Members also have control over the organization through General Meetings where the general membership has f i n a l approval on large capital expenditures and important policies including salary structure and bonus distribution. The structures for democratic control certainly exist at CRS but i t must be remembered that co-operative principles are very flexible and i t takes more than just the statement "one member/one vote" to ensure that "meaningful participation i n the economic and social policy of the co-op" i s actually achieved (Task Force 1984, 39) . In fact, as the previous CRS history section revealed, finding the appropriate vehicle for democratic participation i n a workers' co-operative i s often an ongoing struggle. 4.2.3 The Distribution of Surplus The egalitarian appeal of the co-operative model i s revealed not only i n the principle of democratic control, but also i n the principle that surplus earnings belong to members, to be distributed i n such a way as to ensure that one member can not gain at the expense of another. 82 Surplus earnings i n traditional businesses are distributed on the basis of capital investment, according to the number of shares owned. At CRS, as i n other workers' co-operatives, surplus earnings belong to the members and are distributed i n proportion to the number of hours worked (not including overtime) . The important feature of this principle i s that, according to supporters of the co-op model, the distribution of surplus based on work i s a much more equitable way to distribute the f r u i t s of labour than one which i s based on capital investment. 4.3 CRS' CONTRTOUTIONS TO CED 4.3.1 Economic Benefits CRS i s a source of stable and lasting employment. In an economy which, at times, can be very unstable, the employment security offered by CRS i s of paramount importance to members. If the co-operative were located i n a smaller center this degree of security would also be an important source of s t a b i l i t y for the community i n general: When the workers control the enterprise, they are able to implement policies which place employment security before other considerations (i.e., short term pr o f i t s ) . Job protection helps maintain stable communities while contributing to the broader economic benefits associated with retaining buying power i n the community (CWCF Pamphlet 1993). CRS i s no different from other businesses i n that i t generates wages to be spent i n the economy, purchases supplies and services from local businesses, and pays i t s share of taxes. The figures 83 associated with these acti v i t i e s are a drop i n the bucket compared to the 800,000 job economy of Metro Vancouver but CRS contributes nonetheless; Again, the impact of CRS on such a large economy may not be significant but worker ownership does mean local ownership and to a certain extent this ensures that earnings remain i n the provincial economy rather than being siphoned off to another part of the country or the world. The structure at CRS, and i n most worker co-operatives, i s conducive to better labour/management relations and higher productivity. Workers, co-ordinators and managers make plans together. The tension and distrust inherent i n traditionally run businesses i s minimized by a structure which ensures that the views/needs of the membership are included i n the decision-making process. CRS workers gather knowledge of the businesses through their participation i n workgroup, collective and general meetings. By understanding how the businesses operate members are better able to look for ways to improve productivity. The benefits of increased productivity are not guaranteed but being an owner and working alongside your fellow owners tends to provide enough incentive to ensure that improvements do get made and that certain standards are met. The economic benefits of CRS occasionally extend dire c t l y to community-oriented groups and organizations. CRS has a policy which c a l l s for a certain percentage of earnings to be allocated to 84 a "Corrirtunities Fund". Over the years this fund has provided financial support to wide variety of groups and organizations ranging from the Strathcona Gardens Composting Project, Kiwassa Neighbourhood House, and the Lil'Wat Peoples Defense Fund to MATCH International, the Philipine Womens' Centre, and an agricultural co-operative i n Nicaragua. Many other organizations have been the recipients of smaller food donations distributed throughout the years. 4.3.2 Educational Benefits CRS endorses the co-op principle of education. The importance of member development and the co-op's commitment to the ongoing education of members i s reflected i n CRS' yearly budget which contains l i b e r a l allowances for training and education. Members can take job-related courses i n areas such as baking, computer training, marketing, accounting, and f i r s t aid or more general courses on subjects such as conflict resolution and unlearning racism. The structure of CRS allows for informal education to happen on a much larger scale than the formal education. Members gain valuable economic experience through participation i n business planning and dec i s ion-making. They become familiar with the financial aspects of business through reports and presentations at collective and general meetings. Members have the opportunity for development through participation i n committees ranging from hiring and evaluations to safety and new products. The Board of Directors 85 which i s open to a l l , except managers, offers members an exceptional opportunity to gather experience and knowledge i n creating policy, debating d i f f i c u l t p o l i t i c a l issues, analyzing financial information, and planning for a l l aspects of the businesses and the co-op. Despite the formal training courses and the informal learning opportunities inherent in the structure of CRS one of the most interesting sources of education comes from the workers themselves. A rich diversity of individuals has been drawn to the organization over the years. The exchange of ideas and perspectives among the workers, whether i t occurs i n the boardroom or i n the lunchroom, can often be the source of some of the most meaningful learning experiences available at CRS. 4.3.3 Co-operative Cbirmunity CRS takes i t s role i n the co-operative community seriously. Since 1972 the members have worked to increase the pr o f i l e and likelihood of co-operatives i n the community. In earlier years, members were directly involved i n creating consumer co-operatives and publishing information pamphlets. Today, CRS members provide information, advice, board seminars and financial management workshops to other co-operative organizations. CRS contributes financially, i n the form of membership fees, to organizations dedicated to promoting the development of co-operatives and CED initiatives, such as: the Social Planning and Review Council of British Columbia (SCARP) , the Canadian Co-86 operative Association (CCA), and the Canadian Worker Co-operative Federation (OWCF). Representatives from CRS have been very active participants i n the CCA over the years and have taken leadership roles i n the founding the CWCF and in developing a number of CCA i n i t i a t i v e s . Members continue to represent CRS provincially and nationally at co-op meetings and conferences. Recently, a member of CRS was involved i n a network of CED activists which was responsible for organizing a consultation with ministers from the provincial NDP government. 4.3.4 Needs of People The most significant contributions CRS has to offer the CED approach comes from i t s a b i l i t y to meet the needs of the people who work there. Members have control over the workplace and the working conditions. They control their own economic lives. Members have access to the highest level of decision-making and are involved i n the equitable distribution of earnings. In his paper, "Worker Cooperatives and Community Development", Charles Turner offers a wonderful statement on what worker control means to people: Only when workers are able to control the workplace on a democratic basis and share equitably i n the f r u i t s of their labour are they able to perceive their power as creative beings and act with strength and dignity. Without the opportunity to exercise creative power i n the workplace, material incentives become an opiate of the working class, subtly destroying i t s character (Turner 1987, 65). 87 As an owner, work becomes more meaningful. The desire to be as productive as possible while ensuring that the needs of individual workers are taken care of provides for an ef f i c i e n t and enjoyable work environment. The alienating effects of "punching a clock" or meeting a specific dress code do not exist at CRS. There i s a portion of the CRS statement of purpose which reflects the organization's commitment to meeting the needs of a l l members: . . .to have a work environment that supports the development of non-oppressive attitudes and behaviour; and to support groups who, like CRS, are contributing to the creation of a society where personal, economic and social relationships are based on co-operation and equality. These are not just words on a page. There i s a culture born out of mutual respect for diversity i n l i f e s t y l e and opinion that makes CRS a unique workplace. CRS has proven to be an excellent vehicle for the CED approach. The history of the organization holds many lessons for the development of future workers' co-operatives and other CED i n i t i a t i v e s . The democratic nature of ownership at CRS and the egalitarian appeal of the co-operative model, means that human needs and CED concerns for equity, participation, and control are recognized and buil t into the system of decision-making. The a b i l i t y of the CRS to provide significant economic and educational benefits to i t s community and i t s workers proves that i t i s possible to create successful organizations where workers have meaningful control over their own economic fate. 88 5.0 SUMMARY AND CONCLUSIONS Chapter two introduced the concept of CED as an alternative to conventional approaches to economic development. The CED movement in Canada was shown to have emerged i n the late 1970s i n reaction to the " c r i s i s of the welfare state" and the failure of the traditional market system to provide adequate employment. A resurgence i n the movement occurred i n the early 1990s as concerns regarding unemployment, poverty, environmental degradation, globalization, and economic i n s t a b i l i t y continued to plague communities. The belief that problems facing communities need to be addressed i n a h o l i s t i c and participatory way was emphasized as a key feature of the CED approach. This means that, unlike conventional approaches, CED attempts to integrate economic, social, cultural and environmental issues i n a decision-making process that i s accessible to members of a community. Chapter two also explored the broad nature of the CED approach. The general objective of any CED ac t i v i t y was defined as: "to take some measure of control of the local economy back from the market and the state." Three common approaches to CED were examined. Different strategies were found to be useful for different situations depending on what the goals of the i n i t i a t i v e were and how the concepts of community and economy were perceived. I believe that the potential for CED exists i n the structural change and communalization approaches outlined i n the second 89 section of chapter two. These approaches involve a wide array of strategies that would be suitable i n any number of communities. They are concerned with the quality of the economy, with issues of long-term stability, sustainability, equitable distribution of wealth, f a i r access to decision-making processes, and quality of l i f e . The communalization approach, i n particular, i s concerned with developing an economy i n such a way that people feel connected on a social/emotional level and are concerned with each other's well-being. These approaches do not have a l l the answers. In fact, there are formidable barriers to the evolution of CED, not the least of which i s the fact that CED approaches are out of step with the mainstream and tend to be i n need of organizational and financial resources. The strength of CED, however, i s that i t asks questions such as: how can a country as wealthy as Canada f a i l to meet the basic human needs of so many individuals? The purpose of CED i s not to solve a l l the problems of the welfare state or to overthrow the capitalist economy i n Canada. CED i s about making small changes i n important places. With the right support, education, and research, CED may be able to provide a better way of meeting people's needs and alleviating problems of unemployment, poverty and economic ins t a b i l i t y . The co-operative model was introduced i n chapter three as a strategy that could be used to achieve CED goals. The long and diverse history of co-operative development i n Canada was traced 90 back to the 1850s in England and the Rochdale Society of Equitable Pioneers who launched the f i r s t successful consumer co-operative. A historical review of the co-operative movement revealed that the original Rochdale aims and rules were reformulated and reinterpreted over time u n t i l they gained the status of "co-operative principles" . These principles were shown to have guided the development of co-operative institutions and enterprises throughout the world. In Canada, the co-operative movement was characterized as following the "liberal democratic" tradition, a pragmatic approach that i s able to compete successfully with capitalism by appealing to a person's self-interest rather than s t r i c t l y to her idealism. Historically, idealism has always played a part i n Canada's co-operative movement but the strength of this practical approach was reflected i n the regional patterns of development where co-operative institutions were established mainly to meet the needs of people, regardless of their philosophical opinions of capitalism. There were marketing co-operatives and wheat pools on the Prairie, consumer co-operatives i n the c i t i e s , caisses populaires i n Quebec, and community development co-operatives i n Atlantic Canada. The organizational f l e x i b i l i t y of co-operative principles was emphasized i n chapter three as the cornerstone of co-operative development. Co-operation was shown to have found institutional expression i n everything from banking to Utopian communities. The fact that the co-operative form of business has achieved success not so much driven by profit as by the desire to bring 91 fairness, equity and justice to the marketplace was highlighted as a significant feature of the co-operative model. An overview of the types of co-operatives functioning i n Canada was provided i n chapter three. The amount of community and economic acti v i t y being conducted through co-operative institutions was used to ill u s t r a t e the strength and diversity of the co-operative sector and the role co-operatives play i n Canadian economic and social l i f e . The f i n a l part of chapter three explored the potential of the co-operative model to contribute to CED goals. The hi s t o r i c a l development of the two movements revealed similarities i n the motives and ideals that indicated that co-operatives would be well-suited to CED. Emphasis was placed on the benefits CED i n i t i a t i v e s could realize from the technical and p o l i t i c a l experiences of the co-operative movement. The role of the co-operative sector as an economic force i n the Canadian economy provided strong reinforcement for the potential of the co-operative model to make significant contributions to CED. It was emphasized that many CED concerns could be alleviated by co-operative structures that provide communities with the a b i l i t y for local control, the opportunity to create stable development, and with practical responses to market deficiencies and the impacts of globalization. The role of co-operatives as a social force i n the Canadian economy was revealed i n chapter three. The nature of co-operatives, with their dedication to serving member needs and their 9 2 commitment to the democratic involvement of members, was recognized as an important feature for achieving CED goals regarding the equitable distribution of wealth and f a i r access to decision-making . Chapter three showed that co-operatives, i n general, have great potential as vehicles for f u l f i l l i n g the aspirations of CED i n i t i a t i v e s . It was noted that not a l l co-operatives have the same attributes to offer CED. Worker co-operatives, i n particular, were identified as having the type of structure that holds the most promise for meeting people's needs and alleviating problems of unemployment, poverty and economic inst a b i l i t y . Chapter four brought theory and r e a l i t y together as the contributions of the worker co-operative structure were explored using a well-established organization as a model. A review of the history of CRS Workers' Co-operative had lessons to reveal for the CED movement. A high degree of commitment by founding members, clear goals, good management and technical s k i l l s , early financial support from the government, and an atmosphere which encouraged "learning by doing" were a l l cited as important factors i n the success, especially during the early years, of the organization. Chapter four demonstrated that the nature of ownership at CRS, guided by principles of democratic control and equitable distribution of surplus, provides the foundation for members to control their own economic lives. CRS showed that i t i s possible to recognize concerns for fairness and equity, and emphasize human 93 needs, within an economic decision-making structure and s t i l l compete successfully in a profit-driven capitalist economy. The potential of the worker co-operative structure was exhibited i n the economic and educational benefits produced by CRS. CRS was shown to be a place of stable and lasting employment where people have the opportunity to have meaningful control over their workplace and working conditions. The educational experience available to members of CRS was shown to extend past the formal technical training of courses. The opportunity for members to gather knowledge was also shown to be available through democratic structures that rely on the exchange of ideas and perspectives from a r i c h diversity of participants. Throughout the co-op1s history CRS has struggled to maintain a balance between making efficient and effective business decisions while at the same time maintaining a level of democratic control which i s empowering to each member on a personal level. Juggling the needs of the businesses with the needs of the members and the needs of the co-op i s a constant battle at CRS and one which any CED organization must be prepared to face. The socio-economic climate in B r i t i s h Columbia has changed a great deal since CRS f i r s t started. Many of the experiences i n the early development of CRS could not be duplicated today. The early members of CRS had strong ideological beliefs with roots i n the social movement of the late 1960s. Their l i f e s t y l e s reflected their beliefs and they made significant sacrifices to support the development of the co-operative. This i s not to say that 94 dedication to beliefs i s not possible i n the 1990s, i t i s just that times are different. Government funding, UIC i n particular, i s much more scare and what funds are available tend to be more tightly administered than when CRS was applying for grants. The experiences of CRS may not be easily duplicated i n today's socio-economic climate but the lessons remain valid. In order for new co-operatives and CED projects to be developed with a reasonable success rate they w i l l need a high degree of commitment over a long period of time. They w i l l need sk i l l e d management, clear goals and steady financial support, particularly during the early stages of development. The challenge i s i n securing financial support and finding or developing people who are interested i n alternative economic structures. Co-operatives and community development w i l l not spontaneously emerge. In order for worker co-operatives and other CED i n i t i a t i v e s to be developed with a reasonable success rate they must be fostered and supported: While the view of co-operatives and community development as economic enterprises responding to economic changes and opportunities i s important, this i s only half of the equation. The other part i s that co-operatives and community development projects involve associations of people who have to be supported and educated i n order for the development ini t i a t i v e s to be successful (Ketilson et al 1992, 4). The role of "fostering and supporting" the development of worker co-operatives and CED projects belongs to two main players: the established co-operatives and the government. Co-operative development w i l l require considerable collaboration between provincial and federal levels of government 95 and the co-operative sector but the ultimate responsibility for new co-operative development i s with the established co-operative organizations. In this context the term "established co-operatives" i s meant to apply mainly to national co-operative organizations such as the Canadian Co-operative /Association (CCA) and the Canadian Worker Co-operative Federation (CWCF), but where appropriate, i t may also include some of the larger, more well-established co-operative institutions. You cannot expect to develop alternative business and economic structures i f people do not understand the basic principles of CED or co-operatives. Established co-operatives must be the driving force i n generating awareness i n government and i n the general public about co-operatives. They must also be the driving force i n organizing the co-operative movement i n Canada. Established co-operatives must be prepared to support the development of the co-operative model, lobby governments, and provide education i n the ways of co-operation. In order for the co-operative sector to become more f u l l y developed there must be a basic level of comprehension "out i n the world" regarding the co-operative model. Different groups have different educational needs, ranging from an introduction to the structures and benefits of co-operatives for government o f f i c i a l s and staff, to generating interest for the co-operative model i n the general public, to providing start up educational resources to new co-operatives and CED groups. 96 Established co-operatives must educate the government about the role co-operatives have to play i n community development. They must collaborate with government to help create the types of policies, legislation, and programs that are needed to foster co-operative development. Established co-operatives must be prepared to use their resources, knowledge and technical expertise, to further the development of the co-operative movement. They must work to increase integration within the co-operative movement and to encourage more co-operation among co-operatives. The 1992 Report to the Federal/Provincial Task Force on The Role of Co-operatives and Government i n Community Development had a number of recommendations for the role of established co-operatives. The focus of these recommendations was on the role of established co-operatives to provide education and training, leadership, technical expertise, and funding support to newly developing co-operatives and community development organizations (for a detailed l i s t of these recommendations please see the Appendix) . In 1993 there were also a number of recommendations regarding the role of the co-operative sector i n the economic development of Br i t i s h Columbia put forward i n a Report of the Working Party, The Consultative. Group on the Role of Co-operatives i n Community Economic Development (please see Appendix for detailed l i s t of recommendations) . Similar to the Task Force recommendations the Working Party recommendations focus on the role of co-operatives i n 97 providing education and generating awareness. The Working Party recommendations, however, go a step further because they also emphasize the need for widespread consultation between government and co-operative representatives to ensure that appropriate legislative and taxation changes are made and to encourage the creation of policies and programs which w i l l help foster co-operative development. Both sets of recommendations reflect the need for established co-operatives to take an active role i n developing the CED and co-operative movements i n Canada. The primary areas of a c t i v i t y identified i n these recommendations include: generating awareness, providing education, training and support, investigating legislative and taxation changes, providing input into the development of policies and programs, and investigating funding arrangements. Both sets of recommendations suggest that relations with the government are the key to any of this work. Without the ongoing collaboration and support of the government, the pace and quality of CED and co-operative development w i l l be limited. Provincial and federal levels of government must be open to exploring the po s s i b i l i t i e s of alternative forms of development, they must be willing to collaborate with the co-operative sector and active CED groups, and they must be prepared to make changes i n the way development i s approached. The government must be willing to provide policy support to co-operatives i n general and workers' co-operatives i n particular. They must also be willing to include the co-operative sector and 98 CED groups i n consultations concerning new policies (i.e., policies regarding economic development, social welfare, or education). The government must provide legislative support to co-operatives. This includes making changes to regulatory and taxation legislation that would provide incentives and remove barriers to co-operative development and ensure that co-operatives enjoy the same treatment as traditionally structured businesses. For example, the Employee Investment Act (EIA) , which governs the Employee Share Ownership Program (ESOP) and the Working Opportunity Fund (WOF) , prevents participation by co-operatives. The Small Business Venture Capital Act (SBVCA) , which governs the Equity Capital Program, also precludes the participation of co-operatives. This means that tax credit incentives to encourage equity investments are not available to co-operatives. Lack of financing i s often a problem for co-operatives and not having access to government incentive programs i s a significant barrier to co-operative development. The government can nurture the development of CED and co-operative enterprises by committing adequate resources to provide information and to support training for these new types of in i t i a t i v e s . The government must be willing to provide the kind of financial support that w i l l foster CED and co-operative development. Few governments are i n the position to commit large amounts of new resources to new in i t i a t i v e s but by restructuring 99 existing development programs and policies i t i s possible that adequate financial support could be made available. There needs to be support for the creation of development agencies/resource groups to help promote and distribute information on co-operatives and CED enterprises. These resource groups could also i n i t i a t e p i l o t projects and support the start up of new i n i t i a t i v e s . Education i s the key to the development of alternative approaches. CED i s based on a very democratic, participatory approach to decision-making that requires that everyone involved have a certain level of knowledge and s k i l l not only as far as the operation i s concerned but also in terms of working with others i n a democratically run organization. This means that interpersonal s k i l l s must be developed right along with technical business s k i l l s such as planning and budgeting. There needs to be considerable investment i n developing education and training programs that suit the unique needs of CED and co-operatives. Overwhelmingly, the most serious problems to arise i n any CED project stem from either management d i f f i c u l t i e s or a lack of financial resources (Wismer and Pell 1983, 74) . There needs to be support for research into what can be learned about the funding arrangements and management structures of successful ventures. Access to financial resources i s a continuous problem (Clague 1985b, 4, Shera 1986, 126) . There i s a need for financial resources during the start up phase and in the day-to-day operation of any organization. Established co-operatives and CED groups must 100 work to develop existing community funds (i.e. credit unions, union pension funds, church investment, community venture accounts) but there i s s t i l l a large role for government to play i n providing financial support to new in i t i a t i v e s i n the form of loan guarantees, interest subsidies, start up grants, and venture capital funds. The 1992 Report to the Federal/Provincial Task Force on The Role of Co-operatives and Government i n Community Development outlined recommendations for the role of government i n Community Development (please see Appendix for detailed summary of these recommendations) . To understand the complete rationale behind these recommendations, one would obviously need to consider them i n the context of the Federal Task Force Report i n which they were written but for the purposes of this summary i t i s enough to suggest that government must be seen as a f a c i l i t a t o r and supporter of co-operative development through the provision of business and organizational assistance, through appropriate legislation, and through educating and training i t s own personnel about co-operatives (Ketilson et a l 1992, 5). The Federal Task Force recommendations on the role of established co-operatives and the role of government i n creating a climate for co-operative community development were written by a research group from the Centre for the Study of Co-operatives i n Saskatoon. This research group was commissioned by the federal and provincial ministers responsible for co-operatives. The Provincial Report recommendations on the role of co-operatives i n community 101 economic development were written by a committee of individuals including government o f f i c i a l s , representatives of co-operatives, credit unions, Community Economic Development organizations and trade unions. As efforts that involved extensive collaboration with two levels of government and considerable input from the leaders of the CED and co-operative movements, the recommendations contained i n these two reports represent the best available opinions on the future direction for the development of co-operatives and community economic development i n Canada. If even a portion of these recommendations are realized, many Canadians w i l l have the opportunity to improve the quality of their lives through interesting new perspectives and new economic structures. Planners have a role to play i n bringing some of these new perspectives and new structures to fruition but to help make changes happen planners must be open to alternative forms of development. They must be willing to educate themselves about the CED approach and they must be familiar with the co-operative model and a l l the strategies CED has to offer. Planners must work towards educating local community o f f i c i a l s about CED options. They must be willing to collaborate with CED groups and the co-operative sector in f a c i l i t a t i n g discussion and education of the co-operative model and the CED approach i n the community. Planners must be prepared to experiment with these different approaches i n their work. The planner must be able to understand 102 the relationship between the economic and the social development of a community and to identify tradeoffs that have to be made by communities engaged in CED (Boothroyd 1991, 1). The role of the planner w i l l vary according to community goals but i n general the planner needs to have a broad perspective, must be willing to make planning processes more participatory and must be able to provide information and guidance to the community on the use of a variety of CED structures. The purpose of this thesis i s to generate awareness about the potential of CED and the co-operative model as alternative approaches to alleviate some of Canada's current social and economic d i f f i c u l t i e s . At the very least, CED has proven to be useful i n encouraging communities and individuals to consider more than just the growth aspect of development. By opening up the perspective on concepts of economy, community, and development, CED causes people to consider a variety of goals, p r i o r i t i e s , and tradeoffs when making decisions. There are co-operatives and CED i n i t i a t i v e s operating i n the nooks and crannies of communities across the country. CED offers a promising approach to many of Canada's social and economic problems; for this reason i t deserves to be developed further. By exploring the general concepts of CED and co-operation this thesis lays the groundwork for research that can focus more on the details of how various CED institutions can be created, organized and sustained over time. There i s much to be learned from cases like CRS and the many other co-operatives and CED ac t i v i t i e s currently operating i n 103 Canada. Aside from the many spontaneous i n i t i a t i v e s , there are also provincially supported worker co-operative development programs i n Quebec and Manitoba (Webb 1987, 84) . B r i t i s h Columbia could benefit substantially from studying the funding models, the successes, and the failures of these programs. In order for the CED and Co-operative movements to continue to develop, weaknesses must be limited and strengths must be b u i l t upon. This can only happen i f experiences are documented and studied. The arena for further research on CED and co-operatives i s wide open. 104 APPENDIX A. ROLE OF ESTABLISHED CO-OPERATIVES (1992 Report to the Federal/Provincial Task Force on The Role of Co-operatives and Government i n Community Development) 1.0 It i s recommended that co-ops educate their members, elected o f f i c i a l s and staff, and the general community regarding the importance of community development i n i t i a t i v e s to the long-term v i a b i l i t y of the community, and hence, the long-term v i a b i l i t y of the co-ops. 2.0 It i s recommended that co-ops become actively involved i n providing the infrastructure required for community development. This includes: 2 .1 Providing resources to allow communities to conceptualize the problems they face and solutions that can be attempted. 2.2 Providing education and training regarding co-op and community development organizations; and 2.3 Providing technical expertise for such a c t i v i t i e s as project f e a s i b i l i t y assessment, the design of co-op specific financial management systems, and exploring innovative funding mechanisms. 3.0 It i s recommended that the established co-operatives provide leadership i n providing recognition and support to community development i n i t i a t i v e s . This would include: 3.1 Publicly recognizing the importance of an i n i t i a t i v e to a community, and lobbying on i t s behalf; and 3.2 Lobbying government on behalf of an i n i t i a t i v e to assist the project i n dealing with regulators. 4.0 It i s recommended that co-operatives and credit unions take a lead role i n providing loans, investments, and loan guarantees for co-op community development a c t i v i t i e s . 5.0 It i s recommended that examples of funding models such as those provided in the case studies be further supported, studied, and evaluated by co-operatives and credit unions for their general application to co-operative models of community development. 105 6.0 It i s recommended that issues relevant to the f u l l e r participation of women, aboriginal people, v i s i b l e minorities and the disabled i n co-ops be discussed, reported and given p r i o r i t y by co-ops and credit unions. B. ROLE OF ESTABLISHED CO-OPERATIVES (1993 the Report of the Working Party, The Consultative Group on the Role of Co-operatives i n Community Economic Development) 1.0 Recommended that efforts be continued to ensure that existing legislation treats co-operatives f a i r l y . 2.0 Recommended that the co-operative sector i n B r i t i s h Columbia and B.C. government o f f i c i a l s , i n consultation with the Co-operatives Secretariat of the Federal Government, develop an appropriate strategy for the collection of more complete st a t i s t i c s on the B.C. co-operative movement. 3.0 Recommended that the co-operative sector and Provincial Government joi n t l y develop an awareness campaign aimed to promote the sector's development. 4.0 Recommended that a Working Party be appointed to consider how access to training for managers for new co-operatives and community development enterprises might be improved. 5.0 Recommended that representatives from the Ministry of Education be identified to meet with representatives of the co-operative sector to: 5.1 Review the existing curriculum to evaluate i t s treatment of the co-operative sector. 5.2 Identify ways i n which unfair or incorrect references to co-operatives can be removed. 5.3 Advise on how information on co-operatives can be included in the curriculum i n the same way that information i s provided on the private sector. 6.0 Recommended that the co-operative sector and the Provincial Government enter into discussions as to how co-operative studies might be encouraged i n post secondary institutions. 7.0 Recommended that co-operative representatives be considered for inclusion on more government commissions, boards of enquiry, and crown corporations. 8.0 Recommended that B.C. co-operatives be consulted and, as appropriate, involved in a l l relevant provincial trade i n i t i a t i v e s . 106 9.0 Recommended that the Brit i s h Columbia Government ensure that co-operatives are treated equally i n a l l the development ac t i v i t i e s i n which i t i s engaged. 10.0 Recommended that representatives from the co-operatives sector and the B.C. Government ascertain the approximate economic value of the roles played by co-operatives i n the province; and that co-operative development expenditures reflect the co-op sector's role i n the economy. 11.0 Recommended that the Br i t i s h Columbia Government consider extending taxation benefits to members investing i n their co-operatives . 12.0 Recommended that the Government of Br i t i s h Columbia work closely with the worker co-operative sector to encourage the further development of that sector. 13.0 Recommended that the B.C. Government, along with representatives of the First Peoples, appropriate representation from the federal departments concerned, and representatives from the B.C. co-op sector, investigate ways in which First Peoples i n the province might become better informed about co-operatives. 14.0 Recommended that the Government of Br i t i s h Columbia designate a Minister i n a major Ministry responsible for relations with co-operatives; that his or her Ministry allocate resources to foster government relations with co-operatives; and that his or her Ministry allocate resources to foster a better understanding of co-operatives among a l l government ministries. 15.0 Recommended that the Minister responsible for co-operations consider appointing a committee of co-operative leaders to advise him or her on issues of concern and potential of new co-operative programmes. 16.0 Recommended that the Provincial Government identify a working group from the Government Departments concerned with economic development that could work with representatives from the B.C. Region of the Canadian Co-operative Association to investigate ways i n which new co-operatives might be encouraged. 17.0 Recommended that an ongoing Advisory Committee on the role of co-operatives and credit unions i n community economic development be established; that a working party of this Advisory Committee be established to i n i t i a t e action on the recommendations contained i n this report and other recommendations generated by the Advisory Committee. 107 C. ROLE OF GOVERNMENT (1992 Report to the Federal/Provincial Task Force on The Role of Co-operatives and Government i n Community Development) 1.0 It i s recommended that government develop appropriate policy, legislation and programs that are flexible and adaptable to specific project settings, adopting an " i n i t i a t i v e s " focus rather than a "specific programs" focus. 2.0 It i s recommended that the role of government be one of support rather than active development and that this support extend to co-operative i n i t i a t i v e s that w i l l create sustainable development, such as co-operative development agencies not just new co-operative development. 3.0 It i s recommended that government take a leadership role i n recognizing the importance of community development in i t i a t i v e s . 4.0 It i s recommended that community development programs promote intercommunity co-operation, not competition. 5.0 It i s recommended that government develop programs which contribute to the development of s k i l l s within the target communities, rather than providing for the flow of resources and s k i l l s to those outside the community. 6.0 It i s recommended that core funding for community i n i t i a t i v e s be provided for a minimum of five years. 7.0 It i s recommended that provincial loan guarantee programs be used to back up local funds, developed to provide loans for startup and expansion of community development i n i t i a t i v e s . 8.0 It i s recommended that government be willing to accommodate wide variation in the funding models employed and that examples such as those provided i n the case studies be further supported, studied, and evaluated for their general application to other provinces. 9.0 It i s recommended that government provide adequate staff and resource support for training local people to deliver education programming i n their own communities and that this educational programming focus on four areas: education specific to community development; education specific to the operation of business; education specific to co-operatives as an institution; and, education specific to the i n i t i a t i v e . 108 10.0 It i s recommended that government employees attend an orientation program regarding the characteristics of co-operative organizations, most notably, their v i a b i l i t y as an organization with both economic and social objectives. 11.0 It i s recommended that government employees attend an orientation program regarding the characteristics of co-operative models of community development. 12.0 It i s recommended that a process to eradicate the barriers faced by marginalized groups be established through education, legislation, policy and program development. 109 ENDNOTES 1. The " c r i s i s of the welfare state" i s referred to by many authors. Please see; Boothroyd and Davis (1993), Bruyn (1987), Hunsley (1986), Ross (1986), MacLeaod (1986), and Clague (1985) . 2. For views relating CED to concerns about the impacts of "globalization" and the degradation of the natural environment please see; Nozick (1992) , Plant & Plant (1992) , Fairbairn et a l (1991), Dauncey (1988) and Morehouse (1989). 3. The term "communities" i s meant to include geographically defined communities as well as communities of interest. 4. This i s by no means an exhaustive l i s t of a l l the CED a c t i v i t i e s and ideas which were being developed i n the early 1980s but for a sample of some of the things that were happening across Canada please see: Wismer & Pell (1981) , Campfens (1982) , Dorsey and T i c o l l (1982) and Clague (1985a). 5. Please see Nozick (1992), Fairbairn et a l (1991) and Benello (1989) for more information regarding concerns over the impacts of globalization and environmental degradation. 6. The ideas of Fritz Schumacher are referred to by many CED activists and writers. For further reference please see: Schumacher (1973), McRobie (1981), Wismer & Pell (1981), Ross & Usher (1986), Nozick (1990), and Boothroyd & Davis (1993). 7. Please see Wismer & Pell (1983), Newman et a l (1986), Fairbairn et a l (1991) and Boothroyd & Davis (1993) for references regarding the hi s t o r i c a l relationship between the co-operative and the CED movements. 8. Please see Circles of Strength: Community Alternatives to Alienation edited by Helen Forsey (1993) for examples of intentional communities. 9. Please see Boothroyd and Davis (1993) or (Boothroyd (1991) for details on their CED typology. 10. For detailed definitions of community, economy and development please see Boothroyd and Davis (1993) pp 230-231. 11. Please see Boothroyd and Davis (1993) 234 for further references on comanagement, nature conservancies, community land trusts and cooperative housing. 12. See also Clague (1985) , Wismer and Pell (1983) and Newman et a l (1986) for similar explanations of CED principles. 110 13. Please see Brett Fairbairn's paper "Co-Operatives and Globalization: Market-driven Change and the Origins of Co-operatives i n the Nineteenth and Twentieth Centuries" i n Globalization and Relevance of Co-operatives for an extensive description of the effects of the Industrial Revolution on "Cornmunity" i n Britain. 14. The figure of 12 million comes from the 1991 edition of s t a t i s t i c s from the Co-ops Secretariat and includes the combined membership of a l l Consumer Co-ops, Credit Unions, Housing Co-ops, Marketing Co-ops, Service Co-ops, and Worker Co-ops across Canada. 15. (Co-op Working Party Report 1993, 18 and McGillivary. and Ish 1992, 20 but really originally came from the ICA, "Report on Cooperative Principles, p35) 16. Housing and financial co-operatives are also considered "user-based" co-operatives but their contribution to the Canadian economy i s significant enough to warrant separate descriptions i n this section. 17. The following i s a statement of purpose from CCEC which bears many similarities to the statement of purpose at CRS: 1. To promote group solutions to individuals 1 problems through the development and maintenance of co-operatives and self-help groups responding to basic human needs and community needs, and supporting one another. 2. To support and promote responsible action i n the areas of social justice, racial and sexual equality, worker democracy, and conservation. 3. To develop, support, and promote models for economic organization that foster and further community, consumer, and worker control, and membership participation. 4. To provide ourselves with needed financial services at reasonable costs. 5. To educate ourselves and the larger community i n the areas of finance, economics, and p o l i t i c s , towards the end of obtaining a more equal distribution of wealth. 6. To maintain a workplace open to worker participation i n determining responsibilities, accountability for work performed, and the quality of worklife. (CCEC Credit Union Pamphlet 1991) 111 BIBLIOGRAPHY Abbott, Laura, Jonathan Aurthur and Peter Holden, eds. Community Economic Development Strategies: A Manual for Local Action. Chicago: UIC Centre for Urban Economic Development, 1987. Alderson, Lucy, Melanie Conn, Janet Donald, Molly Harrington and Le s l i e Kemp. Counting Ourselves In: A Women's Community Economic Development Handbook. 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