Survey on Financing of Co-operatives

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Just over one-third of all co-operatives in Canada applied for financing, such as loans, capital leases, government grants and equity financing in 2007.

Of co-operatives that applied specifically for new or additional loans, lines of credit or credit cards, the vast majority received the full amount requested.

However, one-fifth of co-operatives indicated that trying to obtain financing of any kind was a serious obstacle to the growth of their organization.

Co-operatives are enterprises that are jointly owned by the members who use their services. They undertake economic and social development activities, such as creating jobs or providing goods and services that would otherwise be unavailable to the community.

Those most likely to have made a request for any type of financing were in the Atlantic provinces, followed by Quebec and Ontario.

Almost all of the co-operatives in Quebec that applied for new or additional loans, lines of credit or credit cards received the full amount they sought. Co-operatives were least likely to receive the full amount in Atlantic Canada, followed by Ontario.

The proportion of rural co-operatives that applied for financing was virtually identical to urban co-operatives. However, among those that applied for new or additional loans, lines of credit or credit cards, nearly all rural co-operatives received the full amount requested, while urban co-operatives were significantly less likely to receive the full amount requested.

About 61% of co-operatives involved in child care activities applied for financing, the highest proportion of all types. Those involved in health-related activities were next at 53%, followed by those in marketing (52%).

About 64% of co-operative start-ups applied for financing, more than twice the 28% for mature co-operatives.

Among co-operatives that requested financing in the three years prior to the survey, 53% indicated they had never made a request to the federal government for any kind of financing. Of these, 77% indicated they were not aware of any federal programs under which they would qualify for financing.

Co-operatives that had made a request for financing in this three-year period reported the most common reason they sought additional financing was to acquire additional working or operating capital. The second most common reason additional financing was sought was to purchase additional machinery and equipment, followed by buying additional land and buildings.

Note: The Survey on Financing of Co-operatives was designed to gather information on the amounts and types of financing available to co-operatives, as well as the challenges they face in obtaining financing. Like traditional businesses, co-operatives create employment and sell goods and services to communities. However, co-operatives are differentiated by their objective to maximise social and community benefits, which may create additional challenges in obtaining financing compared with other businesses.

The Survey on Financing of Co-operatives was a sample survey of co-operatives in Canada, excluding financial and housing co-operatives. These include community service co-ops, such as arts and recreation; child care; economic development; health; agriculture co-ops; natural resources and manufacturing co-ops; and retail co-ops.

The survey was jointly sponsored by Agriculture and Agri-Food Canada and Human Resources and Social Development Canada.

Definitions, data sources and methods: survey number 5150.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Client Services (toll-free 1-877-679-2746; sbss-info@statcan.gc.ca), Statistics Canada.

For information about the implications of these data for the co-operative sector in Canada, contact Michael Mangulabnan (613-759-6348; mangulabnan@agr.gc.ca) Agriculture and Agri-Food Canada, or Rahil Khan (613-957-9896; rahil.khan@hrsdc-rhdsc.gc.ca), Human Resources and Social Development Canada.

Table 1
Co-operative financing, 2007