Webinar Held April 18th
This presentation examined the role of the Unleashing Local Capital Project to increase local investing in Alberta by establishing Opportunity Development Co-operatives. We discussed the role of intermediaries to support innovators at the grass-roots level, connect with technical experts and existing local investing regimes, and to build networks and resources that will assist the creation of Opportunity Development Co-operatives in other communities.
We also focused on the role of the co-operative structure to facilitate local investing and the potential to create transformational change in the local economy.
Presentation Slides: Download here
Presentation Recording: Download here
* to download right-click and select “save linked item as…”
Presentation Transcript: Webinar Transcript April 18 Unleashing Local Capital
Paul Cabaj is the Director of Co-op Development with the Alberta Community and Co-operative Association (ACCA). He was involved as a researcher in two BALTA research projects that contributed greatly to the development of Unleashing Local Capital.
Seth Leon is a research officer at the Alberta Community and Co-operative Association. He is also a member of the Unleashing Local Capital steering committee, and is currently working on a co-operative development project with First Nations and Métis Communities.
Crow’s Nest Opportunity Development Cooperative: The Crowsnest Opportunity Development Cooperative (CODC) was formed in January 2013 as a pilot initiative developed by the Rural Alberta Development Fund and coordinated by Alberta Community and Cooperative Association.
The Unleashing Local Capital Project was a 2 year project funded by the Rural Alberta Development Fund
- We had multiple project partners (CDEA, AU, U of A, ARDN, ACCA, CFNA)
- Right from the beginning these organizations joined as partners and received funding for the project. It was not just our networks, institute, etc. This was really a joint process. We met at least every 3 months and almost every one of the partners is involved in the project in some form or another.
- The funding was approx. 2$ million with other donation in kind.
Our proposal was to establish 3 pilot Opportunity Development Co-operatives. We wanted to emphasize that Opportunity Development Coops are important for investments but it is also really an opportunity for engagement of people at the cooperative level. The money is important but actually just as if not more important is the active leadership on the ground.
- Social capital is linked to character lending/character investing that is leading these projects. It is really about engaging community leaders
- Through this process we developed training materials, resources, and templates to scale out project to other communities
- Address local capital retention issues and promote a local financing model
- Mobilize local resources and combine, human, social, and private capital
- Re-localize and invigorate the local economy: as we look at the local economy, it works for people that believe in it and are engaged in it. This is particularly important for rural communities, where people have migrated to cities, lost hope in the local economy. That’s one of the greatest benefits of this project is that it is able to re-energize people and re-invigorate the local community
- Connect with and support community leaders – a significant portion of our project is the depth of community leadership. Those are the folks that are going to drive it. People may like the idea, but they will actually do it because they trust the leadership
- Character lending and character investing. We are rooting the process in engagement with the local community leaders.
- Provide technical support and awareness about a new financing structure
- Change attitudes: there is a gap in how we look at funding. Communities will look to government or grants, investments and then on the other hand they look for the market to invest in areas that are way outside of the community, mutual funds, investment markets in New York and Toronto, etc. (4.4$ billion a year leaves AB RSPs and most of that goes out into these financial mechanisms which are impersonal and not connected to the local community)
- Investing versus fundraising
- Building up local expertise versus relying on outsiders
- Connect pilot projects with other resources
We find that unleashing local capital is right in the middle of those two perspectives of funding (i.e. in between seeking government grants and private markets)
- Rotary clubs are built by local people who are local business leaders with an interest to support the local community
- You can look at grants but also invest locally
- Rediscovering that capacity again is very interesting
- Building that expertise within the community, rather than relying on outside expertise, people that have no interest in what happens inside, on the ground
An Opportunity Development Co-operative meets the need for its members to invest in local business development, provide financing to local entrepreneurs, and facilitate community ownership of key economic infrastructure, and strengthen the local economy
The key role here is the facilitation, who takes the project forward?
If you can combine local social capital with place based engagement, and community based financing for opportunity development, then the opportunity is developed. These are the areas that we look for moving forward.
Another term we used is Community Hall Building or “Barn Raising in the 21st Century”
- This is not actually new, this is actually how communities formed in the first place
- Now our target is rural communities for the most part
- The money was there but it was really the social capital and social equity that created this in the first place
- Some of the work we are talking about here was started with re-vitalization of rural communities in the UK
- When you approach a community experiencing downturn, they have hope. Someone will come in and start the businesses again to go forward (you can just wait and that will happen)
- There are other folks that are on despair. Communities are often divided in this way. Some people are just waiting for the doors to close
- There is also a group that wants to move forward. What we found is that oftentimes, this group is often not composed of community officials. These people have a vision, a focus, and this often spreads
Thirteen years ago, this grain terminal was bought out by Agricorps, who wanted to shut this terminal down. As a response, complaints came out to the competition bureau and the group tried to find private buyers but without luck.
- had support from community to form coop
- raised target of 1.2 million dollars
- the investment came from all across the board
This was almost two years ago, now Westlock is the most profitable grain terminal in all of Canada. Beforehand, no one would approach this project in terms of debt financing, equity. Today, it is actually now doing more business than Agricorps’ terminal in Edmonton
Resource: Westlock Case Study Paper
Battle River Railway NGC
- was going to be shut down,
- these farmers would have been impacted
- raised 3.7$ million of necessary 5.4$ million, over 500 investors, almost all of them farmers, have rights to the train to get the grains to market
- this has been an incredible story, now making return, going into tourism business
- again, has to do with the leadership
Dan Ohler: Sangudo Opportunity Development Co-op
I come from a small community Sandugo, Alberta. Our community was dying a slow death. I don’t think people really noticed what was going on. When the school district threatened to close our high school, we knew that there was a crisis happening. People came out in huge numbers to meetings to figure out what we can do to keep the community alive.
Between 2005 and now: the most important thing that happened was that there were some leaders that came out of those meetings that decided to work together. They looked for anything in our community that would help us.
We became part of a program with Alberta Recreation and Parks, which assisted us with coaching, consulting and financial help to build playgrounds skateparts, recreation and beautification points. The program grabbed these leaders and had them working together.
Despite the support, the recreation alone was still not enough; about half of our businesses were empty. We started looking for ways to help our economy and completed a feasibility study to form a coop.
We hired Paul Cabaj as our consultant. At first, we started by looking at an arts and culture coop, a tire shop, hardware store, restaurant, etc. When we learned that a meatpackers was for sale, we realized there may be a good opportunity to pursue. We are a primarily livestock based agriculture community so the closure of this meat shop would really hurt our community. We were able to work out a very good lease agreement and keep the doors open.
The guys from the meat shop applied for two grants, one was to renovate the back end of their plant for safety and security of animals, the other was a grant to rebuilt smokehouse and sausage kitchen, these were matching grants, in three weeks we collected 110,000 local capital to inject in that local business, now it is a world class meat packing operation, people from all over come to look at how this operation
Things were working very successfully for over a year, when we learned that our local Canadian Legion was going to sell. We didn’t want another vacant building. A group of people started talking about opening a restaurant, which was very needed in our community. This coffee shop became so vital for us, a place for people to gather and engage.
So it 18 months, we collected about $400,000 of local capital and injected into transition of ownership of that business, brand new business and expansion of the business. This money was a lot for our community.
The key is local people invested in their own local communities where they support the businesses because they are invested in them as well.
Q & A: Round 1: Click here to download