Co-op News (August 2019)

CANADA
Housing co-ops hail federal plan
to tackle affordability and homelessness
The Canadian government has announced
the second phase of its federal plan to
protect housing affordability for 20,000
low-income co-op households.
The Federal Community Housing
Initiative is part of the National Housing
Strategy, launched in 2017. The two-phase
CA$55bn (£33.16bn) programme aims to
remove 530,000 families from housing
need and cut chronic homelessness by
50% over the next decade.
Phase one extended rental assistance
for federally administered community
housing to 31 March 2020, while phase
two extends this assistance to 31 March
2028. A total of $462m (£278.56m) will be
allocated over the eight years.
The government will also fund
other forms of community housing,
providing similar security of tenure for
55,000 households.
Adam Vaughan, parliamentary
secretary to the minister of families,
children and social development, said:
“For decades the co-op housing sector has
been an important partner in the delivery
of federal housing investments.
“Sustaining this relationship is critical
to the success of the National Housing
Strategy ... Phase two aims to strengthen
the co-op housing sector, help providers
achieve greater efficiencies and better
respond to residents’ needs. Both
phases are intended to work together to
strengthen the co-op housing sector over
the long term.”
Frank Wheeler, president of the
Co-operative Housing Federation of
Canada, said: “Today’s announcement
will provide these vulnerable households
the comfort of knowing that their housing
is secure for many years to come.”
p Athletes Village Housing Co-op in Vancouver
(Photo: Co-op Housing International)
CHF Canada executive director Tim
Ross added: “We commend the federal
government for confirming this important
step, and we look forward to further
strengthening our partnerships to
tackle the housing crisis. We know that
1.7 million Canadians are still in core
housing need, and they want the
affordability, security and communities
that co-ops provide.”
NEW ZEALAND
Setback for movement as leading dairy co-op demutualises
Dairy co-op Westland – which last
year won the national movement’s top
accolade – is to demutualise.
On 4 July, Westland Milk Products’
shareholders approved by 2,494 to 165
the sale to Hongkong Jingang, a wholly
owned subsidiary of Inner Mongolia Yili
Industrial Group. The Chinese company
will pay NZ $3.41 (£1.80) per share.
Under the sale, shareholder farmers
who are also existing suppliers will have
their contracts guaranteed by Yili, at a
price comparable to the minimum rate of
NZ dairy co-op Fonterra, for 10 seasons.
Westland chair Pete Morrison said
Yili “provides a very strong route to
market as one of the world’s leading
dairy producers”. He added: “When the
board initiated the strategic review, we
did so with the full understanding that
all Westland farming families needed
a competitive milk payout.”
Westland, formed in 1937, processes
around 3% of NZ’s milk, but fell into
serious debt and was unable to pay a
competitive rate to farmers in recent years.
In 2002 Fonterra made a merger offer to
Westland, which was rejected. It held talks
with Westland more recently to explore
co-op solutions but no deal was reached.
Craig Presland, CEO of Co-operative
Business New Zealand, said co-ops
continue to play a key role in the economy.
In 2o18 the apex body named Westland its
Co-op of the Year.
In a blog post, he said: “The challenge
here is to balance capital retentions with
annual payouts appropriately, while
prudently investing in capital projects
such as new or upgraded plants.
“Placing too high a portion of earnings
into annual milk payouts, and not
retaining enough for future capital
projects and/or investments, can only
lead to increased bank borrowing, which
can prove to be disastrous.”
This is the latest bad news to hit the
dairy co-op sector, following the sale last
year of Australia’s Murray Goulburn.
18 | AUGUST 2019