This article provides an overview of various financing models used in the Province of Quebec and in other parts of Canada. Strong financing for co-ops has three players — the co-op's members, the wider co-op sector, and the government.
- A co-op through its members has to demonstrate that it believes in itself by contributing and risking (initially through the purchase of member shares, and in subsequent years through retained earnings or accumulated surpluses), the financial resources to carry out its business. This is true for most businesses.
- This does not mean that the co-op's members have to shoulder all the responsibility for its financing, nor does it mean that members need to have all of their individual investment up front.
- Building upon the principle of inter-co-operative solidarity and mutual support, there have been models developed, and shown to be beneficial, that share the responsibility for assisting new co-ops and co-ops that want to expand their business. The co-operative sector embodies these in both a supportive infrastructure and financial involvement.
- In regions where there has been strong co-operative development, the co-operative sector has cultivated government support to augment what the co-operatives can do by themselves.
In all the examples shown below, which speak mainly about gathering and utilizing the financial resources needed by co-operatives to carry out their business plans, there lies behind them a whole infrastructure of co-operative development groups which supports those co-operatives. They do this through public and member education, the provision of business advice and mentors for management and boards, and the development of government support and policies for co-operative businesses. Without these supports the financial models would not have been developed, nor would the finances be applied wisely, and the co-operatives be sustained.
Quebec has a high level of collaboration between the co-op sector and the Province of Quebec. It has an infrastructure comprised of co-op sector federations, provincially funded co-op councils, and provincial co-op associations. It has been built over decades. One point of collaboration that resulted in providing both a vision and a map to orient the development of co-operatives was the production of the Guide for Analysis of Social Economy Enterprises in 2004.
As Lebossé states "the presence of the Desjardins Movement, a major financial institution with which nearly all Québecers have a connection (Desjardins has more than 5 million members), has contributed to the natural integration of co-operative reality into Québec society". With a provincial population of just over 8 million people, this means that over 60% of the people in Quebec are members of this credit union. With assets of more than $180 billion, Desjardins is the main bank in Quebec, commanding about 40% of the market.
In 1971 Desjardins joined with the CSN (Confédération des syndicates nationaux), Quebec's second largest federation of unions, to form the Desjardins Solidarity Credit Union (CECOSOL) for the primary purpose to provide services to co-operative enterprises. Around 80% of worker co-ops are members of this credit union, which is the only credit union doing the majority of its business with organizations rather than with individual members.
During the early 1980's when Quebec experienced a severe economic crisis, these co-operative-initiated institutions worked in tandem with a network of agencies which the Quebec Government developed, to support local co-operative and social economic activity. Registered as co-ops these regional agencies are called CDR (regional development co-operative) and have the mandate to help create co-ops and to ensure inter-co-operation between co-ops of different sectors.
There now is "strong" support for co-operative development among the general population, with Government legislators and bureaucrats, and in other parts of the economy. An illustration of such support is that in 2012-13 the Quebec Government contributed $30 million dollars to co-operative development. In that same year the Canadian Federal Government sent shock waves during the International Year of Co-operatives by cutting all co-operative development funds, and leaving a skeleton staff in the Co-operatives Secretariat. Although Quebec's support is seen as strong in comparison to other provinces in Canada, it is important to note that co-operatives are still seen as a sub-option, and represent approximately 15-20% of new business creation.
In terms of structural support, there are a total of 18 federation-type organizations which are members of the Conseil québécois de la cooperation et de la mutualité. (CQCM). Between 1981 and 1987, 10 organizations were created. Then between 1990 and 1998, 8 new ones were added. In 2013, 3 of these federation are workers co-op federations (Forestry, Paramedics and the Réseau for all other types). These 3 are members of the Canadian Worker Co-operative Federation (CWCF). Add to that the 11 Coopératives de developpement regional (CDR) whose role is to help create new co-ops in their territory and support the development of existing ones.
In terms of proximity financing, we cannot overlook the creation in 1998 of the Centres locaux de développement (CLD) following the Politique de soutien au développement local et régional (April 1997). On the island of Montreal, nine (9) of the 18 CLD operate under the name of Corporation de développement économique communautaire (CDEC). There are 120 CLD's across the Province that support economic development and job creation in their territory. They all manage a grant programme dedicated exclusively to social economy businesses (including co-operatives and non-profit organizations). The criteria are defined locally, and some entities exclude for-profit co-operatives which are then offered the loan programme, also accessible to co-operatives (10% of this programme is given out to social economy businesses). Between 2004 and 2006, there has been $37 million given out in grants to social economy businesses.
An office of Desjardins called Desjardins Development Capital also offers three (3) types of financing to meet the specific needs of co-operatives in Quebec. The purpose of this paper is not to list every program accessible to co-operatives as there are multiple programs hailing out of different government ministries, so the above list is limited to the main actors. See this article for more.