Submissioncreditunionsandcaissepopulaireact 2015 02 05

February 5, 2015 Laura Albanese Parliamentary Assistant to the Minister of Finance c/o Budget Secretariat Frost Building North, 3rd Floor 95 Grosvenor Street Toronto, ON M7A 1Z1

Re: Credit Unions and Caisses Populaires Act Legislation Review

Dear Ms. Albanese, The Ontario Nonprofit Network is please to make a submission on the legislation review of the Credit Unions and Caisse Populaire Act. Please feel free to contact me if you have any questions or would like further information at cathy@theonn.ca or (416) 642-5786.

Sincerely,

Cathy Taylor, Executive Director, Ontario Nonprofit Network

720 Bathurst Street, Suite 405 @ Centre for Social Innovation (CSI) Annex Toronto, ON M5S 2R4 | (416) 642-5786 | theonn.ca

February 5, 2015

Credit Unions and Caisses Populaires Act- Legislation Review The Ontario Nonprofit Network (ONN) is the provincial network for the 55,000 nonprofit organizations across Ontario. As a 7,000-strong network, with a volunteer base of 300 sector leaders, ONN brings the diverse voices of the sector to government, funders and business to create and influence systemic change. ONN’s focus is on enhancing the ability of public benefit organizations to do their work in local communities. This includes enabling their acquisition of community assets and advocating for the resources and capital these vital organizations need to do their work building thriving communities.

A key partner for many nonprofit organizations is their local credit union or caisse populaire.

These financial institutions tend be responsive and understanding of the needs of their members and communities. ONN is pleased to make the following recommendations to enhance the ability of the Ontario Credit Unions to contribute to their communities: Recommendation 1: Make explicit in the legislation The Credit Union and Caisses Popluaire’s role and responsibility to meet the needs of its members while also meeting the needs of their communities.

Many credit unions are actively engaged in their communities. They invest and support local communities through their loans and in addition undertake related community activities. For example: Credit Unions, like Alterna Savings and Meridian Credit Union, serve Ontario residents and have an existing commitment to working with and building strong local communities. Even credit unions with more focused employee memberships are engaged with their members around community concerns and loan to local businesses. The Caisses Populaires also have a long tradition of operating to strengthen local francophone communities. Making more explicit, in legislation, the Credit Union’s commitment to invest in, and support, local communities would strengthen the ability of these financial institutions to be vitally involved in their communities.

Recommendation 2: The Minister of Finance to use the dormant accounts of Credit Unions to establish an Investment Fund for public benefit organizations in Ontario. Such fund can to be managed in partnership between the credit unions and the nonprofit and charitable sector in Ontario.1 This is consistent with ONN’s request to establish an intangible unclaimed properties fund for the province and could inform and lead in the structuring of the larger Unclaimed Property fund.

The Credit Unions are uniquely positioned to be local investors for their local members. Many already invest significantly in their local communities throughout Ontario. This is what many individuals want from their financial institutions- not just an institution that takes their deposits, but one that uses those funds to make a return AND help their local community thrive and prosper. It would make sense, therefore, to use unclaimed funds to seed community innovations. This investment fund would complement the Credit Union’s current investment

1 This is consistent with ONN’s request to the Ontario Government to establish an Ontario Reclaimed Assets

Program: http://theonn.ca/wp-­‐content/uploads/2015/02/ONN.Ontario-­‐Reclaimed-­‐Assets-­‐ Program.2015.02.03.pdf

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activities by providing early capital and by funding research and development activities in communities. There is currently a severe shortage of such funds for community renewal.

Unclaimed deposits 182. (1) If 10 years have elapsed since the day on which the last transaction by a depositor took place on the depositor’s account or a statement of account was last requested or acknowledged by the depositor, whichever is latest, the credit union shall pay the amount on deposit to the Minister. 2007, c. 7, Sched. 7, s. 102. To a FUND for a not-for-profit corporation named in the Regulations under this Act established and governed jointly by nominees of the public benefit sector in Ontario, and an equal number of nominees of credit unions, such nominees to be selected in the manner set out in the Regulations. The purpose it to provide responsive and higher risk grants and patient capital to the public benefit sector to support research and innovation.

Annual payments (1.1) Payments required under subsection (1) shall be made to the Minister FUND in accordance with the Minister’s directions, with the first payment under that subsection to be made on the day specified by the Minister and to include all amounts payable to the minister FUND on or before that day. 2009, c. 34, Sched. H, s. 2.

Obligation discharged (2) Payment to the Minister FUND discharges the credit union from all liability in respect of the amounts paid. 2007, c. 7, Sched. 7, s. 102.

Payment by the Minister FUND (3) The Minister FUND shall pay the amount received under subsection (1) to a person claiming to be entitled to it upon being furnished with satisfactory evidence of the person’s entitlement.

2007, c. 7, Sched. 7, s. 102.

Recommendation 3: We would like to request that insurance on non-registered deposits be increased from the current level of $100,000 to $250,000, to be more consistent with other jurisdictions. Increasing credit union deposit insurance limits would lead to more local money invested into the local economy. Further, insurance is financed by credit union premiums, so this change will not be an additional cost to the Government of Ontario.

Local money invested in local community is in the interests of all Ontarians. Strong and resilient communities generate local jobs and create local opportunities. The Credit Unions have traditionally played a very important role in communities and in their support of local nonprofit organizations. Increasing insurance levels will allow them to do more for their communities.

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