Thursday, November 10, 2011

International Newsletter on Sustainable Local Development
Newsletter #83
November 1st 2011

The social economy and municipal authorities: For sustainable development in local communities

Message from the Editorial Team

Ever since we first started publishing our Newsletter in 2003, we have stated that solutions need to be built bottom-up by communities and local resources; this is the path that leads to a true perspective of human justice and sustainable development.
This article by Yvon was written for the magazine called Développement Social in Quebec. It was published in the special number for the International Social and Solidarity Economy Forum (FIESS), that took place in Montreal from 17th – 20th October last. Yvon examines the relationships of various socio-economic actors who have organised at municipal or other levels in the province of Quebec; the second largest in Canada with a population of 8 million (Canada 34,5 M). The full issue, including the article, is available in English and French on the magazine website at
His article is well researched and precise. It illustrates how the local development tools in Quebec work: they all have the support of a legitimate legal framework, use collective joint management systems, implement an entrepreneurial development strategy that may connect from different sources, financial tools for investment. It has a framework that is specifically adapted to solidarity economy (this is known as social economy in Quebec), which is fully recognised in Quebec. As these tools were created many years ago, it means that it is now possible to measure the results in terms of job and enterprise-creation as well as their sustainability over a period of time. The philosophy behind the system recognises profit but it is not considered as THE end goal (lucrative for a few to the detriment of the community). The method involves local authorities in a participatory process and stimulates general mobilisation. The article confirms the maturity of the economic alternative. The FIESS has highlighted this by bringing together all the achievements that are providing bottom-up responses to essential needs at global level.

Editorial Team
Judith Hitchman
Yvon Poirier
Martine Theveniaut

The social economy and municipal authorities: For sustainable development in local communities

By Yvon Poirier

In Quebec, the relationship between the social economy and municipal authorities – and by extension local communities – is original and worth examining. This connection between municipalities and the social economy exists in part through local development centres (CLD) and regional committees of elected officials (Conférences régionales des élus – CRÉ) which each support in their own way the existence of the social economy.

CLDs: Technical and financial support for the social economy
In Quebec, responsibility for local development and entrepreneurial support belongs to regional county municipalities (municipalités régionales de comté – MRC) and larger cities. However, the law specifies that this work can be delegated to a local development centre. There are 120 such centres in Quebec: 111 CLDs proper and in some areas of Montreal 9 community economic development corporations (CEDECs) that have a CLD mandate . They are all non-profit organizations whose role is to accompany private and collective entrepreneurs in accomplishing their business projects and to provide a set of front-line services for businesses. CLDs and CEDECs form a link between the municipal world and social economy.

The Government of Quebec adopted Bill 171, creating CLDs, in December 1997. The bill followed Quebec’s Summit on Economy and Employment in 1996, which recognized social economy as a strategic area for development. The effort was in part to adapt business support policies. Under the legislation, CLDs have the mandate to prepare a strategy for entrepreneurial growth, including the social economy. At the same time, the government gave each organization an economic development fund, called Fonds de développement des entreprises d’économie sociale (FDEÉS), for specific support to social economy businesses. The organizations no longer have the obligation to keep such a FDEÉS, but a large majority nonetheless maintains a specific financial tool for the social economy. According to data from the ministère du Développement économique, de l’Innovation et de l’Exportation, more than $100 million has been invested through the FDEÉS in social economy businesses in 10 years (1998-2008), creating and maintaining more than 47 000 jobs and 5700 businesses.

Quebec City and the social economy
In 2008, the Government of Quebec adopted the Plan d’action gouvernemental pour l’entrepreneuriat collectif to increase the positive effects of collective entrepreneurship. It seeks to give leaders in this area concrete means that are adapted to their realities, to enhance the strength of the regions and to meet community needs according to a sustainable development approach.

The plan is for each CRÉ to sign a specific social economy agreement. Under its mandate, the Chantier de l’économie sociale du Québec guides the implementation of these agreements, particularly by supporting the creation of regional social economy poles in each region, a strategy which is also specified in the action plan.

In the Quebec City area, social enterprises have a social economy pole composed of 27 members. It adopted a number of rules for that composition, including balance between cooperatives and non-profit organizations, parity between men and women, representation of the sub-regions (Charlevoix, Portneuf), and representation of the various activity sectors. The organization is part of the CRÉ de la Capitale-Nationale, and the latter confirmed the rules set for nomination of pole members .

For the Quebec City region, the social economy offers a promising model, since the rate of survival for regular businesses after 10 years is just 19.5%, compared to 44% for cooperatives . Further more, because social economy businesses work so closely with their communities, they are committed to maintain their activities within the community and do not even think of ever “delocalizing”.

The City of Montreal’s policy
In 2009, the City of Montreal inaugurated its Social Economy Partnership for Community-Based Sustainable Development, the first public municipal policy in this area in Canada. The partnership is the result of cooperation between social economy leaders and the City of Montreal.

The partnership’s goals are to formally recognize the social economy’s contribution to the economic, social, and cultural development of the city; to support the social economy by drawing on the accomplishments of the past, by reinforcing existing means, and by adopting new methods to enable its growth; and to consolidate and increase the contribution of social economy members to the sustainable development of Quebec’s metropolis through the creation and development of collective businesses that meet citizen needs.

The partnership intends to function in five main areas, which are: support for collective entrepreneurship, solidarity supply practices, integrated promotion of the social economy, an increased role for the social economy in major metropolitan development projects, and an expanded role for the social economy in improving the quality of life of citizens through action in culture, recreation, tourism, housing, and sustainable development.

In 2007, turnover in the Montreal social economy was estimated at $2 billion. About 3600 establishments generated 61 500 jobs, representing 7% of total employment on the island of Montreal (as much as the tourism industry).

Cooperatives serving local populations
Outside large urban centres, social economy businesses are often key to the very survival of towns and villages.

Usually with the support of municipal governments, local populations have implemented activities to develop or maintain essential local services to avoid onerous travel and migration toward larger centres. These social economy initiatives prevent rural exodus and in some cases even reverse the trend.

In the past 15 years, for example, over 40 health cooperatives have been created and are still operating in various regions of Quebec. Most of these cooperatives were established to ensure better access to primary health services. Clinics therefore offer one or several physicians and sometimes other professionals, such as nurses and pharmacists. This is because, in smaller communities, doctors have been abandoning their private practices to set up in larger centres, leaving local populations without this essential service.

Citizens therefore created the cooperatives to establish a work infrastructure more appealing to doctors, including avoidance of lengthy travelling (50 to 100 kilometres) for basic medical attention. In most cases, either the municipality itself, the local Caisse Desjardins, or the two entities together, have initiated or guided the process of creating the cooperative (providing space, facilitating meetings for cooperative training, etc.). Usually, more than 80% of the local population is member of the cooperative. However, non-members have access to the services covered by the public health insurance plan.

In many small towns and villages, essential services such as gas stations and grocery stores disappear due to their lack of sufficient returns for large corporate owners whose only criteria is economic profitability. Again, to avoid costly travel and loss of time, citizens and municipalities have worked together to create multi-service cooperatives to provide the community with basic services, including postal counters and Automated Teller Machines. The vast majority of these projects adopts a solidarity cooperative approach, which involves more than one category of member.

Challenges remain
Although relations between local authorities and the social economy sector have been growing since 1998 through CLDs and CEDECs, they have often remained occasional or indirect, especially in regions where the social economy lacks a strong network.

In the rural world, municipalities are often very active in implementing and supporting collective businesses. In many sectors, such as housing, recreation, culture, local and citizen services, and waste management, municipalities depend on social economy businesses to meet community needs.

In urban areas, it has only been through the adoption of Montreal’s 2009 policy and the implementation of agreements under the Plan d’action gouvernemental pour l’entrepreneuriat collectif that formal partnerships between local authorities, through the CRÉs and social economy leaders in various regions, have developed, in part to promote and strengthen the social economy. In most regions, such partnerships are still in an initial phase and much remains to be done to consolidate them; however, they are already opening up an expansive work area to develop social economy businesses in each region that are capable of meeting citizen needs in every municipality of Quebec, whether in the environmental sector, sustainable transportation, or local services.

Original article (in French and English) published in magazine Développement Social, Volume 12, No. 2, October 2011

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Message from the Editorial team
The production of this Newsletter published in French, English, Spanish and Portuguese is entirely done by volunteers.
We wish to thank the following volunteers for their support:
Michel Colin (Brazil)
Paula Garuz Naval (Ireland)
Évéline Poirier (Canada)
Brunilda Rafael (France)
We also want to thank the Policy Research Institute for the Civil Sector (PRICS) of Seikatsu Club in Japan for the translation to Japanese.
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Yvon Poirier