New Co-operative Development in Canada

Findings from Research Emerging from the Co- operative Development Initiative (2009-2013)

New Co-operative Development in Canada Project


The Measuring the Co-operative Difference Research Network supported the development of a report on the research emerging from the Co-operative Development Initiative from 2009-2013. This report included a review of the experiences, innovation, and challenges, as well as recommendations for the co-operative movement, social economy organizations and policy makers to best help support co-operative development in Canada.

Executive Summary

This report sets out to review the experiences, innovations and challenges of new non-financial co-operatives in Canada. The research questions guiding this research are the following:

  • How have non-financial co-operatives in recent years from across Canada’s provinces and territories and in different economic sectors, sought to meet their members’ or communities’ social/cultural/economic/environmental needs via the co-operative model?
  • Why is the co-operative model chosen over other business types?
  • What are the challenges faced in starting-up or further developing a non-financial co-operative and why and how do non-financial co-operatives succeed or fail to overcome these challenges?
  • What innovations have new non-financial co-operatives forged in order to offer both members and surrounding communities new or better ways of provisioning for their social/economic/cultural/environmental needs?

To answer these questions, we have tapped into an illustrative sample of new and emerging co-operatives that were involved with the Co-operative Development Initiative (CDI) from 2009-2013. To gather and analyze our data, a mixed-methods, and grounded theory methodology was used, including survey, interviews and focus groups.

20150825_CMC_Socio-econ-needs-chart-HI

On the whole, we found a predominance of socially focused motivators and needs driving the startup of new co-operatives in Canada from our research sample. Collectively across Canada, for instance, social care and social services, alternative health care, alternative and organic food, alternative and renewable energy, community economic development (CED) and offering employment for marginalized communities made up a total of 62.2% of interests and motivators for the creation of new co-ops in our sample. These are what co-operative founders and members saw as lacking in their communities and what drove their co-operative business.

When we filtered the motivations for starting a co-operative through the goods and services produced or delivered, we again explicitly found a strong, outward, socially focused direction to new co-operative development in our sample, again suggesting that many of Canada’s new co-ops are created to deliver socially useful goods and services rather than being only motivated to meeting member needs or business interests. Many of the new co-operatives in our sample were thus also social enterprises—that is firms that rely on some market activity but with strong social missions aimed to deliver particular goods and services to communities. Since there is no formal legislation or broadly agreed upon nomenclature for conceptualizing these types of co-operatives in Canada, we call them for this report Canada’s “social mission-driven co-operatives.”

While many of the new co-operatives in our sample from across Canada are motivated by and are actually delivering socially focused goods and services of benefit to multiple community stakeholders beyond just the co-op’s members, new Canadian co-ops are also experiencing a common set of challenges. These include:

  1. Lack of knowledge by co-op founders of the specifics of the co-operative model;
  2. Lack of resources for, or knowledge of where to access start-up funds and funds for ongoing business consolidation and growth;
  3. Human resources issues (i.e., possible volunteer burnout, membership and staffing engagement, division of labour issues, retention and motivation, etc.); and
  4. Organizational issues related to governance.

Moreover, we noticed four major “paradoxes” emerging with new Canadian co-operatives in our sample, suggestive of the tensions present with developing and consolidating new co-operative initiatives today:

  • the paradox of external funding: the need to pursue supportive and external sources of funding to supplement revenues and start or sustain new projects vs. the time it takes to pursue it, possibly taking a co-op away from the daily tasks of running the business while not guaranteeing returns;
  • the paradox of participative decision-making and governance: decision-making and governance viewed as a distinguishing feature and strength of co-ops vs. the competitive disadvantages democratic governance brings at times when quick and decisive decisions are needed, especially in competitive markets;
  • the paradox of member engagement and diversity: the importance placed on maximizing member engagement and diversity vs. issues affecting fluid governance, decision-making, and business actions brought on by conflicting member interests, needs, or ideas; and
  • the paradox of volunteering: the recognition that much of the work that happens in co-ops is volunteer labour vs. the burn-out and difficulties that emerge from the fact that a core and often small group of members do most of the volunteering.

For overcoming some of these difficulties and tensions and for assisting in getting new co-operatives off the ground, the new co-ops in our sample relied much on the expertise and guidance of co-operative developers. Over 54% of new co-op projects from our survey sample tapped into the expertise of a co-operative developer at some point. Moreover, almost all co-ops from our sample that did use co-op developers said that the developer completed their tasks successfully and were happy with the support they had received from them.

Besides co-op developers, other major supports for new co-ops in our sample from across Canada included: community economic development initiatives, other co-operatives, financial institutions such as credit unions (particularly in the founding stages, but not as much when the co-operative is operational), and perhaps most tellingly, individuals such as visionary leaders or groups of leaders who often become the co-op’s founders. The latter points to a strong presence of “collective entrepreneurialism” across Canada’s new co-ops and, again, to the importance of co-operative developers.

This study also found evidence for the strong role of learning in the new co-operatives in our sample. This learning is mostly informal and “learning-by-doing,” underscoring the inherent “associative intelligence” that the co-operative form fosters for acquiring the skills, values, and practices needed to run a co-operative, work with others collaboratively, and engage with their social missions and the community. Again, co-operative developers also play a strong educational role regards members’ take up of co-operative values, principles, governance, and in how to deal with business issues. However, the use of formal learning via courses and at the college level remains very minimal with new Canadian co-operators, our data evidenced.

Emerging from the findings of this research, this report concludes with seven major recommendations for the co-operative movement, social economy organizations and policy makers to best help support new co-operative development in Canada:

  • Design a comprehensive strategic plan and approach to support new co-operatives in Canada, which has input and buy-in of all key stakeholders (co-operatives, support organizations and different levels of government).
  • Develop a national clearinghouse for co-operative development, including appropriate legislation, funding sources, networks and networking opportunities, and useful community linkages.
  • Create specific capacity building strategies to be delivered by key co-operative stakeholders, from start-up through the early stages of co-operative development, and focussing on associative skills, leadership, business management, financial capacity, and partnerships/networking.
  • Co-ordinate and build-up the activities of key supportive co-operative organisations in order to nurture skills, to provide sustained support, and to raise awareness of the needs of new co-operatives.
  • Provide further supports to co-operative developers to network, share and work together in order to keep their knowledge and skills current and up-to-date.
  • Design and implement program support that is specific to the reality and needs of new co-operatives in Canada.
  • Support the creation of more formal education outlets and co-operative knowledge mobilization initiatives in all provinces for co-operative members, managers, volunteers, other stakeholders, and the general public and policymakers.


 Publications

Duguid, Tarhan and Vieta. New Co-operative Development in Canada. 2015. PDF.

Duguid, Tarhan and Vieta. New Co-operative Development in Canada. 2015. PDF.


Presentations and Webinars


Other Resources

Whether you are already a member of a co-operative, thinking of starting a co-op or just considering a co-op as one of several options, CMC can direct you to the information you need to make sound decisions and move forward. – Co-op Development, Co-operatives and Mutuals Canada.

In the fall of 2014, Co‑operatives and Mutuals Canada created an updated inventory of Canadian financing programs that are well adapted to the co‑operative model. This inventory constitutes the second stage of CMC’s assessment of capitalization tools accessible to the Canadian co‑operative movement. Co-op Development Funds Inventory Report. 

Researchers

Fiona Duguid

Fiona Duguid

Consultant, Duguid Consulting

Bio.


Mumtaz Derya Tarhan

Mumtaz Derya Tarhan

PhD Student, University of Toronto

Bio.


Marcelo Vieta

Marcelo Vieta

Assistant Professor, University of Toronto

University bio.