new generation co-operative railway in alberta.

In the spirit of sharing good conversations, I had the pleasure of sitting down for lunch yesterday afternoon with Justin Archer, Jerry Iwanus and his wife, Michelle.

As the Mayor of the Village of Bawlf, Jerry is a wealth of information about people, politics, and current events in east central Alberta. One of the interesting stories that Jerry shared with us was about a New Generation Co-operative railway that has been formed in that region. I am told that the Battle River Railway is the first of its kind in Alberta (there are similar Railway Co-operatives in Saskatchewan) and it is located on the former CN line from the Village of Alliance to the City of Camrose.

The Department of Agriculture and Rural Development provides a description of New Generation Co-operatives:

A cooperative is a legally incorporated business arrangement that provides for the control of the business by its membership. A new generation co-op (NGC) is a type of cooperative that uses a system of delivery rights and obligations to encourage business loyalty and provide a form of vertical integration. NGC’s are particularly suitable to ventures involved in value-added agricultural processing and marketing.

Based on a model first used in California, NGC’s emerged and flourished in the mid-western US in the 1990’s. Since that time, all three Canadian Prairie Provinces have introduced new laws or modified existing legislation to allow for NGC’s. Alberta's Cooperatives Act, (effective on April 2, 2002) defines NGC’s in sections 422 to 429.

There are some key attributes of NGC’s that are consistent with all co-ops:

• NGC’s are controlled by their membership using the principle of one member, one vote
• Earnings are distributed to the members based on patronage.
• The board of directors is elected by the membership.

However, there are several characteristics of NGC’s that differentiate them from traditional co-ops:

• NGC’s may issue designated shares which carry delivery rights and obligations.
• Individuals (members and non-members) may hold higher levels of equity through the purchase of investment shares.
• Membership may be restricted to designated share holders.
• In Alberta, NGC’s are applicable only to agricultural ventures, and the word "co-op" or "co-operative" does not necessarily have to appear in the name of the venture.

In general, New Generation Co-ops are typified by restricted, project-oriented enterprises which require significant investments from their members, and a membership which strives for increased profits and return on capital through this investment.

I have found that living in a large urban centre makes it is easy to be blinded by the big city lights and overlook the creative local business and community initiatives that are happening outside of the city limits (we are lucky that people like Jerry are around to remind us of that).

Here is a video interview with the Chairman of the Board of Directors Ken Eshpeter that was posted on YouTube: