Table of Contents

i Table of Contents

ii Executive Summary

1.0 Introduction

2.0 The Co-op Business Sector

3.0 A New Co-operative Development Strategy

4.0 A Renewed Partnership with the Provincial Government

5.0 Policy & Program Recommendations

6.0 Conclusion

7.0 Resource List

Preamble

This document has been prepared by the Newfoundland-Labrador Federation of Co-operatives for presentation to the Provincial Government requesting support for implementation of a new co-op and micro-business development strategy for rural communities. However it is also intended for distribution to other audiences subsequent to this presentation.

In the interests of brevity we have not included detailed appendices. However additional information is available, relating to many of the issues raised and statements made in this briefing paper. A sample list of documents and related web sites is included. For further information please contact:

Glen FitzpatrickManaging Director

Newfoundland-Labrador Federation of Co-operativesPhone (709) 726-9431

E-mail: gfitz@nlfc.nf.caii

ii Executive Summary

The Newfoundland - Labrador Federation of Co-operatives is proposing implementation of a new strategy to support co-operative and micro-business development in the province. The strategy includes new programs and services to be delivered in partnership with the Department of Innovation Trade and Rural Development, within the context of the new Comprehensive Regional Diversification Strategy. It includes the following components:

- A pro-active public awareness program to promote the benefits of the co-op business model as a mechanism to facilitate socio-economic development and create employment, particularly in rural communities;

- A regional co-operative developer’s network to deliver an expanded level of co-op development support services for interested groups, particularly in rural communities;

- Strategic sector initiatives that will proactively identify opportunities for partnerships with industry organizations to pursue co-op business development projects;

- A micro business development service which will use the co-operative model to provide small loans, and advisory assistance and networking support for very small enterprises in rural communities;

- A renewed focus on youth through expanded participation in the Atlantic Co-op Youth Leadership Program and implementation of new co-op youth initiatives for rural communities;

- Enhanced research and policy development activities to build a stronger provincial knowledge base relating to co-operatives and micro-business development, to facilitate successful strategy implementation.

Development of the Federation’s new strategy is being supported by the Atlantic Canada Opportunities Agency and the National Co-operative Development Initiative. The existing co-op business sector is also making a substantial financial contribution. This means that the need for provincial funding support is minimal. What is needed however is a renewed partnership with the Province which will involve reallocation of some existing resources and adoption of new policy initiatives in support of the following recommendations:

1. That government support initiatives to enhance the role of the province’s co-operative sector in public policy development including a strong emphasis on co-op development within the new Comprehensive Regional Diversification Strategy and NLFC representation on the Provincial Council of the Rural Secretariat.

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2. That INTRD play a greater role in promoting the co-op model by assisting the Federation with development of an effective public awareness programs and enhancing the visibility of co-op enterprise in it’s “Getting the Message Out” program, Small Business Week promotions, speeches, media releases and other communications.

3. That INTRD partner with the Federation on implementation of a joint program to enhance co-op development in rural communities, including allocation of staff resources as part of a new regional co-op developer’s network.

4. That government allocate additional resources to the office of the Registrar of Co-operatives to address co-operative legislation issues and establish a review committee, in partnership with the Federation, to make recommendations in this regard.

5. That INTRD undertake a review of potential opportunities for the co-op model to play a greater role in development of key rural industry sectors and work with the Federation to identify and implement appropriate research initiatives and pilot projects.

6. That the Department of Natural Resources consider creating an “agri-foods co-op specialist” position and possible establishment of a ministerial advisory committee to provide advice on the future role of co-operatives in development of the agri-foods industry.

7. That INTRD develop a policy statement promoting micro-enterprise as an important contributor to economic development in rural communities and support the implementation of a new micro-business development program, in partnership with the Federation and other regional development agencies.

8. That the Department of Human Resources and Employment appoint a staff person to liaise with the Federation regarding co-op youth initiatives and assist in identifying potential opportunities for future partnerships.

Implementation of the recommendations contained in this paper will constitute a major step forward in the Federation’s efforts to successfully implement this new strategy. A new partnership with the province through the Comprehensive Regional Diversification Strategy will enhance the credibility of co-ops and micro-enterprise as viable business development alternatives for rural communities. It will also ensure that those involved in establishing such enterprises receive the level of support services required to maximize their chances for success. This will result in the formation of new self-sustaining enterprises that will contribute to employment creation and community prosperity in Newfoundland and Labrador.

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1.0 Introduction

The Newfoundland-Labrador Federation of Co-operatives (Federation) has been in existence for over 55 years as an umbrella organization serving the needs of member co-operatives in the province. It has also played a leading role in supporting development of our rural communities through delivery of co-operative and micro-business development programs and services. The Federation currently serves over 60 co-operative businesses spanning a variety of industry sectors including retail, fisheries, agriculture and the cultural sector. We also apply the co-op business model to other economic and community development initiatives including programs for youth.

Apart from its longevity, the Federation has experienced considerable success in supporting community economic and social development, particularly in rural Newfoundland and Labrador. We have helped many individuals and organizations seeking information and advisory support relating to the development of co-op enterprises. We have supported the participation of young people in co-op youth initiatives at the provincial, regional and national levels. We have also assisted over 500 micro-business operators, by providing access to small loans, training and business advice through delivery of our former Micro-Business Development Service.

The reasons for this success are twofold. First, we have learned that development agencies such as ours must be ready to adapt to the ebbs and flows of our economic and social environment. We must be innovative and flexible in responding to the diverse needs and priorities of people and organizations engaged in the community development process. The Federation’s history is one of ongoing adaptation and tailoring of its programs and services to meet the needs of our members, clients and partners.

Second, we understand that the availability of government financial assistance to organizations, like ours, for community economic development activities, has diminished greatly over the past number of years. Consequently, all development organizations must adopt more innovative and less costly approaches to deliver and maintain programs and services. The many partnerships we have established with other development organizations to maximize cost-effective program delivery demonstrates our knowledge and experience in this regard.

Recent changes in the province’s community economic development environment and new opportunities for co-op and micro-business development have again set the stage for us to undertake development of new programs and services to meet the needs of our clients. These changes include the following:

Human Resources and Skills Development Canada (HRSD) has not renewed funding for our Micro-Business Development Service and the program ended in March 2004. The Federation is now looking for new alternatives to re-establish this highly successful program.

In 2004 the Atlantic Canada Opportunities Agency (ACOA) entered into a partnership with the Federation to implement a regional co-operative development network to expand availability of information and support services in rural communities across the province. We are now seeking to establish new partnerships to accomplish this objective.

The Province’s new Comprehensive Regional Diversification Strategy has provided an opportunity for consideration of new policies, programs and partnerships to increase support for co-operative and micro-business development in the province. We have developed a new service delivery strategy as a starting point to respond to this opportunity.

The Federation’s co-operative and micro-business development strategy will provide new and expanded services to support development of our rural communities. However, implementation will require a stronger and more pro-active partnership with the province for success to be achieved. This paper outlines the details of our new strategy and provides a number of recommendations for government’s consideration, in supporting this initiative.

2.0 The Co-op Business Sector

There are over sixty-five co-operatives incorporated in this province. They are owned by fishermen, farmers, musicians, film makers, crafts producers and other self-employed micro-business operators who see the benefit of working together to make their individual enterprises successful. They are also owned by local people who are to collectively provide themselves with retail, financial, health care, housing, child care and other services in their communities. They are also formed by communities to pursue business opportunities, create employment and engage in other community development initiatives, on a self sustaining basis.

Although co-operatives are businesses, they are fundamentally different from privately owned corporations. For example:

Each member/owner of a co-operative has only one vote, thereby providing for democratic decision making, rather than control being based on level of investment or number of shares held as in a private corporation;

The primary goal of a co-operative is to serve the needs of its member/owners (usually in the form of goods, business supports, services or employment), rather than maximizing financial return for shareholders as in a private corporation;

When co-ops do make a profit, it is distributed to the member/owners based on how much business has been transacted with the co-operative, not on how many shares held. Some co-ops do not distribute profits but are required by their members to re-invest in the enterprise or use the funds to support community projects.

In our experience, there is often a lack of awareness within government regarding the co-op business sector and, in some cases, inaccurate perceptions of what co-ops are about. Some view co-ops as not-for-profit organizations. Others see them as a business no different than any other corporation. The reality is that neither view is correct. Co-operatives are limited liability,

taxable enterprises incorporated under provincial legislation. Although they may have social goals they are self-sustaining businesses. In fact, co-operatives are a unique form of enterprise that embodies the best attributes of social responsibility, stakeholder accountability and business sustainability.

These and other distinctions make the co-operative model an appropriate business option for rural communities. By using the co-op model thousands of people in this province have become local stakeholders of self-sustaining enterprises that they own and control and that have been established to meet their own economic and social needs. Examples are as follows:

The Springdale Community Development Co-op uses the proceeds from the lease of its real estate holdings to fund local community improvement projects and provide services for youth in their region;

The Petty Harbour Fishermen’s Co-op is owned by local fishermen and has been operating for over twenty years. It provides a business structure that enables them to collectively respond to the ongoing challenges of the industry in a manner that puts their interests first;

The North Shore Ambulance Co-op is owned by drivers in Conception Bay North and provides ambulance services for communities in the region. The co-op has enabled ambulance operators to enhance cost effectiveness while improving services and bringing greater stability to the industry.

Co-operatives in this province are part of a broader Canadian network which includes over 9,000 co-ops that employ over 160,000 people and hold $160 billion in assets. Statistics indicate that 4 of every 10 Canadians are members of a co-op. Over 70,000 volunteers gain leadership and management skills through service on co-op boards of directors. Employment growth rates in co-operatives exceed that of the private sector and studies have shown that co-ops have a higher survival rate than investor owned companies.

Although not based here, a number of larger inter-provincial co-ops do business in this province. They play a greater role in our economy than most people are aware. For instance the province’s largest dairy production facilities are owned by co-operatives. The Co-operators Group is the largest provider of insurance services in the province. Co-op Atlantic operates Country Ribbon and provides wholesale services for local retail and agricultural co-ops. Mountain Equipment Co-op is based in Vancouver but has over 10,000 members in Newfoundland and Labrador.

Although our co-op business sector is small compared to other provinces, there is great potential for future growth. However, new ideas and approaches are needed to improve public awareness of the co-operative model as an alternative for socio-economic, community based development. Government departments, regional development agencies and community development workers need to become more knowledgeable about co-ops and play a greater role in supporting their development. The Federation’s new co-operative development strategy is intended to achieve these objectives, thereby enhancing the growth and development of the co-op sector in Newfoundland and Labrador.

3.0 A New Co-operative Development Strategy

3.1 Our Goal

Our long term goal is to position co-op enterprise as a key instrument of government policy to help create a more prosperous Newfoundland and Labrador, particularly in rural communities, where the need for new approaches to economic and social development is greatest. To achieve this goal, the Federation has developed a new Co-operative Development Strategy to increase public awareness of the benefits of the co-op business option and generate new growth and development. The strategy was developed based on an extensive program review and outlines a new and innovative approach to delivery of co-op and micro-business development services for rural communities.

3.2 A Partnership Approach

A critical component for successful strategy implementation will be the forging of new and more functional funding and service delivery partnerships with government, regional development agencies and industry associations. In particular the Federation recognizes that the province’s existing network of community economic development agencies, including the Department of Innovation, Trade & Rural Development (INTRD), must be engaged if success is to be achieved. Key partners will include the following:

The Provincial Government, in particular Government Services and Lands (GSL) in relation to co-op legislation and regulation; INTRD relating to research, policy development and delivery of co-op and micro-business development support services; Natural Resources (NR) with regard to enhanced support for co-op development in the agricultural sector; and Human Resources, Labour and Employment (HRLE) from a youth services and employment perspective. The Federation has previously worked with these departments on a number of projects and is looking to establish broader and more proactive working relationships in the future.

The Federal Government, in particular ACOA which is providing financial support to assist the Federation with implementation of the new strategy and also delivers the new federal social economy initiative; and Agriculture and Agri-foods Canada which is supporting co-op development in the province through the National Co-operative Development Initiative (NCDI).

Regional Development Agencies in particular the regional economic development boards (REDB’s) and community business development corporations (CBDC’s). They are becoming increasingly aware of the co-op business alternative and more engaged in supporting development projects. The Federation has been partnering with a number of REDB’s on co-op initiatives, primarily in the agricultural sector. CBDC’s are involved in a national initiative regarding how they might enhance their role in supporting co-op development.

Industry Sector Organizations where there is interest in exploring the co-op model as a development mechanism for their constituencies. The Federation recognizes that industry focused initiatives can be most effectively undertaken through partnerships, with the support of

the relevant sector organizations. Such partnerships are currently functioning with the NL Federation of Agriculture and the Blueberry Development Corporation. The Federation will work to develop new industry partnerships in the future.

Existing Co-operative Enterprises include our local co-op members, inter-provincial co-ops that do business in the province and the Canadian Co-operative Association. Our co-op members and affiliates have been increasing financial support for the Federation in recent years. At the 2004 annual meeting they endorsed the Federation’s new development strategy and committed to supporting its implementation. Many existing co-operatives are interested in new opportunities to expand their business interests in the province and can be important partners in new development projects.

3.3 Service Delivery Components

The development of new and expanded partnerships with these potential stakeholders will enable the Federation to implement the following development strategy initiatives:

A pro-active public awareness program to promote the benefits of the co-op business model as a mechanism to facilitate community engagement in sustainable development initiatives and to support small business development in rural Newfoundland and Labrador;

A regional co-operative developers network, which will enlist the support of INTRD regional offices, other development agencies and local volunteers to deliver co-op development support services at the community level. The Federation will provide ongoing support for the new network including training, resource materials and other technical assistance as required;

Strategic industry sector initiatives that will proactively identify opportunities in selected industry sectors where there is potential for co-op development. The Federation will provide co-op information, project planning and other technical supports to facilitate implementation of such projects;

A new micro-business development service in partnership with INTRD and other regional development agencies which will use the co-operative model to assist very small business operators in rural communities by encouraging them to work together for mutual benefit;

A renewed co-operative youth program through enhanced provincial participation in the Atlantic Co-op Youth Leadership program and implementation of new co-op youth initiatives for rural communities;

Enhanced research and policy development to build a larger provincial knowledge base relating to co-operatives and micro-business development focusing on new and/or innovative approaches that may have potential for application in this province.

4.0 A Renewed Partnership with the Provincial Government

Throughout our extensive planning process it was readily apparent that an enhanced level of provincial government support would be required for successful strategy implementation. The province has a strong presence in rural communities and is well positioned to assist in promoting the co-op alternative and to support development projects at the community level. The regional offices of INTRD are a unique network in this regard. They can be an important, cost effective resource in assisting the Federation with delivery of co-op and micro-business development services for local clients.

Rural policy development, co-op legislation, agricultural development, youth programming and small business development are areas where government is actively involved that are of significant importance to implementation of our strategy. Here again government presence is strong, and proactive support for co-op initiatives in these areas will be essential if we are to be successful. Such support for our strategy will also enhance the credibility of co-op and micro-business development services with regional development agencies in the province and with the public at large, thereby enhancing potential for success.

From a broader perspective, history has shown that when government creates the right policy and program environment that is proactively supportive of co-operative development, significant growth can be achieved. This was the case in the province from 1980 to 1990 when government support was high and many new co-ops were established. The pattern has been demonstrated in other parts of Canada as well, such as in Quebec, where a significant level of government support has led to the co-operative sector becoming a major player in the economy of that province.

Currently INTRD has indicated an interest in the possibility of an expanded role in delivery of co-op and micro-business development services, in partnership with the Federation. Other departments as well may wish to explore the applicability of the co-op model in such sectors as the fishery, health care, child care, municipal services and cultural development. For its part, the Federation can provide information and support services to assist in this regard. Such initiatives would help advance government’s rural development agenda, without the need for significant additional resources beyond what is already available from the Federation, government and other potential network partners.

Therefore, a renewed partnership between the Federation and the Province makes sense in many ways. Our strategy is compatible with government’s economic and social plans and can provide access to new and innovative models to support the development of rural communities. The Federation is not requesting a major new funding commitment to make the partnership work. What we are requesting is that government consider allocating some of its existing resources to supporting implementation of our strategy, based on the recommendations provided below.

5.0 Policy and Program Recommendations

In this section we have listed eight policy areas where we believe there is an opportunity for the province to play a more pro-active and supportive role as a key partner in the implementation of our co-op and micro-business development strategy. For each area, we provide a policy statement regarding what, from our perspective, needs to be accomplished; a summary statement of what action we propose to take to move each forward; and recommendations regarding a role for the province as a partner in supporting implementation.

5.1 Public Policy Renewal

More pro-active government policy support for the co-op sector is a key component of our new strategy. From our perspective, INTRD is most appropriately positioned to take a lead role in this regard. Departmental activities could include development of policy recommendations regarding co-op and micro-business development and working with other departments on sector specific co-op issues, i.e. in the fishery and agrifoods. GSL, because of its legislative/regulatory role, should also be a participant in policy development initiatives.

Policy Statement

The Federation will work towards a greater presence for the co-operative sector within government’s public policy development framework particularly in relation to the Comprehensive Regional Diversification Strategy.

Federation Action

The Federation will undertake further consultations with INTRD regarding potential for joint initiatives to better position co-operative development as a key component of government’s rural development program and policy framework.

Recommendations for Government

To enhance public policy support for the growth and development of the co-op sector the Federation recommends the following:

that INTRD include co-op development as a key component of the new Comprehensive Regional Diversification Strategy;

that INTRD consider NLFC representation on the Provincial Council of the Rural Secretariat to ensure that co-ops are well represented in the advisory process;

that the Province support inclusion of co-op development as a key component of future federal/provincial community development initiatives and/or funding agreements;

that INTRD include co-operative development as an element for consideration in future regional development evaluation frameworks;

that INTRD identify resources to facilitate ongoing liaison with the NLFC and the co-op sector and to follow up on the implementation of program and policy recommendations contained in this briefing document.

5.2 Public Awareness and Promotion

One of the key findings of the Federation’s recent Program Feasibility Study was that there is a need to better inform both government and the general public about the benefits of the co-op business model and its potential to contribute to the socio-economic development of our rural communities. In the past, the Federation’s communications efforts have been hampered by lack of resources to mount an effective, ongoing communications strategy. What is needed is a new and more consistent approach that utilizes different methods to communicate with different audiences, seeking targeted results over a definitive timeframe.

While an aggressive public awareness and promotional campaign is needed, the Federation recognizes it does not have the financial resources to undertake such activities. However the Province currently devotes a significant level of resources to promoting a wide range of programs and services as part of ongoing operational expenditures. The Federation would like to explore the possibility of including the co-op development message as part of government’s ongoing communications activities as a cost effective means of getting the co-op message out.

Policy Statement

The Federation recognizes the value of an effective public awareness campaign to raise awareness of the co-op enterprise model and will seek to have the co-operative message included in government’s ongoing promotional and public awareness initiatives, where appropriate.

Federation Action

The Federation will establish a public relations committee and invite participation from both levels of government to assess potential opportunities for expanded co-operative public relations activities. The Federation, with the advice of the committee, will develop public messages and other information tools which can be used by government and other partners in this regard.

Recommendations for Government

The Province can play a greater role in promoting the co-op model as a tool to support rural and small business development in the province. The Federation recommends the following:

that INTRD appoint its Director of Communications to the Federation’s public relations committee to provide advice on developing an effective public awareness program;

that INTRD enhance the visibility of co-op enterprise in its “Getting the Message Out” program, Small Business Week promotions, departmental display booths, media releases, speeches and other communications on an ongoing basis.

5.3 Development Support Services

As part of its renewed co-operative development strategy, the Federation is considering new ideas and approaches to expanding the availability of advisory support services for newly developing and existing co-operative enterprises. As with other aspects of our strategy, this new service would not require significant levels of additional funding for implementation. Again, the formation of service delivery partnerships with existing regional development organizations provides the most cost-effective mechanism to achieve this objective. Because of its network of existing offices and its community economic development mandate, INTRD can be a key partner in this regard.

A service delivery partnership between the Federation and INTRD would mean that the department would take on an increasingly stronger and proactive role in co-op development in rural communities. This would include promoting the co-op business option, dissemination of co-op information, advising existing co-ops as requested and assisting local groups with the development of new co-op enterprises. For its part, the Federation would provide a wide range of secondary support services including staff training, resource materials and technical expertise to ensure INTRD staff have the knowledge and tools required to effectively do the job.

It should be noted that this proposed new service is a fundamental shift by the Federation, in recognition of the accepted view that local and regional development agencies are better positioned to provide direct delivery of information and support for rural clients. This new approach would also build the capacity of other community development agencies; thereby creating a broader and more inclusive co-op development network over the long term.

Policy Statement

The Federation will pursue establishment of a provincial co-op development service to be delivered through partnerships with existing development agencies, both government and non-government, whose objectives are to foster employment creation and sustainable economic development in rural communities.

Federation Action

The proposed new service was endorsed by the Federation’s membership at the 2004 annual meeting and ACOA has provided financial assistance to support its implementation. The Federation has initiated preliminary discussions with INTRD regarding a potential role for its regional offices as the core component of a new, community based co-op developer’s network. These discussions will continue in 2005.

Recommendations for Government

Provincial government participation will be a critical factor if an effective community based co-operative developer’s network is to be established. The Federation therefore recommends the following:

that INTRD partner with the Federation to develop a joint program for enhanced delivery of co-op development support services in rural communities.

that, as part of the process outlined above, INTRD identify staff members to participate in a new co-op developer’s network and provide co-op promotion and development support services in their regions.

5.4 Legislative and Regulatory Renewal

A review of the history of successful co-operative development in Canada will clearly show that the greatest opportunities for co-operative development occur when there is a mutually supportive relationship between those who lead the development process and those who provide the regulatory framework. For many years, the Federation enjoyed that kind of relationship with the province where the lines of communication on matters of legislation and regulation were open and constructive. This resulted in an effective balance between orderly development and appropriate regulation of co-operative enterprise.

This relationship has weakened in recent years, and while it has not been adversarial, it has created situations not conducive to either effective development or regulation. There has been a growing tendency by government to treat co-operatives in the same regulatory manner as it would private sector corporations. This has included considering the possibility of integrating the Co-operatives Act with the Corporations Act. As was explained in Section 2, co-operatives are different and have their own, unique legislative requirements.

Policy Statement

The Federation will initiate development of a closer working relationship with GSL and the Registrar of Co-operatives to help create a stronger and more enabling legislative and regulatory environment to enhance the growth and development of the co-operative business sector.

Federation Action

The Federation’s Board will seek a meeting with INTRD and GSL Ministers to initiate a process whereby senior officials from both departments can begin looking more closely at issues impacting the co-op sector, from both legislative and developmental perspectives, with a view to enhancing co-op development in the province.

Recommendations for Government

As part of this process the Federation recommends:

that government allocate additional resources to the office of the Registrar of Co-operatives to enhance capacity to monitor regulatory compliance and address other co-operative legislation issues on an ongoing basis;

that government establish a legislative review committee, comprised of senior INTRD, GSL and Federation officials, to meet semi-annually and discuss legislative issues and recommend changes as required.

5.5 Research & Opportunity Identification

A key component of the Federation’s proposed new strategy is expanding capacity to undertake research and create a new and more current information base on co-operative and micro-business development. This will be a most useful support service for our service delivery partner organizations to ensure they are kept aware of what’s going on in other jurisdictions and have an opportunity to network with their peers outside the province. We will draw upon the knowledge and expertise of others across Canada and the world to maximize the effectiveness of our programs and services, where appropriate.

Policy Statement

Expanding access to information regarding new and innovative applications of co-op and micro-business development models and conducting new research on potential opportunities for development will be a key component for future growth and success. The Federation will pursue new partnerships and resources to expand capacity to undertake these initiatives. Federation Action

The Federation will explore the potential for establishment of a research and development protocol as part of its new strategy to keep abreast of new ideas, strategies and techniques in co-operative and micro enterprise development, in partnership with INTRD, Memorial University (MUN) and other appropriate research agencies.

Recommendations for Government

that government’s new Rural Secretariat undertake a review of potential opportunities for the co-op business model to play a greater role in helping achieve government’s policy goals in key rural industry sectors.

that INTRD’s Policy & Planning Division assist the Federation in identifying relevant co-operative and micro-business research initiatives and facilitate access to government and MUN research capacity to undertake related projects.

5.6 Agricultural Co-op Development Initiatives

The foundation of the more progressive and advanced co-operative systems throughout Canada was built by pursuing the potential for co-op development in the agriculture and agri-foods sectors. The Federation is aware that there is great potential within our agricultural sector to utilize the co-op enterprise model to address, on a collective basis, the commercial production and marketing of agricultural products in the province.

Policy Statement

The development of agricultural co-operatives holds great potential for economic development and employment creation in rural communities. The Federation will place a priority on the establishment of agri-foods co-ops through partnerships with industry associations and NR in areas of the sector that have potential for development.

Federation Action

The Federation and the province’s agricultural association have established a working committee to undertake joint initiatives to undertake a review of the vegetable industry and explore other potential opportunities for collaboration. The Federation will work towards building the capacity of this committee to undertake new initiatives to expand support for co-op development in the agricultural sector.

Recommendations for Government

In order to enhance support for agricultural co-op development, the Federation recommends:

that NR consider creating an “agri-foods co-op specialist” position to assist existing co-ops; help facilitate co-op research and development projects; and advise government on related policy and program initiatives;

that INTRD maintain its “Senior Agri-Foods Industry Specialist” position with an increased focus on liaison activities between government and sector associations regarding joint co-op initiatives;

that NR consider the establishment of a ministerial advisory committee to provide input and advice on the future role of co-op business in development of the agri-foods industry.

5.7 A Focus on Micro-Business Development

The Federation’s highly successful Micro Business Development Service ended on March 31, 2004 due to a lack of funding to support the in-field delivery of the program. Study after study confirmed that the program had tapped into a niche market for clients in rural areas not being adequately served by other business programs. During its life span over 500 clients accessed the service and MBDS secured over $520,000 in loans, ranging from $500 to $5000, with a default rate of less than 2%. Recognizing the value of this peer lending and mentoring service, INTRD has expressed interest in exploring the possibility of developing a new program model which will continue to make this service available for very small business operators in rural areas.

Policy Statement

The Federation continues to support the concept of a micro enterprise program to address a gap in services for very small businesses in rural communities. The Federation will seek new

opportunities to re-establish such a program, in partnership with other rural development agencies in the province.

Federation Action

The Federation will continue to pursue discussions with INTRD to implement a new micro-business development program in 2005.

Recommendations for Government

To re-establish a micro-business program for rural communities the Federation recommends:

that the province develop a policy statement promoting the micro-enterprise sector as an important contributor to economic development in rural communities;

that INTRD lead a research initiative to update information on the impact of micro-enterprise on local economies and;

that the province support existing plans for implementation of a new micro-business development program, through a proposed partnership between INTRD, the Federation and other regional development agencies.

5.8 Expanded Programming for Youth

For many years the co-operative business sector in eastern Canada has sponsored Atlantic Co-operative Youth Leadership Seminars which provides an opportunity for young people to learn new skills while increasing their knowledge and awareness of the co-op model. The Federation has sponsored many young people from this province who have participated in these seminars. We would like to build on the success of this program by increasing the level of participation of young people from rural communities in expanded co-op youth initiatives.

Policy Statement

The Federation will pursue the establishment of new partnerships with co-operatives, youth organizations, regional development agencies and government to expand availability of co-op programs for youth, particularly in rural communities.

Federation Action

The Federation will establish a committee to review this province’s participation in co-operative youth programming and assess potential for expansion and/or implementation of new programs and services in the future.

Recommendations for Government

The Federation recommends:

that HRLE include the Federation in future consultations relating to the development of youth strategies and programs where there may be potential for collaboration;

that HRLE appoint a staff person to participate on the Federation’s youth program committee to increase the department’s knowledge and awareness of existing co-op youth activities and assist in identifying potential opportunities for future partnerships.

6.0 Conclusion

The strategy proposed within this document represents the most significant and important shift in policy and programs for the Federation in its history. It moves us away from direct service delivery at the community level to provision of secondary support services for regional development partner organizations that will assist local groups pursuing the formation of co-op and micro-business enterprises.

This new approach recognizes the reality that community based development agencies are better positioned to respond to the needs of local clients, but need access to information and expertise so that they can most effectively do so. Our strategy also recognizes that the most efficient way to pursue community development in this province is for governments, the business sector and regional development organizations to form strategic alliances to achieve mutual goals. Such partnerships will provide for the necessary combination of resources and expertise that will offer the greatest chance for success.

The Federal Government has demonstrated its support for this new approach through funding commitments from ACOA and NCDI. Industry sector and regional development agencies are currently participating in a number of co-op development initiatives and others are in the planning stages. The co-operative sector is increasing its financial support for the Federation to facilitate strategy implementation. A new and more proactive partnership with the provincial government is now required to make the whole package work.

Implementation of the recommendations contained in this paper will constitute a major step forward in the Federation’s efforts to successfully implement this new strategy. A new partnership with the province through the Regional Diversification Strategy will enhance the credibility of co-ops and micro-enterprise as viable business development alternatives for rural communities. It will also ensure that those involved in establishing such enterprises receive the level of support services required to maximize their chances for success. This will result in the formation of new self-sustaining enterprises that will contribute to employment creation and community prosperity in Newfoundland and Labrador.

Resource List

A. Available Documents

- NLFC Development Strategy

- NLFC Program Review

- NLFC Operational Report – 2004 - Co-ops in NL – Lists/Statistics

- Co-ops in Low Income Communities

- Micro-Business Development Service Report – 2004

B. Selected Web Sites

- www.coopcca.com

- www.co-opsonline.com

- www.agr.gc.ca/policy/coop/home_e.phtml

- www.acyl.coop