Brandon Sun, October 15, 2012 - David McConkey
Co-operatives are a familiar sight in Westman. And right now is a
great time to notice them again. This is not only Co-op
Week in Canada, but also the United Nations International
Year of Co-operatives. What’s more, co-operatives have a new
importance with today’s volatile globalization.
Co-operatives are member-owned business enterprises. Probably many of you are already co-op members. Perhaps you buy some of your groceries at Heritage Co-op. Or subscribe to cable TV from Westman Communications Group. Or bank at a credit union (which is a financial co-operative) like Crocus, Sunrise, Vanguard, or Westoba.
There are also others, including smaller housing and child-care co-ops. And what about that idea for a brew pub in the old Brandon fire hall, recently outlined on this page? That proposed new venture is a co-operative.
Co-operatives bring democratic citizenship to the marketplace. As the owners, the members share in the decision-making by voting for the Board of Directors. Members also share in any surplus revenues that are generated.
Co-operatives, along with non-profit organizations, are sometimes described as the social economy of our free enterprise society. The social economy provides an important complement, partner, and alternative, to both the government and the for-profit sector.
This is a good thing. As one example, many people (at least judging from “Sound Off”!) feel that the gasoline market is rigged. Why is the price usually exactly the same, or annoyingly different in different communities? Yet it seems that government inquiries conclude that everything is fine, or that nothing can be done.
But we can do something. We can become owners. I don’t worry when paying the going price for gas. When I fill up at Heritage Co-op, I know I will get a share of any net earnings.
Incidentally, I am also among those Westman residents who drive fairly often to Winnipeg. We have discovered the advantage of becoming a member and buying gas in Winnipeg at the Red River Co-op. Last year, more than 10% of the amount we members spent was paid back to us.
This share of the revenue that is paid back to co-op members is called a “patronage allocation.” Usually, some of this patronage allocation is refunded directly to members, while some is added to members’ “equity” accounts. An equity account is typically paid out in cash when the member moves away or turns 65.
Where this can get confusing is that the federal government requires co-ops to withhold as income tax 15% of any patronage allocation over $100. That is why at tax time members can receive a T4A slip from their co-op.
The government requires businesses that buy supplies from a co-op to include the patronage allocation in their business income. But because many – if not most – co-op members are not businesses, this often ends up being a needless hassle.
Here is something that the federal government could do to mark the International Year of Co-operatives: raise the $100 minimum to, say, $500. That would then spare many members the bother of recording the T4A slip information when filing their income taxes. Time and expense would be saved by co-ops, their members, and also the Canada Revenue Agency.
Co-operatives are widespread. One-third of Canadians are members of a credit union (in French, caisse populaire). This is the highest per capita participation rate in the world.
Co-operatives can also benefit those in other countries, especially where people are really struggling. Co-ops and credit unions can greatly help individual consumers, small business owners, and local community development. Worldwide, 80 million credit union members live on less than $2 per day.
Finally, credit unions are of special importance in today’s volatile global economy. Because credit unions only lend money locally, they provide stability and protection from international turmoil. Credit unions are also an alternative to the financial shenanigans that led to the recent world economic crisis.
So, celebrate Co-op Week and the International Year of Co-operatives, which has the theme: “co-operative enterprises build a better world.” There is more information on the websites of our local co-ops and credit unions, and at www.canada2012.coop. And there are community events this week, including Thursday – International Credit Union Day.
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