Dave Sullivan
Northern News Services
Yellowknife (Jun 25/01) - The co-op movement throughout the North wants an end to government clawbacks of year-end rebates.
For those on income assistance, the government of the Northwest Territories says that a member's rebate is income. The money counts when social workers assess need and eligibility for assistance.
Revenue Canada does not treat the same windfall as reportable income, while accountants view the income as no more than a bulk discount.
Co-op members own a piece of the business. In small Northern communities that usually means grocery stores, but many are also in the business of selling everything from fuel to restaurants.
At the end of each business year, profits are split among members.
"We think it's unfair. You get penalized for supporting your own community," says John Argue, who serves on the board of Arctic Co-operatives. The umbrella body joins together dozens of small co-ops throughout the North.
GNWT's director of income support programs says while co-ops may be a noble cause, the government can't treat them any differently than corporations.
Bruce Evelyn says that eligibility for income assistance is based only on need, no matter where income comes from.
"Everything counts. There's no such thing as good or bad income," Evelyn said. "It's a tough concept to get across."
He said co-ops should be encouraged, but not through a program designed as a means of last resort.
For co-ops, "maybe there could be other economic development policies" like grants or tax breaks, he suggests.
Argue counters that co-ops are not like corporations because small membership fees mean there are no economic barriers to being part of one, and "you don't buy into it as an investment opportunity."
He's calling for a break on dividends as an incentive to be part of co-ops because of their sharing principles, and the fact they keep money circulating within a community.
"Why not put it on a sliding scale?" he asked.
The Nunavut government may be listening, although its policy is unclear. A recent report on income support suggests a sliding scale to allow some income, but only singles out co-ops in a separate recommendation stating their "incentives" should allowed to be offset by purchases. Income assistance officials in Nunavut could not be reached.
Arctic Co-operatives CEO Andy Morrison said there have been past dust-ups over the issue with the Nunavut government. He said officials backed down in Kugaaruk (Pelly Bay) a couple years ago, and prior to that in Iglulik a few years before Nunavut was formed.
Dividends are mostly cash but in Yellowknife they go into savings coupons and membership fees credits. That's set to change, with members of Yellowknife Direct Charge Co-op recently agreeing to allow cash back as an option. Manager John Taylor notes that not many Yellowknifers are on income assistance.
In Nunavut it was recently revealed that more than half of residents receive assistance.
The co-op dividends can be more than pocket change. Arctic Co-operatives chair Charlie Lyall reports he and his wife just received $5,000 back for shopping the past year at the Cambridge Bay Co-op, and he knows of families in other communities receiving thousands more.
Combined there are about 10,000 members under the Arctic Co-operatives umbrella. They employ 800 workers earning over $12 million in annual wages. Arctic Co-operatives in turn belongs to Federated Co-operatives, which posts over $3 billion in sales. Morrison said local co-ops are the biggest employers of aboriginals throughout the North.
"If the Hudson's Bay company had been a co-op, there wouldn't be any welfare in the settlements," he said.
