Meaghen Kenney, M.A. Graduate, Dept. of Geography and Environmental Studies, Carleton University
Professor Ann Dale, School of Environment & Sustainability, Royal Roads University
Dr. Lenore Newman, Canada Research Chair in Food Security & the Environment, University of the Fraser Valley

Published April 25, 2016 

Case Summary

Currently, Canadian farmers continue to struggle with the trends and challenges associated with conventional agriculture embedded in a globalized food system.  These trends include globalization broadly, and the resulting effects of the cost-price squeeze, urbanization, changing rural demographics and environmental change (Caldwell and Temple, 2009; Ministère des Affaires Municipales et des Régions, 2006). 

Rurality in Quebec and in other areas of Canada is affected by these broad trends and economic liberalization, market globalization, as well as major shifts in socio-ecologies.  Locally, demographics play a significant role in the changing landscape of L’Ange Gardien and other Quebec municipalities, with significant decreases in small and medium scale farm production.  Demographics play a significant role in the changing rural characteristics and the rapid loss in farm production with factors such as migration, the ageing of farmers, and problems stemming from population renewal (MAMR 2006).

Sustainable Development Characteristics

Concern is growing locally and nationally in Canada about the resilience of local food systems. Food systems as a concept, is used to navigate the who, what, how and why in relation to the food we eat (Tansey and Worsley 2008).  The term food system implies that there is an interconnection or a network of actors (both human and non-human) that determines access and availability (or lack thereof) to food today (Kenny 2014).  According to Tansey and Worsley (2008, p.2), adopting a food system approach links three critical aspects of life—biological, economic and political, social and cultural^1.

Critical sustainable development questions are how then do we sustain the agricultural landscape, productivity vibrancy and resilience in the face of exogenous and endogenous pressures?  Just as plants need specific nutrients, so do the seeds of change.  This case study research on a rural Quebec incubator farm addresses the following questions.  What are the critical elements to establishing and nourishing rural revitalization programs?  What makes a program or project work in a community and can those key elements be replicated in other communities? 

Critical Success Factors

A key factor was enlightened political leadership from the mayor and linking sustainable and economic community development. The main objective of the incubator farm was to re-engage young people in farming thereby contributing to the vitality and greater resiliency of the region. One of the most surprising results from the data is the crucial relationship between access to financial and equally social capital. The relationships developed between the new entrepreneurs and older farmers was invaluable in knowledge transfer and confidence building in the younger farmers. Collectively, this social capital contributed to a sense of purpose (characterized by pride and shared socio-ecological values), to the success of this incubator farm. We suspect that the social capital aspects of, incubator projects, local food markets and food cooperatives is an under-studied, and requires further research. In our opinion, this model incubator farm could be successfully applied in other rural, smaller communities across the country. One of the young farmers has been selling local, organic food baskets to the cottagers in an adjacent community of Val-des-Monts and another is selling at the larger farmers market in Ottawa, Ontario.

To support the continued take-up of new entrepreneurial incubator farms, at La Plateforme Agricole, specifically, and rural revitalization, more broadly, we recommend the following actions.

• Assist in the preservation of farmland by providing the financial support to programs aimed at rural revitalization and farm succession
• Develop farm succession programs that aim at linking new and experienced farmers along more informal relationships, potentially leading to the farm purchases and maintaining farm productivity
• Provide access to micro-loans, grants for new farmers and for farmers at various stages of their farm careers, and
• Establish more incubator models throughout rural Quebec in proximity to economic centers for easy access to direct sale.

Community Contact Information
 
Professor Ann Dale
School of Environment & Sustainability
Royal Roads University
2005 Sooke Road
Victoria, British Columbia
ann.dale@royalroads.ca

What Worked?

The pride that the farmers take in the quality of their product, the socio-ecological relationships they build, and the values they uphold are representative of the characteristics of alternative agricultural food systems.  The participants are regaining control over their respective roles within the food system while building relationships of reciprocity amongst their fellow farmers, their customers, and a larger network of organizations with shared values.  La Plateforme Agricole has played an integral role in the relative successes of each farmer interviewed, providing the necessary space, social infrastructure, resources, and support. Ultimately, success of a farm incubator such as La Plateforme depends on the combination of a number of factors.

1. Enlightened local leadership and champions
2. A sound business plan/model and the resources and experience to execute the plan
3. Access to a diversity of grants and micro-loans
4. Proximity to large economic centers and established farmers markets
5. A co-ordinated network of organizations aimed at promoting and supporting rural character (the SRQ), and alterative agricultural productivity (Equiterre CSA network)
6. Open and transparent communication to overcome the challenges of social proximity
7. Diversity of socio-ecological relationships
8. Pride of place and product   

What Didn’t Work

It should be noted that farmers who did not have success at La Plateforme were not interviewed.  Outreach attempts to these farmers did not prove successful and were abandoned.  However, it can be gleaned from interviews that lack of income from farming often plays a role in a farmer leaving or not returning to the project.  

Research Method

In the case of L’Ange Gardien and the Outaouais region, the immediate problem is the decline in small and medium scale farm enterprises and how to support rural revitalization through innovation and entrepreneurship. This research used a case study approach to examine La Plateforme Agricole in L’Ange Gardien for several reasons.  Case studies involve an “intensive study of a single unit for the purpose of understanding a larger class of (similar) units” (Gerring, 2004, p. 342, Yin (2008). However, it is important not to conflate sample size with the quality of the research. Case study research is used to study the in-depth nuances and contextual influences of a single instance or a small number of instances.

Interviewees were selected by directly contacting members of La Plateforme and the mayor of L’Ange Gardien.  Subsequent recruiting was used snowball sampling, that is, when the same names kept emerging during interviews. Interviews were transcribed and analyzed using a grounded theory approach.  Categories of analysis were developed throughout the transcription and coding process, allowing the analysis to be grounded in the data and not a pre-conceived framework.  Key themes were identified by analyzing the frequency of particular themes and patterns in the interviews and, at times, the level of emotion expressed by participants regarding certain topics.

The seven participants for this research were diverse and varied in their relationships to La Plateforme and their farm enterprise.  The first interviewee was an employee of one of the farm enterprises, the second is the mayor of L’Ange Gardien, and the other four were individual farmers in the project, and the last was a full-time farmer with their own farm who had ‘graduated’ from La Plateforme.

Detailed Background Case Description

La Plateforme Agricole de L’Ange Gardien is an incubator farm site that offers ready to use certified organic agricultural land for rent to (Plateforme) new farm entrepreneurs who are interested in starting their own farm business.  It has 78 acres and supports 20 farming start-ups and provides shared equipment cooperatively. The project was initiated to address the challenges of a declining and aging farming population in rural Quebec municipalities – specifically, in L’Ange Gardien and the Outaoais region.  La Plateforme addresses the shortage of farmers by supporting young farmers focused on developing new agricultural enterprises and creating new investment in the Outaouais region (Solidarité Rurale du Québec [SRQ], 2013). 

La Plateforme Agricole is a partnership established in 2008 between the Centre Recherche et de Développement Technologique Agricole de l'Outaouais (CREDETAO) and the municipality of L’Ange Gardien.  The CREDETAO, a non-profit organization founded in 1993, focuses on applied research and technology adapting to the needs and reality of agribusiness in the Outaouais region.  Their agri-food incubator projects work with professionals in economic development and regional strategic planning with an emphasis on supporting new food businesses.  Since 1998 CREDETAO has assisted and supported more than eighty agricultural enterprises.  More recently their focus has been on the development of their agri-food incubator model supporting the foundation, expansion, and diversification of a range of agricultural enterprises.  The incubator model also promotes and supports farm transfer (transferring a farm to the next generation of farmers).  La Plateforme Agricole is one of the many projects organized by CREDETAO.             
La Plateforme Agricole has four main goals:

• to allow young farmers to start their business without having to go into debt to purchase a farm – effectively reducing the rural migration;
• maintain agricultural land use;
• to promote sustainable agricultural business models in the Outaouais region, and
• encourage safe and local food supplies (adapted from SRQ, 2013).

These goals are achieved through the organizational support of CREDETAO, the determination and innovation of Plateforme members, the financial backing from regional partners, the social support from the community and inspiration of municipality council members, the socio-economic context of Quebec, and the proximity of La Plateforme to both Ottawa and Outaouais local markets. 

Globalization of the agricultural sector has made it difficult for small- and medium-sized farms to compete with large-scale farms (Caldwell and Temple, 2009). In fact, the price of food is not increasing at the same rate as operating costs. Operating costs for conventional farm production have increased significantly with the price of fuel and oil-based inputs (notably, fertilizer and pesticides). Farmers are being forced to become more efficient and use modes of production that are ecologically unsustainable in the long term. Increasing petrochemical-based inputs, and relying on monoculture crops degrades soil, reduces biodiversity and decreases agricultural resilience (Weis, 2007; IAASTD, 2008; Holt-Gimenez and Kenfield, 2008; Busch, 2009). Larger farms have more potential to earn profits sufficient to cover their expenses.  As a coping strategy, many new and small-scale farmers have off-farm jobs to cover their expenses and ensure an adequate income (Caldwell and Temple 2009).  There has been a significant decrease in the total number of farms in Canada and that decrease is seen, mainly, in the small and medium size farms.  The number of large farms has actually increased in both numbers and in profits due to the large demands for agri-products such as grains and oilseed (ibid).  Specifically, in Quebec the number of farms with $500,000 or more or 2010 gross income receipts increased by 9.2% and those with less than $500,000 decreased by 5.9% (Statistics Canada, 2011).  Consistent with the global and national trends in agriculture, Quebec’s farms are growing fewer, larger in size, and less diverse.  Table 1 demonstrates the lack of diversity amongst the top 5 farm types in Quebec as of 2006.

Table 1. Top Five Farm Types in Quebec (Adapted from Statistics Canada 2006)

Another trend affecting both the availability and accessibility of prime agricultural land is the encroachment of low-density development due to proximity to urban centres (de la Salle and Fix 2009).  L’Ange Gardien is thirty minutes from the National Capital Region (NCR) of Ottawa and Quebec.  The encroachment of suburbia into rural areas is swallowing up prime farm land that has the potential to feed the NCR or at least supplement the NCR food supply with local produce.  Furthermore, due to the proximity of some rural areas, such as L’Ange Gardien, to major economic centers, the property value of land has increased prohibiting the purchase of farm land and enterprises by young farmers without going heavily into debt.  Those with the capital to purchase rural land in proximity to urban markets are those with full-time careers (outside of farming), developers, and retirees.  According to Statistics Canada’s 2011 National Household Survey, the top three trades in L’Ange Gardien were public administration, health care and social assistance, and retail.  The average age of people living in L’Ange Gardien is 40 with a large portion of the population over the age of 45 (Statistics Canada 2011) and the average age of farmers in Quebec is approximately 49.  Agricultural land that was once diverse with productivity is now being left to fallow or being sold to developers. Producing, processing, and selling local, organic food can contribute to the social, economic, and ecological revitalization of a rural community.

An ageing farmer population and a lack of diversity in farm products is threatening the vitality and sustainability of agricultural production in Quebec.  Even with the concern and demand for local and organic produce, new farmers do not have the capital to buy land, let alone start an agricultural business.  The Plateforme Agricole incubator farm provides a number of benefits for new farmers who are striving to carve out a place for themselves and their business in an industry dominated by large agri-business. The incubator model allows these farmers to work a plot of land, share equipment, receive mentoring on business planning and marketing, make mistakes and track successes – eventually, “graduating” from the incubator program with the revenue, resources, network and business plans to buy land, qualify for financing, and set-up their own farms.  The incubator model provides a number of benefits and challenges on the road to success (success being measured differently for each farmer) and for some farmers the challenges outweigh the benefits.

L’Ange Gardien has seen a significant decrease in the number of productive farms.  According to Mayor Robert Goulet, the decrease in agricultural productivity is a result of several factors: provincial laws and policies that are more conducive to large farm enterprises; its proximity to the National Capital Region (NCR) that offers more lucrative employment than small-scale farming; and retiring baby boomers buying up farm land and not farming.  However, unlike other retirees that move to the country, Robert took action as a municipal councilor member in an attempt to revitalize small-scale agriculture in L’Ange Gardien. 

One of the key advantages that helped in establishing La Plateforme is the political context of Quebec.  Quebec is well known for its social economy that includes credit unions, not-for-profits, and cooperatives that foster innovative solutions to local and provincial issues of economic decline and sustainability issues.  Three main organizations that played significant roles in the establishment of La Plateforme were the CREDETAO, the Association des Centres Locaux de Développement du Québec (CLD) (a not-for-profit dedicated to the development of the local economy and entrepeneurship), and the Municipality of L’Ange Gardien.  Furthermore, the Ministère des Affaires Municipales et des Régions du Quebec (MAMR) was in the midst of launching a three phase policy plan called Politique Nationale de la Ruralité (PNR), to stimulate and financially support rural development with a budget of $280 million with approximately $5.6 million going to Solidarité Rurale du Québec (SRQ) over seven years. The general purpose of the PNR is to

ensure the development of rural communities and the dynamic occupation of the territory by relying on their diversity and specific traits and the ability of rural areas to take the initiative. The policy adopts the RCM as the core territory from the standpoint of intervention, belonging and decision-making (MAMR, 2006 p. 8)

The PNR inspired and supported rural revitalization projects such as CREDETAO’s incubator model.  As a municipal councilor member and a member of Association des Centres Locaux de Développement du Québec (CLD), Robert was able to hear and push for proposals that would stimulate the agricultural revitalization in L’Ange Gardien.  In April 2009, L’Ange Gardien committed to financially and technically supporting the Plateforme Agricole project proposed by CREDETAO.  They confirmed their financial commitment with an overall budget of $500,000 over the course of seven years.  In 2009, the municipality selected and purchased the 78 acre site on River Road that would become La Plateforme Agricole.

Another key element to the success of La Plateforme Agricole is its geographical location that is both in proximity to large economic centers and rooted in a supportive rural community.  L’Ange Gardien is located in the Municipal Region of Les Collines de l'Outaouais, only a thirty minute drive from large city centers such as Gatineau and Ottawa.  Both cities have a diverse range of farmers markets and a growing consumer base for local, organic produce.  Simultaneously, La Plateforme is established on prime agricultural land that has been carefully tended by the previous land owner.  The previous farm owner still owns an adjacent plot of land and shares his advice and insights on the historical and geographical context of the land, as well as farming practices. 

Analysis

All the participants shared similar responses on the benefits and challenges of farming at La Plateforme, with some variations.  The two most significant benefits to farming at La Plateforme were access to financial capital and social capital. Ironically, the responses representing the most significant challenges were also associated with money, financial support, and social proximity. 

For many farmers money and financing is a challenge.  The cost to buy a farm, equipment, and resources often requires a new farmer to enter into debt for a significant amount of time, especially, since a farmer will not see a return on their investment (in terms of profit) for at least four to five years.  Revitalizing the rural agricultural landscape requires new innovations and a younger generation.  However, the start-up cost for buying land, equipment, and resources often prohibits young farmers from successfully starting a farm enterprise. The mayor of described the difficulties of revitalizing agriculture in smaller communities.

I am very excited by the fact that there are a lot of young fellows that are interested in farming and, funny enough, at the Plateforme, they are from the cities, they are people coming from the city that have an interest in farming and they studied in farming but they can’t afford to buy their own land, to buy their own farm because it is too expensive.  Particularly in the situation like ours and a lot of others around the city, speculation makes it cost a fortune to buy a piece of land here. These poor people can’t afford to do that unless they go into debt for the next 50 years making it totally impossible and the price of equipment is out of this world, you know, but they need to be encouraged and supported for our own sake, for our future, for our children and our grandchildren.

The Plateforme provides new farmers with the time and financial support to make mistakes, grow, and learn with minimal financial risk, with a ready made network to learn with and from. The farmer who graduated from the project one described the benefits as:

To have a Plateforme it's really useful because it allows the producer the future or potential producer to start with minimal financial risk. I mean the investment isroughly $1000, $2000, or $3000 to start with, and if it works fine than you can slowly increase.  For sure without the Plateforme I would have never bought a farm in Quebec. I would have rented land maybe but not just go and buy a farm that's impossible.

Buying a farm requires not just risk on the part of the farmer but also the investors. One interviewee who has been at La Plateforme for four years and will be entering his fifth and final season there in 2015 explained that the financial benefits of farming at the Plateforme allows a farmer to build up their revenue, establish a market, and demonstrate that they can move product over the years, thus making their farm enterprise more interesting for potential financial investors:

So when you get that farm revenue you can walk in [to a bank] and say look, I was at here at the Plateforme with rented land with minimal infrastructure it wasn’t set up the way I wanted and I was packing out $120,000 of vegetables a year. I mean that’s not big money but it’s interesting. For them it all of a sudden it goes from them thinking ‘oh here’s another couple of back-to-the-landers who want to I want to farm, saying farming is fun!’ Who want to have a little house and have a big garden and make kimchee which is all good if you want that go for it. But farm financing should be for farmers, it shouldn’t be for essentially recreational property.  This is the first year we’d get a serious audience. We could go in and say we want to buy a farm, we’ve found a farm here’s our books. And they will look at that and they will say look you have a track record of selling this product, you’re going to move to another farm, you’re gong to be selling to the same market in the same area and for them that is huge; your market is established they know you can grow the products they know you can move the product and that is the number one important thing to ….they want to know that you can do it.  They don’t want to bet on hope and dream. They want to bet on numbers.   And so you have a business history that really, really helps.  And I think the plateforme I think that’s the key thing with the plateforme, it lets you get those agriculture numbers up right at the beginning. You’re walking in without having to invest $300,000. I mean if you want to buy a $400,000 farm you need to have $100,000 cash. You’re not walking in with putting all of your money, $100,000, on the line that you’ve saved up over the years – putting all of that on the line and you don’t even know if it’s going to work.

For some farmers the major challenge is in making a livable income even with the minimal financial risk at La Plateforme.  Many of the farmers still need to have part-time, or in some cases, full time work in order to pay themselves and cover expenses.  Others are able to dedicate 100% of their time because their spouses have full-time work.

Also of financial and social significance is the ability to save money through knowledge sharing and having other farmers watching your field for pests and blight.  

Sometimes you need help with things and so it can be helpful in the way of advice or passing on information. For example there was a big problem with boron, the lack of boron in the broccoli, a micronutrient that causes your broccoli to turn all black and turn hollow and rot, it’s terrible. Literally thousands of dollars and the solution is a $50 bag that’s going to last me the next 25 years cause you put down grams per acre it’s that small and that important that nutrient and so I passed that information to other farmers because it is the same soil…It’s doing something about it preemptively so they’re not going to get stuck with $4000 worth of broccoli that they can’t sell cause that happened to me last year and it sucks.

Many of the young farmers have access to grants focused on revitalizing agriculture in Quebec.  However, these grants are mainly for new farmers under the age of 35 or 30.  The grants make a significant difference in the viability and vitality of many of the young farm enterprises.  Three of the participants stated that without the grants and micro-loans they received from the government of Quebec they would not have been able to start their farm business and cover living expenses.  Similarily, La Plateforme Agricole program, the municipality of L’Ange Gardien, and CREDETAO received a number of grants to purchase the land outright and to buy equipment and infrastructure.  Unfortunately, finding the financial support to continue running La Plateforme is challenging.  The government of Quebec is clawing back funding on rural revitalization programs. An official from Solidarité Rurale du Québec (an organization designed to promote the revitalization and development of rural areas, villages, and communities in order to reverse the decline and disintegration of rural Quebec), and Mayor Goulet who sits on the board of directors for CREDETAO, described the closing down of a significant funding program called Politique nationale de la ruralité/The National Rural Policy (PNR).  The policy was established in 2001 and was renewed in 2007 and 2014 for ten years, with a budget of close to $500M.  The policy was aimed at stimulating the vitality of rural communities by promoting local ownership of development through citizen engagement and empowerment for the use of resources.  PNR supported community development programs with a network of agents, rural pacts, and financial allocations.  Unfortunately, the Rural National Policy funding has been greatly reduced and the program is closing down (Solidarite Rural du Quebec 2014). The closing of programs and the end of funding to agricultural projects and local rural development may have significant consequences for rural revitalization.  Many young rural entrepreneurs and programs depend on the micro-loans, grants, and subsidies that were funded by the PNR.  The Plateforme Agricole does not make a profit off of the rent from its members; the money from rent goes into buying more equipment, resources and preparing plots for more future farm enterprises. 

Even with financial challenges, the Plateforme is still successful in helping young farmers meet their goals of graduating from the program and buying land of their own.  Since the start of the program the Plateforme has seen four members move on to buy their own land (two within the municipality of L’Ange Gardien) and others are preparing to buy within the next year. 

Working in close proximity to other farmers and sharing resources offers its own set of benefits and challenges.  However, all participants felt that the benefits outweighed the challenges.  All the farmers expressed the social benefits of having access to farm neighbours close for knowledge and resource sharing.  The social challenges were both spatial and temporal.  The spatial and resource challenges included: sharing resources during the busiest time of the season; competing for space in the greenhouses and the wash station; draining the water pressure on an already limited irrigation system; and having neighbours that don’t take control of weed pressure in their gardens.  Temporal social challenges were the most significant for some farmers with the mismanagement of fields over time by previous farmers. 

The problem was that they had a very high weed pressure from mismanagement in previous years either by previous members or people didn’t take care of it or left in the middle of the season and not tilling it under or mismanagement from the program.  Mismanagement usually means letting it go to weed so not cover cropping in an appropriate way.  If I had done some due diligence I would have known to stay away from the plot that we are farming now – like getting the full history of it from other farmers and maybe a bit more of a truthful history.

It took this interviewee the a good part of the growing season to learn that his fields were mismanaged over time by previous farmers and then took the rest of the season to prepare and fix his soil for the next season.  The time he lost in weeding and fixing his soil cost him in produce quality and quantity as well as time lost in marketing.  Other than the extreme challenge of dealing with the mismanaged fields, he did feel that the social proximity of the other farmers was beneficial and other challenges can be resolved with proper communication.

Some of the key social benefits from being in close proximity to other farmers included: sharing of knowledge and resources; splitting of costs, and engaging with diversity (in people, practice and produce). One interviewee described his number one benefit with the following:

The first big benefit is that you work with different people, with different information, different knowledge and you share that. If you have a problem, instead of calling somebody you just meet that person there and you can say ‘hey I have this problem do you have any way to fix it?’ If you're not there for a couple days and then you come back and say ‘hey I want to see your plot I have this weird thing can we take a look?’ There’s an informal way of getting information or acting on a problem and that's really interesting. Because we're close, and that's not common in farming, usually the farms are big and you're spread out. You won't have your neighbor nosing around your plot. It's great for that because it's a way to learn around it.

Another interviewee stated that knowledge sharing was an important part of his experience at the Plateforme made possible by the social proximity of other farmers:

By working alongside other farmers that have all sorts of different experience ranging from one or two years up to 8 years of experience in vegetable farming you learn a lot just from everyday interaction or if you have a question there are four different people you can ask especially in vegetable production.  So there’s a lot of knowledge sharing and essentially the Plateforme really allows you to develop your knowledge of vegetable production through the different pest and weed pressure that arises.  There’s always an opportunity to be chatting with people when you’re washing produce because there’s a lot of communal areas as well. When you’re working in the greenhouse with the plants you might be working alongside someone, when you’re out washing vegetables there’s always other people washing and packing there’s a lot of opportunity to do some knowledge sharing that’s a huge strength.

Another interviewee shared their social experience as an employee of a farm enterprise with a particular focus on diversity.

There is a diversity of producers.  Not all are doing the same thing.  There is less competition, and a great opportunity to learn and see other things. Something that is nice to see is how they start out – everyone uses their land differently and the amount of land they use is different. Everyone does different vegetables depending on how much time and land they have.  It’s a good learning opportunity for everyone.

Another young farmer described the social benefit of having neighbours to share in time and labour:

[the benefits are] not only money-wise but time-wise.  Often we can scratch each others backs. Sharing in watering duties, might save some time.  It works well because you help each other to some degree. The Plateforme connects you with your neighbours, weeds out the middle man, and brings community back.

Many of the farmers prioritized the social benefits over the financial benefits claiming it to be a significant factor in learning and preparing for the next step of farm ownership.  The social and financial benefits are intercropped together growing social capital built on relationships of reciprocity, knowledge, and resource sharing.  Expanding on the social capital are the bridges built between the members of La Plateforme Agricole and the supporting organizations such as Ecocert, CREDETAO, Solidarite Rural du Quebec, the farmers markets, Equiterre (an organization that established and runs the network of family farms and home or hub delivers organic vegetable baskets to registered members), and the municipality of L’Ange Gardien.  There is a strong network of support and collaboration between these organizations that align on values of rural revitalization and community socio-ecological resilience. 

Discussion

There are multiple layers and definitions contributing to the scholarly literature on social capital.  Dale (2001, pp 179-180) provides the following comprehensive definition of social capital, incorporating perspectives from various leading authors.

The shared knowledge, understandings, and patterns of interaction that people bring to any productive activity (Coleman 1988; Putnam 1993).  It also refers to the organizations, structures, and social relations that people build up independently of the state or large corporations (Roseland 1999).  It contributes to stronger community fabric and, often as a by-product of other activities, builds bonds of information, trust, and interpersonal solidarity (Coleman 1990).  It also emcompassessuch features of social organization as networks, norms, and trust – features that increase a society’s productive potential (Putnam 1993).

Onyx (2005, p. 3) describes social capital as located within the “social structures, space between people not within the individual…social capital stands for the ability of actors (both group and individual) to secure benefits by virtue of memebership in social networks or other social structures.”  These relationships are critical for human reconciliation of the economic, social and ecological imperatives because in order to realize the changes necessary for sustainable development, collective mobilization of people in communities is required (Dale, 2005). 

La Plateforme draws and builds upon a diverse social infrastructure that includes relationships of reciprocity between farmers, non-governmental organizations, governmental organizations, and consumers.  This social infrastructure is built upon a common ground aimed at fostering ecological integrity, economic development, and social change within the agricultural sector.  One of the most notable successes of La Plateforme came from the farmer who had graduated from the project, who is considering inviting small-scale farmers to his own farm as an informal incubator farm. 

Plateforme project was a really nice package that came with everything I think it's possible to have the same kind of output with a lot less input meaning money from the government. I think it can be done at a community level on a smaller scale. I think farmers could do it by inviting some people to settle in for a couple years if they want to. I think it something that should be discussed and presented and maybe an almost retired farmer in a way to get a potential buyer in a couple years…just open the farm and invite 4 small-scale producers and one of those 4 might just buy the land in 5 years right? I think it's a nice avenue to look at for transition….I think it's an interesting way to work with people and to get all the advantage of the Plateforme in my farm because right now I don't have a neighbor I don't have somebody to talk to I don't have someone in my plot and giving me advice - even if its somebody with less experience or less agriculture knowledge that doesn't matter because it's still somebody that’s interested in agriculture knowledge.

Diversity and Resilience

Resilience is based on the principles of ecosystem health, inter-dependent with diversity in both the human and non-human realms.  A resilient ecosystem can withstand shocks and rebuild itself when necessary.  Similarily, resilience in social systems has the added capacity of humans to anticipate and plan for the future (Resilience Alliance 2014).  Both biodiversity and social diversity play crucial roles in the resilience of a socio-ecological system.  A diverse socio-ecological system is more resilient to environmental, economic, and social stresses or events.  La Plateforme can be seen as a combination of diverse ecological, social, and intellectual capitals.  Diversity among the members of the Plateforme is one of the key elements to the success of the program.  When asked what is the main contributor to the success of the Plateforme, Mayor Goulet exclaimed that it is the involvment of the all stakeholders and innovators, from the director of the municipality, the selection committee, the members of CREDETAO, and the members of the Plateforme.  The social system of the Plateforme is resilient insofar as it has a diverse range of stakeholders that have a shared interest in re-establishing farming built on values that are less intrusive and more sustainable than large-scale conventional farming.

Alternatively, resilience is lost or degraded by a wide range of factors including the loss of biodiversity; toxic pollution; inflexible, closed institutions, perverse subsidies that encourage unsustainable use of resources, and a focus on production and increased efficiencies that leads to a loss of redundancy (Resiliance Alliance, 2014). These factors comprise most of the socio-ecological problems that are characteristic of conventional large-scale agri-business.  Adopting a certified organic approach to farming at La Plateforme creates a healthy and diverse socio-ecolgical system that is more resilient to stresses.  Alternative agriculture systems such as small-scale, permaculture, and organic farming, that practice high levels of diversity, productivity and efficiency may likely be the only system that will be able to confront future challenges of environmental and economic instability (Alteiri 2012).

One farmer spoke to the importance of diversity in being able to adapt to environmental stresses such as pests and blight.  He argued that selling wholesale by producing larger quantities of lesser varieties of vegetables is extremely risky because organic producers do not use the same chemical inputs that conventional farms do:

it doesn’t work for me…you have to do so much volume and have a system that is much more mechanized than our farm can handle to do that volume and sales, crop quality and then organically its very hard to do that because all you need is to have one very bad thing to happen, a giant plague comes in and you don’t have the big guns to kill it. You can’t say I don’t know what that bug is but I’m going to spray it with that stuff…I mean you have to be careful. We hedge our bets on diversity and grow 40 different crops and they don’t always all do well but your hedging your bets. It’s like a mutual fund your not investing in one company you’re investing in a bunch and that’s what you do when you diversify your crop rotation. You’re putting the ball in your court and hoping that you have lots of options there for selling products.

All the interviewees clearly valued their production and the organic principles they practiced.  Even though some participants were struggling financially to make a living wage they all expressed pride in their work, values, and product. 

Sense of Pride and Place

Many of the participants expressed a sense of pride in their products and their work, claiming it was a necessary element for success.  Their sense of pride is based on the sacrifices they perceive, the commitment to organic values, the quality of the products and the contribution they make to community sustainability.  The pride in their work is grounded in place, giving customers a sense of where their food comes from, and setting food apart from the limited and standardized products of conventional agriculture.  In a similar study by Ross (2007), quality of product was identified as one of the key elements to success in small-scale farmers engaged in direct sales (farmer markets and community shared agriculture).  All of the farmers interviewed by Ross saw that excellence of product as a necessity.  According to Ross (2007 p. 7), quality is based on “producers’ personal standards regarding the sensory characteristics of the product and the nature of production practices.  It requires personal attention to, and supervision of, all aspects of production.”  All the interviewees had varying perspectives on organic production and the value of certification.  However, they all confirmed that with or without certification, they would not change their production methods, whether it is for health and safety of labourers, consumers, or environment.  All participants concurred that they were proud of the quality of product that they had to offer through the adherence to organic principles.  The participants were all proud to, not only offer a product of quality, but to build relationships of regard and trust with the consumers and with their neighbouring farmers.

Being there was like being part of something that people were proud of and that's really valuable. You need to be proud of what you're doing. That's the first obstacle that you have to stop.  So it's more than just money.

Strategic Questions

1. Do you think that this case study can be successfully replicated in other rural communities, or is it place dependent?
2. What other critical success factors do you think were important?
3. How important is local, smaller scale farming to community vitality?
4. Are there network marketing strategies that could work to scale up operations?

[MAMR] Quebec, Ministère des Affaires Municipales et des Régions. (2006). Politique nationale ruralité québec: Une force pour tout le Quebec. Retrieved from http://cld.iledorleans.com/stock/fra/politique-nationale-de-la-ruralite.pdf

1. Biological: the living processes used to produce food and their ecological sustainability. Economic and political: the power and control that different groups exert over the different parts of the system. Social and cultural: the personal relations, community values and cultural traditions that affect people’s use of food.

Susan Farquharson, Executive Director, Atlantic Canada Fish Farmers Association
Professor Ann Dale, School of Environment & Sustainability, Royal Roads University
Published March 31, 2016

Case Summary
The implementation of Integrated Community Sustainability Plans (ICSPs) has varied tremendously across the country. Many have been implemented directly by individual communities, while other provinces, notably British Columbia and New Brunswick have adopted a provincial coordinating role for the distribution of the federal gas tax funds. This case study explores what worked and didn’t work in the province of New Brunswick.

Municipal planning processes in New Brunswick are mandated by provincial policies with a focus on infrastructure. Even without the flexibility to plan individually, however, local governments in New Brunswick to varying degrees have incorporated the imperatives of sustainability within their planning processes. These processes may not be as formal as an Integrated Community Sustainability Plan would advocate, signifying a more relevant solution to advancing municipal sustainability might be a sustainability planning framework that creates the capacity for local ownership and management. Removing the hierarchical governance barriers currently limiting the implementation of municipal sustainability planning in New Brunswick is a critical first step.

Sustainable Development Characteristics
More than 30 years after the Brundtland Commission the implementation of sustainable development locally remains challenging for some communities, as seen in the New Brunswick case studies. Evaluating sustainable development at a municipal scale remains a challenge in most if not all regions of the world (Sustainable Cities International, 2012). This may be due to the problems associated with developing a common set of indicators that can be adopted and integrated into vertical and horizontal scales of policy that recognizes local complexities and the “needs of citizens” (2012, p. 4) in each municipality. There is also the challenge of determining data relevance, at these policy scales, for each community (Dale, Foon, & Herbert, 2011, p. 2).

Local government bodies, such as cities and municipalities, have the opportunity to provide leadership and advance sustainable development. Ling, Hanna, and Dale (2009) suggest that municipalities are the leaders, on the “front line of implementing sustainable community development” (p. 1) giving them the local capacity to drive sustainability. This places municipalities in the position to create “resilient and adaptable communities” (Dale, Foon, & Herbert, 2011, p. 7) on a case-by-case basis that defines sustainable development meeting individual community needs.

This case study explores the complexities of municipal planning processes and the attempts of four New Brunswick local governments to integrate the requirements of the Federal Government’s Gas Tax Funding Program initiated in 2005. It specifically explores the role that the first decade of the Gas Tax Funding Program (2005-2014) played in New Brunswick.

Previous research has demonstrated that to realize sustainable community development, municipal plans must be:

1. integrated;
2. long-term rather than short-term;
3. implementation is dependent upon a community engagement process;
4. measurable, and
5. political accountability built into the plan’s life cycle.

In response to inquiries from small communities in B.C. when the Federal Government Tax Rebate Program was announced, an ICSP template was developed for local governments and their communities.

Community Contact Information
Professor Ann Dale
Trudeau Fellow Alumna (2004)
Canada Research Chair (2004-2014)
Royal Roads University
School of Environment & Sustainability
Faculty of Applied Social Sciences
2005 Sooke Road, Victoria, B.C. V9B5Y2
Tel: 250. 391-2600, x4117
rrutesting.com

What Worked
Although legislation was viewed as a barrier to municipal sustainability planning, there was generally support for the new asset management planning requirement to access the GTFP funds as “infrastructure in New Brunswick is old and in need of repair”, as noted by one interviewee. But, information also suggested that the gas tax funding distribution with only an infrastructure focus does not lead to integrated sustainability planning, emphasized by one interviewee stating that “it is not pipes in the ground, it is quality of life for people” which requires “flexibility to use it for non-infrastructure needs.”

What Didn’t Work
Even though municipalities are, on a case-by-case basis, attempting to incorporate sustainable development in their planning processes, they remain largely unintegrated in overall planning processes for each of the case study communities reviewed. One reason may be that the benefits of long-term collaborative participation and commitment of citizens and institutions to sustainable development planning processes through policy change, active engagement and allocation of resources needed to incentivize communities has yet to be recognized (Braun, 2007). Another reason may be that consultants were used to conduct both the regional plans in 2007 – 2009, incorporating sustainability as well as the ICSPs. Consultants are employed to achieve a plan within a set time and budget, which mitigates against the need for the time and resources required for meaningful community engagement and long-term commitment of citizens.

Still viewed as a challenge and a barrier, community engagement is seen as taking too long, too expensive with too many diverse perspectives and subsequent actions to be incorporated by those charged with developing and implementing final plans. Additionally, municipalities that do want to conduct more integrated local planning find their efforts once again strangled by outdated policies that require provincial oversight and permissions to complete, if started. This is evident even in the newly updated Municipalities Act (R.S.N.B, 2015) that still advocates provincial control over municipalities. Additionally, there is still a one-size fits all municipal plan outline developed at the province level, to which each municipality must adhere with little flexibility to meet local unique contexts.

More recently, the province implemented the Capital Investment Plan (CIP), an additional requirement of the Province and condition for receiving Gas Tax Funding. This research demonstrated that if municipal planning processes are dictated at the provincial level and this centralized control over planning processes continues, local sustainability planning and integration will not effectively occur. This runs counter to the increasing emphasis over the last decade on the criticality of place-based decision-making, which coupled with the province’s inflexible co-ordination has led to varying degrees and success in implementing ICSPs locally.

Detailed Background Case Description
In 2005, Canadian municipalities received an incentive to develop Integrated Community Sustainable Plans (ICSPs) when the Canadian Federal Government introduced the Gas Tax Funding Program (GTFP) (Canada-New Brunswick, 2005). As a Federal – Municipal Government policy instrument, the GTFP supported municipal level sustainability planning in the development of healthy and vibrant communities through the integration of economic, environmental, social and cultural sustainability objectives (Canada - New Brunswick, 2005).

The Gas Tax Funding Program required every municipality that received funds to develop an ICSP or similar document by March 2010 (Government of Canada, 2014). Additionally, recognizing the importance of public participation and a broader multi-stakeholder approach (Dale, Dushenko, & Robinson, 2012, p. 86), (Rametsteiner, Pulzl, Alkan-Olsson, & Frederiksen, 2011, p. 69), the GTFP required any plans developed to include public participation maximizing the benefits of setting and achieving sustainability objectives (Canada-New Brunswick, 2005).

The Province of New Brunswick signed a ten-year agreement 2005-2015 (Canada-New Brunswick, 2005) with the Government of Canada outlining the terms and conditions for accessing the Gas Tax Funding Program. Schedule H of that agreement described the requirement for Integrated Community Sustainability Plans (ICSP) noting them as “supporting the development of sustainable healthy and vibrant communities” (2005, p. 40). An additional clause in the agreement noted that in New Brunswick, ICSPs would be incorporated in existing planning processes such as Community Growth Strategies of each Community Economic Development Agency (p. 40).

The Gas Tax Funding Program
After years of lobbying by municipalities across Canada, the Gas Tax Funding Program (GTFP) was established in 2005. Administered by Infrastructure Canada, it currently provides two billion annually to provinces and territories responsible for allocating the funds to Canadian municipalities to help build and revitalize their public infrastructure assets (Government of Canada, 2014). To do so, incorporated areas develop projects locally and “prioritize them according to their needs” (Canada-New Brunswick, 2005, p. 2). The Government of Canada (2013) reported over 3,600 municipalities and 13,000 projects across Canada had benefited from the financial support and flexibility of the program since its inception in 2005. On April 1, 2009, the Government doubled Gas Tax Fund payments from $1 billion to $2 billion per year for Canada’s municipalities (Government of Canada, 2009). On December 15, 2011, federal legislation made the payments under the GTFP a permanent source of federal infrastructure support (Government of Canada, 2013, p. 173).

As the result of a program review (Government of Canada, 2009), municipalities are no longer required to develop an Integrated Community Sustainability Plan. Currently administrative agreements to access the GTF are developed based on the submission and approval of a provincially specified five-year Capital Asset Plan template outlining the priorities of the municipality. Each five-year plan must meet objectives set by the province including making progress on “improving Local Government planning and asset management” processes (Province of New Brunswick, 2015).

Integrated Community Sustainability Plans (ICSP)
The ICSP planning process was initiated across Canada as a requirement of the federal government when introducing the first round of Gas Tax Funding Program in 2005 (Canada-New Brunswick, 2005). Introduced to encourage communities to plan and develop action plans, the ICSP was a requirement of bilateral agreements between the Government of Canada and each province for Gas Tax Funding transfers.

To meet this requirement and receive transfers summarized in Figure 1, the Province of New Brunswick developed agreements with Community Economic Development Agencies to develop “Community Growth Strategies” that incorporated the principles of Integrated Community Sustainability Plans (Capital Management Engineering Limited, 2010, p. 13). Even though the Province funded these regional strategies, municipalities could still conduct an Integrated Community Sustainability Plan process, if they chose to find their own funds.

Figure 1: Canada’s Total Gas Tax Contribution to New Brunswick 2005-2010
Note: Adapted from Agreement on the Transfer of Federal Gas Tax Revenues Under the New Deal for Cities and Communities, Schedule H – Integrated Community Sustainability Plans, p. 11 by Government of Canada and the Province of New Brunswick, 2005

In New Brunswick, the Gas Tax Funding allocations to the incorporated areas (e.g., villages, cities, rural communities) are determined on a per capita basis. Currently, as per the 2014 Canada New Brunswick Gas Tax Transfer agreement (Canada-New Brunswick, 2015), the allocations to municipalities described in Table 3 are dependent on the completion of a Capital Investment Plan (CIP). The template and requirements for the CIP are posted by the Department of Environment and Local Government staff on the provincial website (Province of New Brunswick, 2015). Once a plan has been submitted, evaluated and accepted by the Province an agreement contract is finalized with the Department of Environment and Local Government (Ibid, 2015).

The Minister of Environment and Local Government controls the allocation of Gas Tax Funds for the unincorporated areas (e.g., Local Service Districts) as defined in Table 3. This portion of the Gas Tax Fund is distributed on a regional basis and not a per capita basis. The province identifies regions that encompass the unincorporated areas of the province and funds are distributed within those regional boundaries on a project-by-project basis.

Table 3: New Brunswick Gas Tax Allocations 2014-2018
(Province of New Brunswick, 2014)

Provincial Backdrop
In 1962, as a result of the New Brunswick Commission on Finances and Municipal Taxation’s assessment of municipal government (referred to as the Byrne Commission) (Province of New Brunswick, 2015) the province legislated a new Municipalities Act. This centralization, seen at the time to address the need for sustainable community development and provide equitable access to basic needs such as health and education, fundamentally changed the structure of rural administration in New Brunswick by abolishing the “County Councils” (2015) and establishing a new system under the authority of the Provincial Government.

In May 2007p the province commenced a series of pilot projects intended to promote sustainable community development as part of the New Brunswick Public Engagement Initiative and the agenda for achieving self-sufficiency by 2026 (Province of New Brunswick, 2008). Due in part to the results of those pilot projects, a New Brunswick Self-Sufficiency Task Force (The Self-Sufficiency Task Force, 2007, p. 36) suggested that the Government move quickly to implement the recommendations, that sent a message recognizing the need for transformative change, reinforced with the core imperatives of sustainable development. Contrary to the 1962 centralization of services, the messages received during the consultations suggested that decentralization and support of small communities was more sustainable. A key recommendation called for a comprehensive regional planning process for all areas of the province highlighting the environment, sustainable development, land use, housing infrastructure, and social and economic development. Coincidently, at the same time the Canadian Commission for UNESCO recommended new methods for engaging citizens as integral to any planning process. (Council of Ministers of Education-Canada, 2007).

In 2010, more than 30 groups across New Brunswick collaborated, without provincial or municipal government involvement, to develop the Green Print: Towards a Sustainable New Brunswick (New Brunswick Environmental Network, 2010). This was an action plan that contained goals and “green metres” to measure the progress of sustainability implementation by governments and others.

In 2012, provincial government literature described sustainable development as a “community that meets its present and future social, economic and environmental needs” with a tag line of “enough for everyone forever” (Province of New Brunswick, 2015, p. 2). This aligned with the Brundtland Commission’s original definition that sustainable development is meeting the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland Commission, 1987). The provincial literature promoted planning processes and provided example table of contents for Integrated Community Sustainability Plans or Green Plans that indicated support for, but did not require, municipalities to plan and/or include sustainability principles of social equity, economic viability and environmental quality (2015, p. 3).

In 2012, Margaret Tusz-King (2012) reinforced, in her report “Local Government, Sustainability and Climate change: A Resource for Elected Municipal Officials in New Brunswick, the importance of local government as those closest to the people. As she reflected on climate change impacts, she noted that due to their community planning, emergency measures, provision of clean water and ability to understand the issues they were in the best position to govern the wellbeing of each community

More recently provincial planning staff have been promoting sustainable planning in a “Provincial Framework and Principles; Creating Sustainable Communities in NB” presentation (Province of New Brunswick, 2014) at conferences and workshops. Finally, communications accessed on the Government of New Brunswick website (Province of New Brunswick, 2015) reflect an enthusiastic promotion of citizen-based sustainability planning offering a toolkit that included an indicators fact sheet and referred users to one of the case studies used in this research, the City of Saint John.

The Government of New Brunswick has not required municipalities to develop an Integrated Community Sustainability Plan (ICSP) or a similar document as suggested in the Canada – New Brunswick Gas Tax Funding 2005-2014 agreement (Canada-New Brunswick, 2015) to access funds. As a substitute, the province used a portion of the Gas Tax Fund to employ consultants to work with the 15 Community Economic Development Agencies (CEDA) operating regionally in the province in 2006 (Province of New Brunswick, 2015). Consultants were tasked with incorporating sustainability principles in regional plans that encompassed unincorporated as well as incorporated (i.e., municipalities) areas.

Even though not a requirement to access Gas Tax Funding by the province, a number of municipalities have voluntarily completed an ICSP, see Table 1. As previously mentioned, each municipality had to find their own funds to conduct the ICSP planning process as resources to do so were not specifically allocated by the province in the Gas Tax Funding transfers to municipalities (Province of New Brunswick, 2015).

Table 1: List of Integrated Community Sustainability Plans and Green Plans in New Brunswick (Province of New Brunswick, 2015)

Municipal Legislation
Canadian municipal legislation originates from legislation enacted in Upper Canada in 1849 (The Law Society of Upper Canada, 2015). That legislation, known as the Baldwin Act (2015), established the role, function and structure of local authorities in the British North American colonies. In 1867, the Canadian Constitution Act (SC, 1867) created provincial governments granting them responsibility for making rules related to municipal institutions. At that time, less than 20 per cent of citizens lived in municipal areas compared to the approximately 80 per cent today (Lidstone, D., 2004).

Section 92(8) of the Constitution Act delegates powers to the provinces respecting “municipal institutions in the province” (SC, 1867). Municipal authority to regulate use of land is a provincial power under the "property and civil rights" heading in Section 92(13) of the Constitution Act (SC, 1867). That delegation of land use planning to local governments is subject to powers retained by the provinces. Consequently, the laws controlling land use are primarily provincial, although there are exceptions created by federal control over land used for First Nation reserves, airports, railways, harbours and other purposes regulated by federal law (SC, 1867). New Brunswick has delegated minimal powers to local governments to control local matters but not concerning planning which remains in the control of the provincial government (R.S.N.B, 2015).

In 2011, the Province implemented the Regional Services Delivery Act (RSDA), proclaiming a new system of local governance in New Brunswick (Regional service delivery act; C- 37, 2012). Subsequently in 2012, there were 12 Regional Service Commissions (RSC) (Province of New Brunswick, 2015) created (See Map in Appendix 4). This replaced the District Planning Commissions (DPC) system that had been operating in the Province serving 98% of the land area of the Province and 69% of the citizens including all the unincorporated areas and 67 of the 101 municipalities (Bell, J., 2011). .

The 12 Commissions have five main objectives including strengthening the capacity of local governments while maintaining their community identity, increased collaboration, communication and planning between communities, and modernized legislation supporting local and regional decision-making (Province of New Brunswick, 2011). Their mandate includes regional planning, local planning in unincorporated areas, solid waste management, regional policing collaboration, regional sport, recreational and cultural infrastructure planning and cost sharing, as well as regional emergency measures planning (2011).

The Commissions, comprised of incorporated as well as unincorporated areas, were charged with ensuring communities receive services but were not assigned the legislated authority to tax for said services, in the Regional Services Delivery Act (R.S.N.B., 2012). The municipal members of the Commission have retained the authority to tax and continue to do so within their legislated boundaries (Telegraph Journal, 2014) to provide the services they are responsible for and given authority to manage in the Municipalities Act (R.S.N.B, 2015).

As a result, in New Brunswick there are three legislations directing municipal planning activities, the Municipalities Act (R.S.N.B, 2015), the Community Planning Act (R.S.N.B., 1973) and the Regional Services Delivery Act (R.S.N.B., 2012). Interestingly, the use of the term sustainable development, or some variation of, is not included in any of these policies.

Case Study Community Descriptions
City of Saint John
Located on the southern New Brunswick coast, Saint John is the largest city in New Brunswick. Incorporated in 1785, the city has a census metropolitan area (CMA) population of 127, 761 with 70,063 living within the city core (Statistics Canada, 2011). The population density per square kilometre is 38 on a total land area of 3,362.95 square kilometers.

Saint John has a median family income of $68,520 (Saint John, 2015). The primary occupations employing 56.6% of the labour force, are the sales and services, trades, transport and equipment operators, and business and finance sectors. Employment in the education, law and social, community and government and health sectors employ less than 20% of the labour force, and work in the natural resource sectors providing the lowest employment, approximately 2%.

Promoted as a ‘historically-rich and culturally diverse city’ (Saint John, 2015), in 2012 the city was named a Top 7 Intelligent Community by the Intelligent Community Forum (ICF) (Intelligent Community Forum, 2015), an international think-tank that studies the economic and social development of the 21st Century community. In 2010, the city was designated as a ‘Cultural Capital of Canada’ and in 2011 was named the winner of CBC Maritime's “Cultureville” contest. Contrasting these recent accolades, Saint John was most recently presented in the media as having one of the highest child poverty rates in Canada (Telegraph Journal , 2014).

Community services available in the city include a multi-modal public transportation system (i.e., bus, taxi), an international airport, two hospitals, a university and community college, and three recreational facilities (i.e. YM/WCA, Harbour Station, and Canada Games Aquatic Centre) as well as two municipal parks. Additionally, a multicultural centre is accessible providing integration services for immigrants.

City of Moncton
The City of Moncton known as the hub of the Maritimes (City of Moncton, 2015) has a census metropolitan area (CMA) population of 138,644 with 69,074 living within the city core (Statistics Canada, 2011). The population density per square kilometre is 489.3 within a land area of 2,406.31 square kilometers.

Moncton has a median family income of $71,290 (City of Moncton, 2015). The primary occupations, employing 58% of the labour force, are the sales and services, trades, transport and equipment operators, and business and finance sectors. Employment in the education, law and social, community and government and health sectors comprises 19.5% of the labour force, and work in the natural resource sectors providing the lowest employment >1%.

In 2009, Moncton was named a Top 7 Intelligent Community by the Intelligent Community Forum (ICF) (Intelligent Community Forum, 2015) . In 2008, Moncton was designated the ‘most polite and honest city’ by Readers Digest (Moncton, 2015). In 2014, the city was ranked as the lowest cost location for business in Canada (Moncton, 2015) by KPMG.

Community services available in the city include a multi-modal public transportation system (bus, taxi, and train), an international airport, two hospitals, two universities and two community colleges, and a downtown multi-use sports and entertainment centre in early development phase. Additionally, the city has developed an immigration strategy (City of Moncton, 2015) providing integration services for newcomers.

Town of St. Andrews
The Town of Saint Andrews was designated as a National Historic Site in 1998 (St. Croix Estuary Project Inc ~ Eastern Charlotte Waterways Inc., 2014, p. 23). With a population of 1,889 and a population density per square kilometre of 226.2 on a total land area of 8.35 square kilometers (Statistics Canada, 2011), it has a much higher density than the county average, in which the town is geographically located, 7.8 (2011). There is a significant seasonal flux in population due to the large number of residences owned by non-residents, as well as the students who take up residence during the academic year at the college, and who do not stay during the summer months (pers.comm, 2015).

St. Andrews has a median family income of $27,294 (Statistics Canada, 2011) The primary occupations, employing 55.6% of the labour force, are management, sales and service, trades, transport and equipment operators, and education, law and social, community and government services sectors. Employment in the arts, culture, recreation sport and health sectors employ less than 10% of the labour force, and work in the natural resource sectors providing the lowest employment >1%.

Community services available in the town include two primary schools, a community college, a recreational facility, as well as the Huntsman Marine Science Center, the Fisheries and Oceans - St. Andrews Biological Station, and the historic Algonquin Resort facilities (Town of St. Andrews, 2015). A regional multicultural centre located in an adjacent municipality serves the town (Charlotte County Multicultural Association, 2015). Additionally, the town is leading the development of a multi-modal transportation system to integrate bus- dial-a-ride- taxi systems, to connect the various county communities with essential services that are being increasingly centralized to larger municipalities (Hanson, 2014).

Village of Grand Manan
The Village of Grand Manan is an island community, located in the lower Bay of Fundy, accessible only by boat (two ferries service the island) and air. It was incorporated in 1995, as a single village, as a result of an island wide amalgamation of several small communities, most notably Seal Cove, that was designated a National Historic Site remaining relatively unchanged since the 19th century (St. Croix Estuary Project Inc ~ Eastern Charlotte Waterways Inc., 2014, p. 40). The island is 24 kilometres long and 11 kilometres wide (Village of Grand Manan, 2015) with a population of 2,377 and a population density per square kilometre of 15.8 within a land area 150.86 square kilometers (Statistics Canada, 2011).

Grand Manan has a median family income of $49,147 (Statistics Canada, 2011). The primary occupations, employing 62.1% of the labour force, are the natural resources, agriculture and related production sector, and the sales and services, trades, transport and equipment operators and related occupations. Employment in the education, law and social, community and government, and management sectors as well as the business, finance and administration sectors employ 25% of the labour force, and work in the health sector employing 5.9%.

Community services include a transportation system, ferry and airport (providing transportation to mainland areas), one hospital, a LEED certified community and recreational facility, and two privately operated parks.

Analysis
Provincial agreements with municipalities, requested during interviews with provincial staff, for the transference of Gas Tax Funding were not considered public and not accessible from the province for this research.

All case study communities had filed a current municipal plan with the Province in accordance with the Community Planning Act (R.S.N.B., 1973) at the time of this research, while only Saint John and Moncton had completed an ICSP (Province of New Brunswick, 2015).

The City of Moncton’s ICSP, Shaping Our Future: City of Moncton Sustainability Plan (An Integrated Sustainability Plan) (Dillon Consulting Limited, 2011) incorporated five community objectives (i.e., green, healthy, vibrant, prosperous and engaged), 24 goals and more than 75 indicators developed with environment as the “central pillar of sustainability” (2011, p. 2).

The City of Saint John’s Integrated Community Sustainability Plan (Dillon Consulting Limited, 2008) unlike Moncton’s, noted that sustainability was “about more than protecting the environment” (2008, p. 5) and incorporated “20-year goals and sustainability principles” under six elements of sustainability: social, cultural, economic, environment, infrastructure and governance (p. 7).

The same consultant developed both plans incorporating a community consultation process, which included online surveys and public meetings, as well as in the case of Saint John, two stakeholder workshops to develop objectives, actions, indicators and targets.

The Town of St. Andrews conducted a background analysis (Resource and Educational Consultants, 2009), which included a community consultation process before completing their municipal plan in 2010, with a purpose of providing policies and proposals to guide and control the economic, social and physical development of the town (Town of St. Andrews, 2010).

Grand Manan, the newest municipality incorporated in 1995, filed a Rural Plan in 2004 listing objectives to “balance development pressures, environmental integrity, and community identity” (Village of Grand Manan, 2004) as one of 42 municipal bylaws (Village of Grand Manan, 2015).

The Canada - New Brunswick Agreement (Canada-New Brunswick, 2005) required the Province to submit a public outcomes report every five years (Capital Management Engineering Limited, 2010). At the time of this research, only one report (2010) was publicly accessible on the provincial website. Email inquiries to the Province in August 2015, as a follow up to interviews conducted with provincial staff, to access the 2014 report indicated that the report was in the final stages of review and would be posted to the Government of New Brunswick website in the near future.

The 2009 report (Capital Management Engineering Limited, 2010) noted that the Gas Tax Funding Program (GTFP) in New Brunswick supported “construction, refurbishment, life extension and/or expansion of publicly owned infrastructure” (2010, p. 2). These infrastructure projects, summarized in Figure 1 referred to as Environmentally Sustainable Municipal Infrastructure (ESMI) were seen as essential for the delivery and administration of “potable water, wastewater collection and treatment, solid waste energy efficiency and clean energy local roads and bridges, and public transit” (p. 2). GTFP capacity building dollars were assigned to only local public service providers.

As a final point, without an updated provincial planning framework that revamps and potentially integrates the Municipalities Act, the Community Planning Act and the Regional Services Delivery Act transferring authority to local government institutions, the flexibility required to conduct and implement place-based sustainability planning will remain a challenge. This research suggests that the original intent of the Gas Tax Funding agreement was to provide the confidence of long-term resource and political commitments to municipalities, but that critical piece of provincial policy change has not yet occurred in New Brunswick.

The research further suggests that commitment must come from the provincial government in the form of legislative change and transference of authority back to the regional communities in order to reduce the mistrust and barriers to sustainable community development progress, due to lack of local decision-making authority and autonomy. This is supported by recent climate change research that has shown that the most innovative communities are those that have policy alignment within local municipal departments and policy congruence between levels of government (Dale A. , 2015).

As such, the Gas Tax Fund and the requirement for an ICSP could have been the impetus for real sustainability planning at the municipal level in New Brunswick. It is not too late. Now that the fund has become permanent, the province can choose to use those funds to encourage sustainable community planning and long-term implementation through the newly formed Regional Service Commissions that create a forum for municipal and non-municipal regional collaboration.

Finally, if the Province is to continue to distribute the GTFP funds based on a population criterion, then the Regional Service Commissions, similar to the County Councils (Province of New Brunswick, 2015) operating before authority was transferred to the Provincial Government, would seem a more efficient system. By providing dollars on a regional basis, funds currently controlled by the province for the unincorporated areas who are as one interviewee noted “living on the fringes of municipalities and utilizing services” their tax dollars do not fund, would be included. This too, supports the concept of flexibility noted as a result of this research as essential to supporting the creation of sustainable communities bounded by locally determined needs.


Figure 2: Distribution of Gas Tax Funding Projects by Category
Note: Adapted from New Brunswick Gas Tax Fund Outcomes Report, p. iii, by Capital Management Engineering Limited, 2010 (Capital Management Engineering Limited, 2010)

Additionally, the Province required that each municipality that received Gas Tax funding, file an annual report using a Performance Measurement Framework (PMF) template and indicators provided by the province that allows the Province to track results from all of the projects undertaken, summarized in Table 4 (Capital Management Engineering Limited, 2010, p. 17).

Table 4: Performance Measurement Framework Indicators

These individual reports were not accessible, so content could not be reviewed for the purpose of this research.

In New Brunswick, a list of optional sustainable development indicators summarized in Table 5 suggests social, environmental and economic indicators that could be used to assess a “community’s level of sustainability” (Province of New Brunswick, n.d., p. 1) during planning and subsequent plan evaluation processes. The document advocates sustainability as having three key goals: “a healthy environment, a vibrant economy, and social well-being” (n.d., p. 1).

Table 5: Sustainable Community Indicators (Province of New Brunswick, n.d.)

Conclusions
The need for flexibility in sustainability planning processes is conclusively proven from the results of this data. All participants noted that the tools dictated by the province employed within antiquated legislation negates the flexibility required for unique communities and sustainability as an evolving process (Dale A. , 2001). Additionally, a minority of interviewees thought ICSPs, in and of themselves, might be “too prescriptive and too overwhelming for municipalities” to implement successfully. When engaging the community, interviewees found the particular objectives/actions/wants in an ICSP were too ‘specific’ and too much for the municipality to implement without the ability/authority to influence other actors (e.g. key stakeholders, and other departments).

The influence of staff and elected officials, based on their individual experience and education, to affect sustainability processes was highlighted by one participant as “sustainable development is something that higher level politicians have to understand and have to be versed on to be willing to in some cases overrule their staff”.

Moreover, a number of interviews emphasized this personalized role of staff in planning process including “when I came I recognized it was a necessity” and “it didn’t happen because I wasn’t here at that time.” This staff personalization of planning processes can be viewed as both a barrier and a driver for sustainability. A barrier in the context that implementing sustainability requires, as one interviewee noted, “partnerships and committees are needed to achieve those goals… it’s not just engineering and environmental, it’s all departments”.

However, even staff influence on planning processes was seen as constrained by the province due to legislation that dictates municipal planning limiting their capacity to expand on planning processes applicable to their local needs. Several interviewees supported this as a constraint of sustainability planning in New Brunswick, noted by one as being “extremely centrally controlled” and municipalities have to “do what has been legislated and told to us to do by Fredericton” leaving “very little wiggle room or freedom to basically do anything that is outside the provincial legislation”.

Contrastingly, one case study did find the GTFP to be flexible in its application, permitting its use to fund a development project in response to a social issue that was gaining negative national media attention. Although this too was noted as being due to the role of the individual provincial leadership and political influence at the time, not due to an effective distribution model. A distribution model currently based on population that “has no real validity for what needs are or where we are going” and typically “provides minimal funds to depressed areas” as noted by interviewees. Other than British Columbia, New Brunswick is the only other province that has chosen to employ this centralized system of GTFP distribution inhibiting the ability of municipalities to develop their own plans based on localized needs.

This recognition of localized needs in each municipality was evident in the cases of Saint John and Moncton that developed very different ICSPs even though they used the same consultant. This uniqueness was most likely due to the benefits of sustainability planning which recognizes the flexibility requirement for each municipality to develop a plan without a one size fits all planning approach.

Further supporting the need for flexibility in municipal planning processes is the fact that processes to evaluate locally plans were found to be unique for each case study community. These ranged from a simple internal annual review by Council to reporting from all municipal departments on the status of specific objectives.

Although the Province was given flexibility in the distribution of the Gas Tax Fund Program, in both the initial GTFP agreement and the new 10-year agreement going forward as summarized in Appendix 5, the province did not cede that same degree of flexibility to their municipalities. In fact, there are a number of changes, in the new administrative agreement with New Brunswick (Government of Canada, 2014) highlighted in Appendix 5, that emphasize the provincial jurisdiction over municipalities going forward versus the language in the original agreement suggesting collaboration with all levels of government in the original agreement.

This further exemplifies the New Brunswick government’s hierarchal control of municipal processes preventing flexibility to govern at the level closest to the people. This is further reinforced in the new agreement that incorporated “regional delivery mechanisms” (Government of Canada, 2014) in place of an inclusive broader community delivery language supported by Dale (2001). Furthermore, both the current and original agreements recognize the need for investment in smaller jurisdictions; however, the new agreement now incorporates a population criterion (Government of Canada, 2014) suggesting sufficient investment in smaller jurisdictions will not occur.

Overall, this research found that the Gas Tax Funding Program (GTFP) played a minimal role in the advancement of sustainability in New Brunswick due to the inflexible provincial planning and implementation models. Integrated Community Sustainability Plans, or the incorporation of sustainability in municipal plans, was found to be conducted for one of two reasons: 1) it was anticipated to be a future legislated requirement or 2) to access funds. In the case of the latter related to the GTFP, municipalities anticipated that even though it was not a requirement in New Brunswick initially, it would become so in the future in order to access the program. All interviewees seemed to recognize the value of sustainability in their planning processes, describing it in all cases, similar to the Brundtland Commission definition but interestingly with an emphasis on tangible developments (i.e., infrastructure). This was evident in interviewee statements that included the suggestion that sustainable development “was tied into the other pillar of infrastructure and infrastructure need” within their planning process and a community member who described sustainable development as “bringing the greatest benefit to the community from any initiative…a government sponsored infrastructure project”.

Interviewees noted that the provincial government does seem to recognize the value of sustainability plans and that community involvement is key, suggesting that is why the earlier regional sustainability plans developed by the Commissions were not used, as they “really did not include community”. Although all plans submitted to the Province by municipalities are used by government staff to “ensure the municipalities are requesting funds to support the priorities listed in their plans” this too can be viewed as another level of control negating any flexibility in implementation by a municipality for their unique context (Dale A. , 2001). One interviewee noted that “stronger more viable communities do sustainability planning” while also emphasizing communities are not encouraged to spend money on something they do not have the capacity to sustain.

The need for flexibility in sustainability processes is an imperative reinforced as a result of this research. All participants noted that tools dictated by the Province employed within antiquated legislation negates the flexibility required, recognizing each community is unique and that sustainability is an evolving process (Dale A. , 2001). Additionally, some interviewees noted that communities that did develop Integrated Community Sustainability Plans (ICSP) thought they may be “too prescriptive and too overwhelming for municipalities” to implement successfully.

This prescriptive approach to planning seen in those that did submit an ICSP, suggested there is an influential role of the individual in sustainability processes as noted by Dale (2001). This was noted in all cases, whether an ICSP was completed or not. The influence of staff and elected officials, based on their individual experience and education, to affect sustainability processes was highlighted by one participant as “sustainable development is something that higher level politicians have to understand and have to be versed on to be willing to in some cases overrule their staff”.

Moreover, a number of interviews emphasized this personalized role of staff in planning process including “when I came I recognized it was a necessity” and “it didn’t happen because I wasn’t here at that time.” This staff personalization of planning processes can be viewed as both a barrier and a driver for sustainability. A barrier in the context that implementing sustainability requires, as one interviewee noted, “partnerships and committees are needed to achieve those goals… it’s not just engineering and environmental, it’s all departments”. On the other hand, every individual can be viewed as a driver for change, engaging elected individuals in a position to effect legislative change to understand the benefits of sustainability planning.

However, even staff influence on planning processes was seen as constrained by the province due to legislation that dictates municipal planning limiting their capacity to expand on planning processes to make them applicable to their local needs. Several interviewees supported this as a constraint of sustainability in New Brunswick, noted by one as being “extremely centrally controlled” and municipalities have to “do what has been legislated and told to us to do by Fredericton” leaving “very little wiggle room or freedom to basically do anything that is outside the provincial legislation”.

Although legislation was viewed as a barrier to municipal sustainability planning, there was generally support for the new asset management planning requirement to access the GTFP funds as “infrastructure in New Brunswick is old and in need of repair”, as noted by one interviewee. But, information also suggested that the gas tax funding distribution with only an infrastructure focus does not lead to sustainability, emphasized by one interviewee stating that “it is not pipes in the ground, it is quality of life for people” which requires “flexibility to use it for non-infrastructure needs.”

Contrastingly, one case study did find the GTFP to be flexible in its application, permitting its use to fund a development project in response to a social issue that was gaining negative national media attention. Although this too was noted as being due to the role of the individual provincial leadership and political influence at the time, not due to an effective distribution model. A distribution model currently based on population that “has no real validity for what needs are or where we are going” and typically “provides minimal funds to depressed areas” as noted by interviewees. Other than British Columbia, New Brunswick is the only other province that has chosen to employ this centralized system of GTFP distribution inhibiting the ability of municipalities to develop their own plans based on localized needs.

This recognition of localized needs in each municipality was evident in the cases of Saint John and Moncton that developed very different ICSPs even though they used the same consultant. This uniqueness was most likely due to the benefits of sustainability planning which recognizes the flexibility requirement for each municipality to develop a plan without a one size fits all planning approach.

Further supporting the need for flexibility in municipal planning processes is the fact that processes to evaluate locally plans were found to be unique for each case study community. These ranged from a simple internal annual review by Council to reporting from all municipal departments on the status of specific objectives.

Although the Province was given flexibility in the distribution of the Gas Tax Fund Program, in both the initial GTFP agreement and the new 10-year agreement going forward as summarized in Appendix 5, the province did not cede that same degree of flexibility to their municipalities. In fact, there are a number of changes, in the new administrative agreement with New Brunswick (Government of Canada, 2014) highlighted in Appendix 5, that emphasize the provincial jurisdiction over municipalities going forward versus the language in the original agreement suggesting collaboration with all levels of government in the original agreement.

This further exemplifies the New Brunswick government’s hierarchal control of municipal processes preventing flexibility to govern at the level closest to the people. This is further reinforced in the new agreement that incorporated “regional delivery mechanisms” (Government of Canada, 2014) in place of an inclusive broader community delivery language supported by Dale (2001). Furthermore, both the current and original agreements recognize the need for investment in smaller jurisdictions; however, the new agreement now incorporates a population criterion (Government of Canada, 2014) suggesting sufficient investment in smaller jurisdictions will not occur.

Overall, this research found that the Gas Tax Funding Program (GTFP) played a minimal role in the advancement of sustainability in New Brunswick due to the inflexible provincial implementation model. Integrated Community Sustainability Plans, or the incorporation of sustainability in municipal plans, was found to be conducted for one of two reasons: 1) it was anticipated to be a future legislated requirement or 2) to access funds. In the case of the latter related to the GTFP, municipalities anticipated that even though it was not a requirement in New Brunswick initially, it would become so in the future in order to access the program. All interviewees seemed to recognize the value of sustainability in their planning processes, describing it in all cases, similar to the Brundtland Commission definition but interestingly with an emphasis on tangible developments (i.e., infrastructure). This was evident in interviewee statements that included the suggestion that sustainable development “was tied into the other pillar of infrastructure and infrastructure need” within their planning process and a community member who described sustainable development as “bringing the greatest benefit to the community from any initiative…a government sponsored infrastructure project”.

Interviewees noted that the provincial government does seem to recognize the value of sustainability plans and that community involvement is key, suggesting that is why the earlier regional sustainability plans developed by the Commissions were not used, as they “really did not include community”. Although all plans submitted to the Province by municipalities are used by government staff to “ensure the municipalities are requesting funds to support the priorities listed in their plans” this too can be viewed as another level of control negating any flexibility in implementation by a municipality for their unique context (Dale A. , 2001). One interviewee noted that “stronger more viable communities do sustainability planning” while also emphasizing communities are not encouraged to spend money on something they do not have the capacity to sustain.

Policy Recommendations
Executing policy, such as sustainability planning, is best undertaken at a level of government where it is not only effective but “closest to the citizens affected and thus most responsive to their needs, to local distinctiveness, and to population diversity” (Canada Ltée (Spraytech, Société d'arrosage) v Hudson (Town), 2001), also known as the subsidiarity principle (Dale, Herbert, Newell, & Foon, 2012). There is a decentralization trend in federal and provincial legislation and case law, reflecting an increasing stature of municipalities and the role they play (Lidstone, D., 2004). However, a corresponding transfer of resources has not accompanied this devolution.

In New Brunswick, this decentralization trend is evident with the creation of the Regional Service Commissions (RSCs) (Province of New Brunswick, 2015). The RSCs have created an opportunity to increase the capacity of municipal governments to collaboratively plan and take advantage of resource sharing opportunities on a regional basis, bringing incorporated and unincorporated areas to the same table to develop a regional strategic plan and to make decisions collectively. To date, provincial policies have not been updated allowing for the transfer of real authority to the Commissions (and subsequently local governments) for planning and resource management decisions or the administration of local resources (i.e., capacity building, planning) required to implement planning processes.

This may be related in part to the current political structure in New Brunswick that continues to sponsor a semi–quasi decentralization of power to local authorities, as in the case of the Commissions. As such, local control as the next step in local governance reform has not occurred, even though government commissioned reports over the past two decades recommend increased regional planning, sanctioning greater authority for local managers, most recently the Report of the Commissioner on the Future of Local Governance (Finn, 2008).

Although provincial planning systems remain focused on economic development without an embedded vision of sustainability that encompass social, cultural and environmental services, each case study, in spite of very little flexibility in their planning processes, has instinctively, incorporated some sustainability in their planning. As in the case of St. Andrews and Grand Manan, where these processes may not be a formal ICSP, template or toolkits would advocate suggesting a more applicable solution would be a flexible sustainability planning policy supported by the province with development and integration processes that allow local ownership and management. Perhaps one solution would be the application of Principles of the Commons (On the Commons, 2015) that advocates the collective management of resources within a defined community with a focus on equitable access, use and sustainability.

Instead of this collective and collaborative approach, the current provincial planning policies have created several layers of overlapping and controlling bureaucracy that mitigates against the advancement of sustainability at the local level. Municipalities in the Province have retained their Planning Advisory Committees (PAC) as per legislation (R.S.N.B, 2015), while the Commissions, as required by the Regional Services Delivery Act (R.S.N.B., 2012) “provide land use planning services to all Local Service Districts” (Southwest New Brunswick Service Commission, 2015), the unincorporated areas. Thus, they have established a Planning Review and Advisory Committee (PRAC) (2015). Creating an additional planning layer, the Southwest Regional Service Commission, in the case of St. Andrews and Grand Manan, has created a Planning Management Committee (PMC), comprised of municipal CAOs, volunteer citizens, Commission staff and Board members. The PMC objective is “to provide advice and guidance” to the RSC Board of Directors related to “high level operational and strategic directions for Community Planning” (pers. comm., RSC staff, 2015).

This fragmented planning system and lack of transference by the province of planning and equitable decision-making authority has created barriers to sustainability planning and the implementation of ICSPs. This was also evident in the time spent observing case study actors in varied settings, which served to reinforce the fragmentation of planning systems, both development and implementation. Elected officials of municipalities mandated to plan within one piece of legislation and appointed (sometimes self-appointed)[sic] representatives of unincorporated areas operating with no legislative authority under another piece of legislation, are expected to operate under yet a third piece of legislation causing confusion and preventing progress towards any form of collective or co-ordinated planning. This observed fragmentation is a result of the dated legislation and the reluctance of the Province to transfer authority to the local governments. As a result, barriers are created for local actors working within antiquated planning systems to collaborate, in spite of the fact that the data reveals a unanimous understanding of the need to implement sustainable community development and the need to integrate it into local plans.

One could view the Regional Service Commissions’ objectives as supporting sustainability planning. Their planning mandate, currently focused on waste management and land use planning, could be considered the initial objectives for social, environmental and economic integration in longer term planning activities. Unfortunately, without the authority to adjust tax rates or to conduct regional planning the commissions are not able to promote sustainability (Telegraph Journal , 2015). Additionally, under the current system, the Commissions are unable to respond and conduct planning at the local level in response to adjusting community service needs such as declining waste management needs due to reduced consumer waste in recent years (pers. comm. PMC, 2015).

The Regional Service Commissions (2015) mandate reflects this support of sustainability, which states:
The Regional Service Commissions will be responsible for the development of a Regional Plan, the aim of which would be to better coordinate and manage development and land use within each of the 12 regions. More specifically, the Regional Plans will focus on strategies that foster sustainable development practices, that encourage coordinated development between communities, that influence and guide the location of significant infrastructure (e.g., major roadways, facilities, trails), and that enhance coordination of commercial / industrial development. Regional Plans will also serve as an important tool in better managing, protecting and harmonizing urban and rural landscapes and resources. (Southwest New Brunswick Service Commission, 2015).

In contrast, this research shows that small communities, with somewhat geographically predefined boundaries, as in the case of the Village of Grand Manan, had more flexibility to engage, collaborate and act based on the local socio-economic and environmental needs. This was further evidenced in the Town of St. Andrews with over 400 inputs in their planning process versus less than 100 in the both the City of Moncton and the City of Saint John. This suggests, that smaller communities are more engaged in their community planning processes and are able to influence their plans through an active community engagement process independent of using consultants. Both Moncton and Saint John used consultants to develop both their plans and the engagement process; St. Andrews used consultants to conduct background research, but not to create their plan and Gran Manan led their own plan development. Perhaps the continually shifting support for sustainable development planning stems from the persistent challenge of working across several government silos necessary to implement sustainability plans. ICSPs and respective policies would require cross-departmental and jurisdictional collaboration to be implemented effectively. Without this involvement and cooperation of several departments and agencies, plans could not be implemented (Finn, 2008, p. 124).

Since sustainability planning and implementation at local scales remains a challenge, a more appropriate rationale of planning that recognizes the individuality of each community, and flexible boundaries to support service demands (Feiock & Scholz, 2010, p. 145) is required. This is supported by the principles for managing the commons defined by Elinor Ostrom (2015) summarized in Table 6 , that could be applied to allow for more flexible local sustainability and ICSP planning processes.

In applying these principles, rules could then be developed that are unique and suitable for the social, environmental and economic needs of each community.

Table 6: Eight Principles for Managing the Commons

Strategic Questions

1. Does the use of outside expertise, that is, consultants influence the effectiveness of the community engagement process of an ICSP?
2. Does the use of outside expertise effect the degree of implementation of an ICSP in the community?
3. What should the balance be between community autonomy and provincial oversight, if any?

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Colleen Matte
published April 30, 2015

Case Summary
The personal vehicle has been the most influential factor in the development of the built environment since the 1950’s. As a result, human perceptions are that it has become almost impossible to navigate without a car (Dale et al., 2012). Thus despite our growing understanding about the impacts of automobiles on the planet, private vehicle use is on the rise (Statistics Canada, 2010). In 2009, the transportation sector was the second largest source of greenhouse gas emissions, accounting for 28% of Canada’s total 690 mega tonnes of carbon dioxide equivalent (Mt CO2 eq) emissions (Environment Canada, 2011).

Grassroots movements have played an integral role in providing alternative solutions towards community sustainability (Capria, 2013). Car sharing is one of these initiatives that have grown in Canada over the last 20 years (Shasheen and Cohen, 2012) and provides an alternative that allows people the freedom of vehicle ownership, while at the same time, integrating economic, social and environmental benefits.

The Kootenay Car Share Cooperative (KCC) is a unique rural model that operates six branches in British Columbia (Nelson, Revelstoke, Kaslo, Kimberly, Fernie and Rossland) of various success. The KCC serves populations between 1,000-10,000 people and densities as low as 59.5 people per square kilometer compared to an urban-based car share like Vancouver’s Modo that has densities of about 5,249 people per square kilometer (Statistics Canada, 2010).

This case study explores the Kootenay Car share Cooperative (KCC) exploring the social factors in these communities in order to understand why some are successful and some are not in an effort to strengthen the existing branches, provide guidance for opening future branches and provide resources for other rural communities in Canada.

Sustainable Development Characteristics
Environmentally, Martin & Shasheen (2011) argue that car sharing can reduce personal driving by 30 to 70% which is a significant reduction that can support communities in achieving clean air and carbon reduction goals. In fact a KCC member survey performed in 2011 calculated that for each vehicle KCC has on the road 80,000 km of driving is reduced per year through shared use. This translates into 0.0987kg of GHG per vehicle and 165.9 tonnes per year for the 22 vehicles currently in the KCC fleet.

The social benefits of car sharing come in several forms, reducing stress, improving health and building community resiliency. Someone who is car sharing is walking to and from the vehicle, they are engaging in their community, they are another set of eyes on that street so that street become safer. They are also more likely to access entertainment that is close to home and to participate in community events and have a larger stake in their community, they know their neighbours (Henegar, personal communication, May 20, 2014). One of the challenges is that the link between these benefits and car sharing has yet to be communicated and understood in a way by the general society.

Car sharing can also be a more economical option than private vehicle ownership. When considering the true costs of vehicle ownership which include depreciation, regular maintenance and insurance it can be cost prohibitive for many low income individuals to own their own vehicle. This in turn can limit their access to community services found within the road infrastructure of our present communities. Car shares have the ability to turn vehicles into a shared commodity with costs divided amongst typically 10-20 people greatly increasing accessibility.

Critical Success Factors
A significant influence on the adoption and long-term success of a KCC branch appears to be linked to its founding members and its initial context. In the three cases where KCC was funded to seek out any community that was interested (Kimberley, Fernie and Golden), there has been a lack of ownership and investment into making it successful. In the cases where the branches have been successful from the start, namely Revelstoke and Kaslo, the founding members actually needed the services and were otherwise without a car to meet their transportation needs.

Understanding the existing transportation infrastructure and mobility culture in a new community is also a key factor to success. Communities with limited access to transportation alternatives are going to be more dependent on vehicle use and possibly more receptive to car sharing. Doing an extensive market survey to understand how many people would use the service and the types of vehicles they are looking for before starting operations is critical in the initial success of the branch. Starting a branch with at least two vehicles including a truck has proven to be the most effective way to attract new members and maintain member retention.

The economics of a community does have an influence over its success. Lower income populations that rely on transit alternatives are more likely to adopt car sharing in rural areas. The less availability to transit alternatives also signals a greater need for car sharing services. Finally, understanding the socio-political context of the community is also a key indicator. Communities that are more left leaning politically and engage in a variety of employment sectors that focus on public goods and services will be more likely to adopt car sharing. Having the local context to understand the local “truck or car” culture will also aid in determining the willingness of adopting car sharing practices of its residents.

Community Contact Information
Colleen Matte, M.A., B.Sc.
Nelson, British Columbia, Canada

What Worked?
Local champions are the most effective way to culturally embed the practice of car sharing in any one community by communicating the service benefits to peer groups and building the necessary social capital for adoption. People who are new to the concept need to speak with someone they know that is using the service to understand how it can work for them, peer group influence. When the founding members are using it frequently they generate personal stories they can share, influencing other people to join.

What Didn’t work?
New cities and towns that want to participate in the program are approaching KCC, however, with the lack of formally established criteria for starting a branch, KCC is not in a position to support them. This has become a dilemma that is hindering well-meaning communities that want to access KCC resources as well as causing a financial strain on the cooperative from branches that started without proper analysis in place.

Financial Costs and Funding Sources
Almost all of the branches have depended on the larger organization to support them financially before being able to achieve any type of profit. Historically, the success of a branch came from the social benefits of providing the service as the income from vehicle usage were barely meeting the needs of the operating expenses. Members provided loans to KCC, typically $1000, and were paid out monthly dividends of 3.25% in driving credits until the cooperative was able to return these funds.

As time went on. branches have strengthened and have been able to realize profits that are reinvested into the cooperative. Table 1 shows the financial profitability from each branch from 2011-2013 and uses solely the profit and expenses from vehicle operations and does not include any administrative or overhead costs.

Table 1 Comparison of Vehicle Income Minus Vehicles Expenses Over Three Years for KCC Branches

Research Analysis
This case study was drawn from eleven interviews with individuals within the car sharing community to examine why some KCC branches have flourished while others have floundered. Three sub-questions were also examined. What success indicators are different between rural and urban-based car shares?, What is the influence on how a branch is started? What benefits does car sharing provide to communities? The objective was to give new communities the best chance in understanding what it takes to make car sharing work for them, and to learn from previous failures and successes. There is a certain amount of location design that need to be incorporated in this model as the political, social and economic context of a community all play a role in how the uptake of the business will be for them.

Detailed Background Case Description
What is Car sharing?
Car sharing is a method of vehicle ownership where a business or entity holds the title of the vehicle and its customers are able to book them for varying lengths of time. This is different from a car rental agency in that customers can book for short time increments (in some cases as low as 15 minutes). Car sharing cooperatives are not profit entities, they are membership based. There are now several models of car sharing including the traditional, one-way and peer to peer. 

• Traditional model - vehicles have a designated location and must be returned to that location. Bookings are managed on a calendar basis and customers can reserve in advance or at the time of use if a vehicles is available. Customers are then billed out for the time and/or kilometers that they use.
• One-way model - vehicles can be used from one area to another and users are not required to return the vehicle to the location they picked up the vehicle. Long distance trips are not offered by this service and it has only been implemented in large urban centers. Many vehicles need to be launched at once to make this an effective service.
• Peer to peer model - involves personally owned vehicles being shared. Essentially individuals are renting out their own car in order to offset the costs of vehicle ownership. This model has had limited success due to uncertain and fragmented public policy and car insurance regimes that threatened the growth and investment in this model (Kent, 2013).

Car sharing History in Canada
The current modern car sharing model that we see in Canada today began in 1987 in Switzerland followed by Germany in 1988. Canada launched its first car share in 1994 with Quebec’s Commuauto followed by the Vancouver Auto Network (now known at Modo) in 1995 (Modo the car co-op, 2011). These car sharing organizations (CSO) continue to be the largest operators in Canada with approximately 1300 and 325 vehicles respectively (Car sharing Association, 2014).

In 2011, the Car sharing Association (CSA) was formed. The CSA works with shared-use mobility operators to advance industry standards, best practices and public policy advocacy. Collectively, the CSA represents more than 4,000-shared vehicles and 125,000 drivers. Their goal is to help their members develop business strategies, improve operational efficienc and increase the positive social and environmental impacts of car sharing through networking and conference events held around the world (Car sharing Association, 2014). In 2012 the Federation of Canadian Car share Cooperatives (FC3), essentially a subset of the CSA, was created with a focus on Canadian and cooperative centric issues along with the goals of the larger Association.

Currently there is exponential growth occurring in this industry for reasons that can be attributed to greater environmental consciousness, the recent economic crisis and rising fuel costs. This can be seen as a positive step environmentally as it is reported that car sharing programs reduce household greenhouse gas emissions by 0.58-0.84t per year (Martin and Shasheen, 2011).

Who is KCC in the world of car sharing?
Of the car sharing organizations in Canada, 85% of these are located in large cities including Toronto, Ottawa, Calgary, Vancouver and Montreal (Shaheen and Cohen, 2012). To date, KCC offers car sharing to the smallest communities and densities in North America (Shasheen and Cohen, 2012).

KCC services six municipalities, depicted in Figure 1, with populations ranging from 1,000-10,000. The Kootenay Region covers approximately 7.6 million hectares of the southeast corner of British Columbia and has mountainous terrain. The region extends from the Arrow Lakes country in the west to the Alberta Provincial Boundary in the east, and from the United States International Boundary in the south to Kinbasket Lake in the north (Environment Canada, 2013). Two lane highways wind through the valleys that link communities.

Figure 1. Map of KCC branch locations in Southeastern British Columbia.
 

There are three notable differences in operations of KCC compared to other car share cooperatives in Canada---vehicle purchasing, insurance and rate structure. Unlike other Canadian car shares that typically purchase or lease slightly used vehicles from car rental agencies, KCC purchases older vehicles outright that are under $10,000, usually over 100,000 km and a minimum of 5 years old. KCC’s current fleet has 22 vehicles with an average age of 10 years old (Car locations, 2014). This purchasing strategy significantly reduces loss on depreciation and the vehicles are worn in with less chance of manufacture defects arising. An older fleet also means lower insurance rates (Benefits of buying a used car, 2013).

Modo has made significant inroads with the insurance structure for car sharing in BC and as a result car sharing has its own classification that is more affordable than taxi, shuttle and other fleet based operations (K.New, personal communication, March 31, 2012). KCC does not insure its vehicles for collision or comprehensive and has been able, to this point, pay out any claims due to at-fault accidents and currently hold a 52% discount off of the Insurance Corporation of British Columbia (ICBC) rates because they have never made a claim.

KCC’s rate structure includes hourly and kilometer charges that are lower than any other car sharing organization in Canada. The main reason for this is that trips are significantly different for rural communities. While most urban trips are not over a long distance, due to traffic congestion, they often take longer. This is in contrast to rural trips which often take 40 km to get to the next community to access the services that members may need.

Who uses car sharing and why?
The results of this case study showed that there are some general trends and common uses for people in all of the branches. Past research shows that car sharing appeals to individuals who identify themselves as social activists, environmentalist, innovators, economizers or practical travelers (Burkdardt and Millard-Ball, 2006). For KCC the following four identities relate to the type of people who became members.

• To increase their mobility. According to the 2009 KCC members survey 65% of members fall into the category of either not owning a car by choice or unable to own a car due to financial constraints. These members are able to do most of their trips by transit or active transportation and when these options are not viable they use car sharing to supplement their mobility needs.
• To be more economical - Once the hurdle of understanding the true cost of vehicle ownership is overcome many members seek out KCC as a more economical alternative (K. Gorecki, personal communication, June 12, 2014).
• To have access to a variety of vehicles. Eighty percent of KCC members indicated that one of the reasons they decided to join and continue to be a member is to have access to a truck or van the few times a year they need it. Interestingly, when the Kaslo branch was allocated a truck the membership increased dramatically but so did the use of the car. People were signing up for the truck but then realized the saving and usefulness of having access to smaller vehicles as well (A.Shadrack, personal communication, May 1, 2014).
• To reduce their environmental footprint. The eager environmentalists are often the first to sign up to car sharing when a new branch is opened in a community. They are already seeking out ways to reduce their environmental impacts and understand the significance of the transportation sector on their GHG production. However, it is also these early adopters that often believe in the concept but fail to use the service in order to make it viable. They are either unwilling or unable to make the shift from private vehicle ownership but feel the service should be available in their community.

Strategic Questions

1. How does one scale up and out car sharing across the country?
2. The car culture is so strong in North American culture, what strategies could be used to promote greater adoption of car sharing and cooperatives?
3. Should regulation be enacted to stimulate car sharing in new condo development?
4. What is the relationship between increased car sharing and enhance public transportation?
5. Should there be a multi-model shift in transportation options for Canadians?
6. The sharing economy relies a lot on trust building social capital. How could this affect activities like caring sharing?

Resources and References

Benefits of buying a used car. (2013). Retrieved June 15, 2014 from https://www.cars.com/articles/benefits-of-buying-a-used-car-1420680890104/ 

Burkhardt, J.E., Ball, A.M., (2006).Who is attracted to carsharing? Retrieved from http://www.citeulike.org/user/imnotjesus/article/3058048

Capria, T. (2013). Community Economic Development and Environmental Justice: Sharing environmental justice and community economic development strategies. Duke University. Retrieved from http://law.duke.edu/sites/default/files/clinics/cec/capria.pdf

Car locations. (2014). Retrieved June 13, 2014 from http://www.carsharecoop.ca/car-locations/

Carsharing Association. (2014). About. Retrieved from http://carsharing.org/about/

Dale, A., Dushenko, W., Robinson, P. (2012). Urban sustainability reconnecting space and place. Toronto: University of Toronto Press. doi: 10.1111/cag.12130

Environment Canada. (2011). National inventory report: 1990-2009 greenhouse gas sources and sinks in Canada. Retrieved from http://www.ec.gc.ca/Publications/default.asp?lang=En&xml=a07097EF-8EE1-4FF0-9aFB-6c392078d1a9

Environment Canada. (2013). Welcome to the Kootenay Region. Retrieved from http://www.env.gov.bc.ca/kootenay/

Kent, J. (2013) Carsharing as active transport. What are the potential health benefits? Journal of Transportation and Health, 18 September 2013. http://dx.doi.org.ezproxy.royalroads.ca/10.1016/j.jth.2013.07.003

Martin, E., Shaheen, S. (2011). The impact of carsharing on public transit and non-motorized travel: an exploration of North American carsharing survey data. Transportation Sustainability Research Center, 4(11), 2094-2114; doi:10.3390/en4112094

Modo the car co-op (2011). Home. Retrieved from http://www.modo.coop

Shaheen, Susan and Cohen, Adam. (2012). Carsharing market overview, analysis and trends. Published by University of California. Retrieved from http://76.12.4.249/artman2/uploads/1/Carsharing_Innovative_Mobility_Ind…

Statistics Canada. (2010). Greenhouse gas emissions from private vehicles in Canada 1990 to 2007. Retrieved from http://www.statcan.gc.ca/pub/16-001-m/2010012/part-partie1-eng.htm

Rebecca Foon, Director, Sustainability Solutions Group
Professor Ann Dale, Canada Research Chair in Sustainable Community Development, Royal Roads University
May 29, 2014

Case Summary

The Ottawa Renewable Energy Co-operative (OREC), established in 2010, is a for-profit co-operative that develops renewable energy systems within the City of Ottawa. OREC gives Ottawa residents the opportunity to support sustainable community infrastructure by direct investment into the growth of a local renewable energy that finance renewable energy projects, through a co-operative structure.

OREC enters into 20-year lease agreements with property owners in Ottawa communities to use their land or rooftops for the installation of renewable energy systems. Once the installations are in place, the renewable energy produced generates revenue through Ontario’s Feed-in Tariff (FIT) program, which provides guaranteed payment for each kilowatt hour (kWh) of electricity produced. This enables OREC to fully repay invested capital to investors along with a dividend over a 20-year period.

In addition to the benefits of renewable energy and local economic growth associated with community-level renewable projects, OREC’s projects build social capital in the community through strong community engagement and their Board educational outreach activities.

Sustainable Development Characteristics

This case study demonstrates two key features of sustainable development—an alternative governance model, that is, a co-operative business model, and its attention to one of the most critical issues of the 21st century, renewable energy and climate change.

The Ottawa Renewable Energy Co-operative (OREC) is committed to community-based power generation by providing residents of Ottawa the opportunity to invest money into solar rooftop projects within their community. It is a unique model that fully integrates the social, ecological and economic imperatives of sustainable development. The co-operative business model contributes to sustainable community development by:

• investing in community-based asset development: all profits, after operational costs have been covered, are distributed to member investors;
• diversifying the energy grid through renewable energy options; through member investments in renewable electricity generation facilities with long term contracts;
• local economic development by financing long term, local and clean power facilities, helping to fuel the green economy and open up investment opportunities related to addressing climate change;
• local economic diversification;
• community engagement and collaboration through community education and outreach programs about renewable energy; and,
• sustainable community development through the seven co-operative principles.

OREC’s co-operative governance structure in and of itself has been a key factor for embedding sustainable development principles into the organization’s operations. Operating as a co-operative means that the organization is guided by seven principles ensuring that the organization integrates sustainable development within its business model:

1. voluntary and open membership;
2. democratic member control;
3. member economic participation;
4. autonomy and independence;
5. education, training, and information;
6. co-operation among co-operatives; and,
7. concern for community.

Critical Success Factors

The success of OREC’s model can be attributed to several factors: enabling provincial legislation, its strong connections to the community, very strong Board leadership, the expertise and commitment of its Board members, its linkages to fueling the green economy through community based renewable power generation, and its commitment to the co-operative model. Since its inception, OREC has been able to flourish due to committed leadership and expertise in both renewable energy and the co-operative model, working with and within different levels of government. From this experiential base, the organization has had the focus and forward-thinking to invest in the development of its solar power community-based projects. By working on behalf of its member owners, and not ‘distant’ shareholders, business decisions take into account the impacts they have on the communities in which OREC operates. Further, by involving more and more people into its share offerings, its outreach and its active communications program, OREC also builds social capital in the community by bringing diverse people together and also implicating them into sustainable energy implementation that directly impacts members.

Community Contact Information

Janice Ashworth, Operations Manager
Ottawa Renewable Energy Co-operative Inc.
192 Rodney Crescent Ottawa, ON K1H 5J9
t: 613-296-8232
e: info@OttawaRenewableEnergyCoop.ca
Facebook: /OttawaRenewableEnergyCoop
Twitter: @ORECoop

What Worked?

OREC has had a number of success factors that have contributed to the current success of the organization. The first step was the provincial enabling legislation that has started to create a level playing field for renewables vis-a-vis traditional suppliers. The Green Energy Act introduced in 2009 created strong financial incentives for a renewable market by providing stable pricing (the feed in tariff), creating a more secure investment opportunity for renewable projects, and in subsequent policies, giving preference to energy co-operatives.

With respect to OREC, its founding board members are dedicated individuals that have extensive knowledge of renewable energy and previous existing and deep connections to the Ottawa community. The OREC board is actively engaged in daily operations and has a diversity of expertise and skills, including renewable energy engineering, policy, business, accounting, community engagement and education, and social finance. Three advisory committees have also been formed to engage members in technical, business, and communications tasks, building upon Board members’ particular expertise and skills.

Ottawa has some beneficial physical conditions that benefit solar energy production. Ottawa is one of the best locations in Ontario for solar production as there are many sunny days throughout the year (including the winter). Solar energy production increases when it is cold; thus, OREC’s solar panels produce effectively during the sunny winter days in Ottawa.

OREC’s projects not only provide ‘ethical’ investment opportunities to residents of Ottawa, but also serve as solar energy demonstration projects for residents to discover, discuss, and share with peers the role that renewables can play for more sustainable futures. The City of Ottawa benefits from the success of these projects as revenue stays within the geographical limits of the city and local jobs are created in the development and maintenance of the projects.

OREC has a strong relationship with the Federation of Community Power Co-operatives (FCPC), a province-wide umbrella organization for community power co-ops in Ontario that are developing grid-tied renewable energy projects. This network fosters strong relationships between renewable energy co-ops, allowing them to network, share knowledge and strengthen strategies and opportunities for collaboration and investment strategies.

What Doesn’t work?

The barriers to renewable energy co-operatives can be firstly characterized as the subsidized price of the traditional electricity supply. To date, traditional energy sources are heavily subsidized by governments. As mentioned in the Community Research Connection Blog on Business Leaders, the economic case for withdrawing fossil fuel subsidies is steadily increasing; the January 11th, 2014 edition of The Economist entitled The Economic Case for Scrapping Fossil Fuel Subsidies is Getting Stronger states, "It is not only that the economic cost of subsidies is at a new high. The case for cutting them this year is particularly strong. Countries with high fuel subsidies are more exposed to external shocks, as holding down prices causes their budget deficits to explode, making them vulnerable to rising global interest rates. Cutting subsidies now would help them prepare for when borrowing gets harder as quantitative easing ends. It would also leave more money for growth-boosting policies, such as infrastructure investment"¹.

Other factors are technical, capacity, institutional, and time lags. With respect to technical and capacity issues, OREC has to continuously search for new projects in the right locations, and can be limited by grid capacity issues in some locations. It has experienced challenges in finding partners, identifying the right building, at the right time willing to lease their roof for a 20-year time commitment (OREC’s buildings vary from institutions, businesses, school boards, community buildings, condos, etc.).

The grid is a major barrier to entry and scaling up. The current grid was designed to handle large-energy suppliers shipping power through big lines, such as nuclear and coal electricity; a unidirectional system to individual homes. It is not designed to handle small-scale distributed energy inputs and significant investment is needed to create or re-design the grid to be capable of handling more diverse inputs. Such an investment is dependent upon other government support, and this is, of course, dependent upon factors such as path dependence, technological lock-in, institutional rigidities (Dale and Newman, 2009) and commitments to a priori energy mix decisions. In Ottawa, the limited capacity of the Hawthorne Transmission Station resulted in no renewable electricity projects being approved under FIT 2 in Ottawa in 2013. Consequently, OREC did not win any new projects to build under FIT 2; in fact not one project was awarded in the entire city. The Ontario government has promised that the Hawthorne Transmission Station will be updated, and consequently FIT 3 has the potential to encourage and open up a diversity of smaller-scale projects, while prioritizing aboriginal, public sector, and community group power projects.

Institutionally, it has also been difficult for OREC to leverage debt financing as conventional financial institutions do not understand the value and the security of the FIT contracts held by renewable energy co-operatives. Due to OREC being a for-profit co-operative, access to grant money is limited. Most organizations of OREC’s size at this stage in their evolution face issues of scaling up and out. Energy projects, even renewables, need large capital assets to start, and OREC has been, albeit slowly, scaling up the size of its projects. One Board member estimates that OREC will have to ‘grow’ from a one million dollar portfolio to 5 million, in order to be financially viable in the long-term.

As mentioned above, OREC also experiences time lag issues. OREC’s first offering statement was submitted in August 2011. However, OREC experienced a delay as the Financial Services Commission of Ontario (FSCO) took a substantial amount of time to approve the offering. During this time the industry and the FIT rules were changing dramatically, causing a key project OREC had targeted to collapse. The co-op however was able to identify several new projects and when they were secure, started raising money from its members. As the offering statement was time sensitive, when the decision was made to proceed there was only two months left to raise the money. Even with these challenges OREC was able to raise $991,000 in a nine week period over the summer of 2012. OREC is regulated under the Cooperatives Corporation Act (CCA) and all capital fundraising matters (offering statements) are regulated through FSCO.

There is considerable media misinformation about the role that renewable energy plays in the grid. For example, during our interviews, a press article was highlighted claiming that “the government signed contracts for so much unneeded electricity that Ontario had to export the surplus, at a loss, to Manitoba, Quebec, New York, Michigan or Minnesota, adding $220 a year to the average household electricity bill, said NDP energy critic Peter Tabuns”. The article then went on to state, however, that “the province buys electricity for about 8.5 cents a kilowatt hour, often through contracts that include generous subsidies for solar and wind power, but then has to sell off the surplus for less than three cents/kwh, said Tabuns” (Ottawa Citizen, Tuesday, January 21, 2014). Please see the detailed section of this case study to see how this last statement is inaccurate.

With regards to best practices, Germany is leading the world in distributed power grid design. Germany has had feed-in tariffs for the past 15 years; the German tariffs have brought down the cost of renewable power significantly while they have expanded the market and implementation industry. The country is now well on the way to a wholesale transition from nuclear power (and fossil fuels) to renewable sources; a national project entitled the ‘Energiewende”². In January 2012, Germany made a reduction in its tariffs, lowering the cost of solar by another 15% to match the latest reductions in solar panel costs³. Renewables reduce Germany’s GHG emissions by around 130 million tons annually. Overall, Germany overshot its Kyoto target of a 21% reduction for 2012. By the end of 2012, Germany had reduced its GHG emissions by 25.5% and is now moving towards reaching its 2020 target of 40% reductions (relative to 1990 levels) ⁴.

Over 60 other countries around the World also use feed-in tariffs – including China, Japan, France, Spain, the UK, and Italy, as well as smaller countries like Sri Lanka and Malaysia⁵.

Financial Costs and Funding Sources

OREC is a membership based co-operative; residents of Ottawa can become members of OREC and invest in local renewable power generation through the purchase of preference shares, which provide the capital to finance local projects, wholly-owned by OREC via its members. Some larger projects, are co-financed through joint venture arrangements.

OREC has chosen to confine their boundaries for projects and members within the City of Ottawa in an effort to close the loop of energy production and energy consumption for OREC’s members. This gives Ottawa residents a sense of investing in local economic development through renewable power generation, recognizing that they are investing both for themselves and their communities. OREC leases roof or property space from the respective property owners for the solar systems and OREC’s investors benefit from the revenue received from the sale of power.

OREC’s investment structure includes purchase of a member share ($100). Each membership share provides a lifetime membership, voting rights and the opportunity to purchase Preference Shares when offered. A Preference Share is a capital investment in OREC’s portfolio of Feed-in Tariff (FIT) renewable energy projects. Preference Shares can be purchased in $500 increments, with a minimum purchase of $2,500 to a maximum of $100,000 per member, with an expected annual dividend of 5% in addition to a full repayment of capital (starting in year 6) over a 20-year period.

Preference Shares are RRSP eligible, through the Canadian Workers Co-operative Federation. A minimum purchase value of $5,000 applies when the RRSP program is used. Preference Shares can only be redeemed early if sold to another member or to OREC, as approved by the OREC board.

OREC currently has 277 members. OREC raised $991,000 in its first offering (which included developing five 10kw projects on housing coops and 30% of a 250 kW project on a storage facility in Dunrobin - all projects have been operational since the spring of 2013). OREC paid out its first dividend (of 2%) in the fall of 2013. They have since paid out another interim dividend (in the spring of 2014) of 1.75%, enabling them to get closer to their 5% target.

OREC’s second offering of a maximum of $1.25 million sold out on April 30. This Series 2 (under FIT 1) consists of a second round of projects that is being invested in two mid-sized solar projects (Samuel Genest High School and an additional 20% in the Dunrobin storage facility). OREC is aiming to achieve $5 million in investments with its expected third Offering Statement in 2014/15.

Profits are distributed to investors and members (in the case of excess profits) and therefore remain locally-invested, directly benefiting the community and contributing to its sustainable development through re-localization⁶.

Research Method

For this research, eleven in-person interviews were conducted, ten with different OREC members and another with one of their clients, using a semi-structured open-ended interview process. Prior to interviewing, a literature review of government policies and reports on Ontario’s long-term energy plan, journal articles relating to the co-operative model, media articles on the impacts of energy generation sources in Ontario and documents from the organization were reviewed. Interviewees included a representative sample of employees, organizations and government collaborating with OREC, and a majority of the OREC board members, including the former President and four founding members.

Detailed Background Case Description

In May 2013, global carbon dioxide (CO2) emissions reached 400 parts per million (ppm) for the first time in probably the last 3 million years⁷. This historic milestone, which was reached years before the scientific community expected, shows the degree to which humans are impacting the atmosphere and the climate. It also illustrates how we are entering uncharted territory, which is to say that we are embarking upon a period of uncertain and probably undesirable change. Not only is the earth getting warmer, but positive feedback cycles threaten to further increase concentrations of greenhouse gas (GHG) emissions and/or hinder earth’s ability to absorb these gases⁸. Although mean temperatures have increased and are projected to continue to rise, perhaps the most important impact in climate change is the potential for more, and more severe, extreme and unusual events such as heavy precipitation, floods, hurricanes and droughts⁹.

Provincial Context

OREC’s growth was in direct response to innovative provincial legislation and policies by the provincial government that was committed to shutting down all its coal fired power plants within a decade. Ontario’s Climate Change Action Plan was created to reduce the Province’s greenhouse gas emissions and position the province towards a sustainable future. Ontario has adopted aggressive targets for reducing Ontario’s greenhouse gas emissions: six per cent below 1990 levels by 2014, 15 per cent by 2020 and 80 per cent by 2050. The Province is planning to achieve these targets through the phasing out coal-fired power plants and supporting more renewable energy; creating a culture of conservation; creating a cap-and-trade system for industry; giving provincial sales tax breaks for energy-efficient products, and introducing programs and incentives for consumers, businesses, and municipalities to go green¹⁰.

The province is working towards phasing out the use of coal in generating electricity by the end of 2014. Further, it is investing in transit systems for urban areas and providing incentives for electric vehicles and is supporting research and innovation through the Ontario Emerging Technology Fund, the Ontario Network of Excellence (ONE), and other initiatives¹¹.

Ontario’s Green Energy Act + Feed-in-Tariff

Ontario’s Green Energy Act (GEA) was created to encourage renewable energy generation, encourage energy conservation and promote the creation of clean energy jobs. Ontario’s Feed-in Tariff (FIT) Program for power generation from renewable energy is part of a long-term strategy under the Government of Ontario’s Green Energy Act to develop a renewable power industry in the Province, encourage investment in clean renewable power, and drive down the cost of renewable power systems.

The FIT initiative currently consists of two programs that are run by the Ontario Power Authority (OPA) – a MicroFIT program for small solar systems 10kW or less, and a FIT program for solar, wind, hydro, biomass, and biogas power systems up to 10 MW. The two programs have resulted to date in the contracting of close to 9,000 MW of new renewable power systems, representing over 1700 medium and large renewable FIT power projects and over 50,000 smaller MicroFIT projects. This represents enough electricity to power almost 1.2 million homes; it has also helped to create over 20,000 jobs. This has lowered the price of these systems by up to 50%¹². FIT has also helped Ontario shut down eight of nineteen coal units while helping to stabilize the grid by having more points of power generation in all parts of the Province.

In the latest (third) round of tariffs, the rates for solar power were reduced by 50% to reflect the lower costs of these technologies. Due to the costs of conventional power plants and their fuels increasing in cost, renewable power sources could be competitive or cheaper than conventional power sources within a decade¹³.

A core consideration of the FIT program design is that the program is reviewed yearly to ensure the new rates (for 20 year periods) reflect the lower costs of renewable energy production and provide the investor with a predictable 9 to 10% rate of return. In this way the costs to the electricity rate payer is steadily lowered, the industry can grow as it matures and lowers costs and the investors have a predictable rate of return. As mentioned earlier, the German experience over 15 years has proven to be very successful in this regard.

The Ministry of Energy sets the targets for the percentage of renewables on the grid and the grid operator has to oblige; grid upgrades are required for certain energy generation projects. All prospective FIT projects must demonstrate that they meet the technical and safety standards of the grid. All projects other than small MicroFIT projects must also undergo a connection test to ensure that there is sufficient local grid capacity. If the projects meet these conditions, the local utility must connect them to the grid. However, if there is insufficient capacity, as demonstrated in some parts of Eastern Ontario, utilities need to upgrade the grid so that these projects can be connected in the future. As mentioned above, this is the situation in Ottawa with the Hawthorne sub-station, scheduled to be upgraded in 2014.

In 2013, energy production in Ontario included gas (10%), solar PV (1%), bioenergy (1%), wind (3%), hydro (22%), coal (2%), nuclear (56%) and conservation (5%). As you can see from this energy mix, nuclear dominates the energy grid, followed by hydro, with renewables making up less than 5% of the grid. As previously mentioned, the grid was designed for a one-way form of energy from centralized sources (coal or nuclear for example) and not for two-way flow as is required by decentralized generation sources. One other element to note is that nuclear energy is considered a "base load" because it produces the same amount of power all the time and cannot safely be turned up and down. This means that 50-60% of the provincial grid capacity is taken up by nuclear at all times and the variable power sources (renewables primarily) only have the remainder to play with. This also means there is excess power overnight, which may create a need to dump much of it or sometimes pay neigbouring jurisdictions to take it from us. By reducing the amount of nuclear or introducing energy storage, more renewables will be possible on the grid. ^{14 15}

Benefits of Solar Energy

Solar energy is a clean source of energy that can provide significant power and there is a nearly an endless supply; it is especially available when most needed by the grid. Solar PV tariffs are categorized according to whether they are on a roof or ground and by size. Systems on a roof are, by definition closer to demand. Therefore, solar PV generation reduces grid line loss. On average, 7 to 9% of the electricity generated in Ontario is lost during transmission to what’s called ‘line loss’ at various points in the grid. The longer the distance from the point of production to the point of consumption, and the higher the demand and stress on the grid, the greater the line loss will be. In peak demand periods, when high currents are present on the lines, the line loss increase and can reach over 11%, or a marginal increase of 20-25%. Locally produced peak energy avoids these broad-system losses, thus provide a significant financial and operational benefit¹⁶.

OREC’s Background

The idea for the Ottawa Renewable Energy Co-op (OREC) grew out of an existing co-operative working on solar thermal panel installations called Sustainable Ottawa. The five founding OREC board members were all involved in this solar thermal initiative when the Feed-in Tariff (FIT) Program was announced in 2009. The OREC founders all shared a vision to establish a co-operative that built a connection between members through the co-operative structure, to contribute to a more sustainable community through the renewable energy they would collectively be selling to the grid, and to build energy literacy. At that time, they decided that a renewable energy co-op focusing on renewable community based power would offer an opportunity to increase the uptake of sustainable energy in Ottawa and provide on-the-ground demonstration projects of its viability. It was a strategic opportunity to connect renewable energy options directly with the Ottawa community. OREC was subsequently created to generate electricity under this program.

OREC is one of the oldest energy co-op working to create renewable energy to sell to the grid in the Province of Ontario. At the time of the FIT introduction, there were only 3 energy co-operatives operating, and there are currently over 70 energy co-operatives in the province of Ontario¹⁷. OREC continues to focus on solar projects in the City of Ottawa, although the co-op is looking into biogas and energy efficiency possibilities.

The Board consists of up to fifteen directors who are elected at the annual general meeting. Directors serve for three-year terms and are not remunerated. The board is responsible for contracts, projects, reserve funds, dividends and surplus distribution, and borrowing. Advisory committees have been formed to advise the board on business, technical, and communication issues, which have formed around both strategic imperatives and Board interest and expertise. The management team now includes a full-time Operations Manager and part-time bookkeeping, legal counsel, and technical services.

OREC has become well known in the community and has received significant media attention over the last few years for several reasons. Their Board members are actively engaged in community events and are committed to increasing civic literacy around the valuable role of renewable energy in sustainable community development. For example, OREC and Eileen Tallman Housing Co-operative ( one of OREC’s partners) collaborated on a solar carnival in the summer, contributing a lot of community value to that particular project. OREC is known to be very collaborative and transparent, sharing the production of data especially around how much solar energy is produced and how much is used. They are also active in the local co-operative network, and are seen as a connector of different groups and organizations. Their involved membership is key to this outreach and media, benefitting from a diverse group of people and expertise available to the community.

OREC’s goal is to offer competitive long-terms commitment returns for their projects, ensuring that their members’ money is invested both profitably and yet rooted in social and ecological imperatives related to sustainable community development. OREC currently has 7 solar rooftop projects, including five 10 kilowatt (kW) solar power projects on the rooftops of non-profit or co-op housing buildings across Ottawa, a 75 kW project on the roof of Samuel Genest School, and now 50% of a 250kW solar rooftop project on a storage facility in the Dunrobin area.

Each of the projects feeds power to the Ottawa electricity grid under already approved feed-in tariff contracts with the Ontario Power Authority (OPA). The projects include:

Better Living Housing Co-op
This 10-kilowatt solar system on the roof of Better Living Housing Co-op was connected to the electrical grid on December 27 in the middle of a snow storm.

Eileen Tallman Housing Co-op
Eileen Tallman Co-operative is located in Ottawa’s west end.

Coopérative d’habitation Lafontaine
Co-operative d’habitation Lafontaine has always been dedicated to environmental issues since its inception and has prioritized installing solar panels on their rooftops helping to generate income for their co-op.

Presland OCISO Non-profit Housing
OCISO Non Profit Housing provides affordable housing for a diverse community. On Earth Day, April 22, 2013, OCISO Presland became one of Ontario’s leading examples of solar energy use by mounting two solar PV systems on the North and South housing blocks.

Dunrobin Storage Facility
This is the OREC’s largest project to date, it is located on the roof of a large boat storage facility in rural west Ottawa: a 250 kW installation of 1140 panels, which will help power the nearby high school and subdivision. The storage facility is located within the City limits, near the village of Dunrobin. The 20,000 square-foot building was constructed in the fall of 2012.

Samuel Genest School
Samuel Genest French Catholic high school’s rooftop solar energy system began producing electricity in May 2014. The project also serves as a demonstration project and paves the way for community members to invest in the future of the students and school. In June 2014, The Conseil des écoles catholiques du Centre-Est and the Ottawa Renewable Energy Co-operative will be celebrating the inauguration of this project, a first community-owned solar project on a school in Ottawa (a 75 kilowatt solar project).

OREC is now preparing its third Preference Share offering for the next round of projects.

Strategic Questions

1. Would it be beneficial for other provinces in Canada to implement Feed in Tariffs similar to Ontario’s Feed in Tariff and Nova Scotia’s Community Feed in Tariff Program?
2. Can small, medium and large Canadian municipalities benefit from investing in their grid to increase capacity for small-scale renewable inputs?
3. What would it take to scale up and out OREC’s model across the country?

Resources and References

Birchall, J. & Ketilson, L. H. (2009). Responses to the global economic crisis: Resilience of the cooperative business model in times of crisis [Brochure]. International Labour Office, Sustainable Enterprise Programme. Geneva.

Bond, J.K., Carter, C. A. & Sexton, R.J. (2009). A study in cooperative failure: Lessons from the Rice Growers Association of California. Journal of Cooperatives, 23, 71-86.

Brown, L.H. (1997) Organizations for the 21st century? Co-operatives and “new” forms of organization. The Canadian Journal of Sociology, 22(1), 65-93.

Canadian Co-operatives Association. (n.d.). Co-op facts and figures. Retrieved December 12, 2010, from http://www.coopscanada.coop/en/about_co-operative/Co-op-Facts-and-Figures

Canadian Wind Energy Association (2013).Customer Bill Impacts of Generation Sources in Ontario. Retrieved January 24th, 2014 from http://www.canwea.ca/pdf/Customer-Bill-Impacts-of-Generation-Sources-in-Ontario.pdf

Christianson, R. (2007). Co-operative development in a competitive world. Retrieved June 26, 2017 from: http://www.wind-works.org/coopwind/Co-operative%20Development%20in%20Competitive%20World%20Christianson.pdf

Climate Progress (2009-2010). Retrieved January 26th, 2014 from: http://www.ene.gov.on.ca/stdprodconsume/groups/lr/@ene/@resources/documents/resource/stdprod_085413.pdf

Cole, L., Herbert, Y., McDowall, W. & McDougall, C. (2010). Co-operatives as an antidote to economic growth. Sustainability Solutions Group.

Community Power Fund (2014). Case Studies. Retrived January 25th 2014 from: http://cpfund.ca/capacity-building/case-studies [website no longer active]

Dale, A. (submitted). Introduction. In B. Duschencko, P. Robinson & A. Dale (Eds.), Urban sustainability: Reconciling place and space. Toronto: University of Toronto Press.

Dale, A. (2001). At the Edge: Sustainable Development in the 21st Century. Vancouver: UBC Press.

Dale et al. (2012). Action Agenda: Rethinking Growth and Prosperity. Action Agenda for Sustainable Prosperity. Royal Roads University, November 30th 2012.

Dale, A. and L. Newman (2008). Social capital: A necessary and sufficient condition. Community Development Journal, doi:10.1093/cdj/bsn028.

Dale, A., & Newman, L. (2009). Sustainable development for some: “Green” urban development and affordability. Local Environment, 14(7), 669-683. [Reprinted in Mandarin in Urban Insight.]

Financial Services Commission of Ontario. Retrieved February 7th, 2014 from: http://fsco.gov.on.ca/en/coops/Pages/default.aspx

Gertler, M. E. (2004). Synergy and strategic advantage: Cooperatives and sustainable development. Journal of Cooperatives, 18, 32-46.

Herbert, Y., Cole, L., Hardy, K., Lavallee-Picard, V. & Fletcher, A. (2010). Literature review: Cooperatives and the green economy. Sustainability Solutions Group.

IPCC Climate Change 2013: The Physical Science Basis. IPCC Working Group | Contribution to AR5 (2013). Retrieved January 24th 2014 from: http://www.climatechange2013.org/

Jones, D. C. & Kalmi, P. (2008). Trust, inequality and the size of co-operative sector: Cross-country evidence. Annals of Public and Cooperative Economics, 20(2), 165-195.

Lazar, Jim and Xavier Baldwin (2011). From RAP “Valuing the Contribution of Energy Efficiency to Avoided Marginal Line Losses as Reserve Requirements”. Retrieved May 9th, 2014 from: http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CE8QFjAD&url=http%3A%2F%2Fwww.raponline.org%2Fdocument%2Fdownload%2Fid%2F4537&ei=YdlwU9_iA5apyATomoCwBg&usg=AFQjCNF7dFCIJgs76lIYWkWzX0WWGzX6rQ&sig2=vZIqRIaW1hI_tCo3iVqj7g&bvm=bv.66330100,d.aWw

Leslie, Keith (2013). OPG’s rate hike for nuclear power adds burden to Ontarians’ energy bills, critics warn. The Globe and Mail. Retrieved January 26th, 2014 from: http://www.theglobeandmail.com/news/politics/opgs-rate-hike-for-nuclear-power-adds-burden-to-ontarians-energy-bills-critics-warn/article15396050/

Levi, Y. & Davis, P. (2008). Cooperatives as the “enfants terribles” of economics: Some implications for the social economy. The Journal of Socio-Economics, 37, 2178-2188.

Lotti, R., Mensing, P. & Valenti, D. (2006). A Cooperative Solution. Strategy + Business, 43.

Majee, W. (2008) Cooperatives, the brewing pots for social capital! An exploration of social capital creation in a worker-owner homecare cooperative. Milwaukee, WI: University of Wisconsin, Milwaukee.

Ministry of Ontario (2013). Retrieved January 24th, 2014 from: http://www.ene.gov.on.ca/environment/en/category/climate_change/index.htm

Ministry of Ontario (2014). Ministry of Ontario Long Term Energy Plan. Retrieved January 24th, 2014 from http://www.energy.gov.on.ca/en/ltep/

National Geographic Daily news. (2013) Available from: http://news.nationalgeographic.com/news/energy/2013/05/130510-earth-co2-milestone-400-ppm/

Newman, L. & Dale, A. (2008). Limits to growth rates in an ethereal economy. Futures, 40(3), 261-267.

Novkovic, S., 2006. Co-operative business: The role of co-operative principles and values. Journal of Co-operative Studies, 39 (1), 5–16.

Ottawa Renewable Energy Cooperative (2014). Retrieved January 24th, 2014 from: http://ottawarenewableenergycoop.com/

Robinson, J. & Tinker J. (1997). Reconciling ecological, economic and social imperatives: a new conceptual framework. In T. Schrecker (Eds.), Surviving Globalism: Social and Environmental Dimensions. London: Macmillan.

Roseland, M. (1999). Natural Capital and Social Capital: Implications for Sustainable

Community Development. In J. Pierce & A. Dale (Eds.), Communities, Development and Sustainability across Canada (pp190-207). Vancouver: UBC Press.

US National Research council (2010). Retrieved January 24th 2014 from: http://www.epa.gov/climatechange/science/future.html

Wieg, Andreas (2013). Please in my Backyard: How renewable energy cooperatives advanced citizen involvement in the Germany energy transition. Henrich Boll Foundation. Retrieved January 24, 2014 from: https://us.boell.org/2013/12/19/please-my-backyard-how-renewable-energy-cooperatives-advanced-citizen-involvement-german

¹ Community Research Connection (2014). Business Leaders. Retrieved April 7th, 2014 from: /crc-blog/business-leaders

² Energiewende (2014). Retrieved May 21 2014 from: http://energytransition.de/

³ Ottawa Renewable Energy Cooperative (2013). Retrieved January 26th, 2014 from: http://ottawarenewableenergycoop.com/faq/about-feed-in-tariffs/

⁴ Energiewende (2014). Retrieved May 21 2014 from: http://energytransition.de/

⁵ Ibid.

⁶ Dale et al. (2012). Action Agenda: Rethinking Growth and Prosperity. Action Agenda for Sustainable Prosperity. Royal Roads University, November 30th 2012.

⁷ National Geographic Daily news (2013). Retrieved January 24th 2014 from: http://news.nationalgeographic.com/news/energy/2013/05/130510-earth-co2-milestone-400-ppm/

⁸ Examples of these cycles include increased water vapour in the atmosphere, loss of sea, permafrost degradation and ocean acidification.

⁹ IPCC Climate Change 2013: The Physical Science Basis. IPCC Working Group | Contribution to AR5 (2013). Retrieved January 24th 2014 from: http://www.climatechange2013.org/

¹⁰ Ontario Ministry of the Environment (2013). Retrieved January 26th, 2014 from: http://www.ene.gov.on.ca/environment/en/category/climate_change/index.htm

¹¹ Climate Progress (2009-2010). Retrieved January 26th, 2014 from: http://www.ene.gov.on.ca/stdprodconsume/groups/lr/@ene/@resources/documents/resource/stdprod_085413.pdf

¹² Ottawa Renewable Energy Cooperative (2013). Retrieved January 26th, 2014 from: http://ottawarenewableenergycoop.com/faq/about-feed-in-tariffs/

¹³ Ottawa Renewable Energy Cooperative (2013). Retrieved January 26th, 2014 from: http://ottawarenewableenergycoop.com/faq/about-feed-in-tariffs/

¹⁴ For further details on the province’s future energy targets, please visit the Ontario Ministry of Energy’s website: http://www.energy.gov.on.ca/en/ltep/#.Uz1wwOddVQM

¹⁵ Community Research Connection (2014). Stopping the Myths. Retrieved April 7th, 2014 from: /crc-blog/stopping-myths

¹⁶ Lazar, Jim and Xavier Baldwin (2011). From RAP “Valuing the Contribution of Energy Efficiency to Avoided Marginal Line Losses as Reserve Requirements”. Retrieved May 9th, 2014 from: http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CE8QFjAD&url=http%3A%2F%2Fwww.raponline.org%2Fdocument%2Fdownload%2Fid%2F4537&ei=YdlwU9_iA5apyATomoCwBg&usg=AFQjCNF7dFCIJgs76lIYWkWzX0WWGzX6rQ&sig2=vZIqRIaW1hI_tCo3iVqj7g&bvm=bv.66330100,d.aWw

¹⁷ Financial Services Commission of Ontario. Retrieved February 7th, 2014 from: http://fsco.gov.on.ca/en/coops/Pages/default.aspx

Rob Newell, Research Associate, Royal Roads University
Ann Dale, Canada Research Chair in Sustainable Community Development, Royal Roads University
Published November 27, 2013

You get what you measure. Measure the wrong thing and you get the wrong behaviors.
~ John H. Lingle

Case Summary

The Peg community indicators system was developed to measure the well-being and community vitality of the City of Winnipeg. The name was selected for its dual meaning, being a common local term for Winnipeg and also referring to ‘pegging’ the specifics of and solutions to community monitoring. Peg categorizes community indicators into eight themes – basic needs, health, economy, natural environment, built environment, governance, education and learning, and social vitality. The system also identifies an additional category of poverty as being a cross-cutting issue that spans across the other themes. Its online user-interface allows a user to explore indicators in each of the themes and access related data and information. Data can also be accessed through an interactive map tool that provides geographical referencing and context to the information. In addition, Peg contains a ‘stories’ section that provides personal accounts of Winnipeg locals’ experiences with the indicators, that uses narratives as a method of providing greater meaning to abstract data (Avraamidou & Osborne, 2009).

The concept for a Winnipeg-based community indicators system began to coalesce in the late-1990s when the local United Way conducted a community engagement process entitled Journey Forward that examined key social issues in the community (United Way of Winnipeg, 2000). This process prompted considerations and questions about the key social issues in Winnipeg and how they be identified and addressed. The outcome of these considerations and questions was an agreement on the necessity to develop a community indicator system that effectively and comprehensively tracks the well-being of Winnipeg residents. In 2003, the United Way approached the International Institute for Sustainable Development (IISD) to discuss working together in developing a system for Winnipeg, and the two organizations subsequently have led the development process over the last decade.

In order to ensure the community indicators system accurately represents the comprehensive needs and interests of Winnipeg at-large, the United Way and IISD developed Peg through a highly inclusive and participatory process. Peg’s development has involved the input of all sectors of the community contributing to the project in various capacities, including guidance and direction on Peg’s development, involvement in the indicator selection process, advising on community engagement and public relations, technical expertise, and assisting in obtaining data and relevant information.

The United Way and IISD conducted a ‘soft launch’ of Peg in 2010, marked by a presentation to the Winnipeg Poverty Reduction Council (WPRC, 2010). Currently, a beta version of the Peg website (mypeg.ca) is publicly accessible, and the United Way and IISD plan to launch the official, complete Peg system in early December 2013. Their long-term goal is that PEG will become fully integrated into the City of Winnipeg’s infrastructure as a system for measuring community performance and vitality, educating the public on the issues facing Winnipeg, and informing effective and comprehensive local decision-making.

Sustainable Development Characteristics

There are several drivers that have motivated the development of community-oriented tracking systems. Often mentioned are the shortcomings of conventional measures that rely solely on material and economic data, chief among them is the much-critiqued GDP (Barbier, 2012; Dhlakama & Schiff, 2011; White, 2013).

Increasingly, policymakers are recognising that the pursuit of economic growth, as measured by GDP, is not taking into account the full picture of wellbeing. Broader metrics are required to understand social progress and wellbeing, which take into account environmental harm and social issues. The establishment of the “Beyond GDP” initiative under the sponsorship of the European Commission and the OECD¹ and President Sarkozy’s Commission on the Measurement of Economic Performance and Social Progress² are clear evidence that governments are now taking seriously the idea that growth alone is not enough, and that narrowly defined economic measures of social benefits are insufficient for a sustainable prosperity.

In the last twenty years, many efforts have been made to develop alternative measures that go beyond one-dimensional analysis and capture the complexity and diversity of factors that determine the shape of our communities. In addition, the sustainable development imperative (Dale, 2001) adds another new dimension to the need for more integrative indicators that reconcile the ecological, social and economic imperatives of a community and yet, are concrete measurements.

Over the last few decades, community indicator projects have begun to emerge around the world that attempt to integrate ecological, social and economic measurements. They include long-running programs such as the Jacksonville Quality of Life Indicators established in 1985 (Swain & Hollar, 2003) and more recent initiatives such as Community Indicators Victoria (CIV), Australia (established 2007) (Cox, Frere, West, & Wiseman, 2010), and the City of Surrey Sustainability Indicators (established 2010) (City of Surrey, 2010). Typically, these community indicators systems are designed and developed to measure community performance and quality of life to help guide sustainable community development (Besleme & Mullin, 1997). A comprehensive set of community indicators can provide insights on the changes in local social, ecological and economic conditions and the complex relationships between these different dimensions of a community (Ramos & Jones, 2005). In turn, these insights can be used for more integrated local decision-making that accounts equally for the social and ecological imperatives.

Community indicator systems are designed to capture the cultural, social, economic and environmental conditions of their respective community, and thus every community indicator system is somewhat unique and place-based (Cox et al., 2010). Recent research and evidence points to the importance of place-based policy development (Bradford, 2013). Accordingly, local community indicators provide a comprehensive, integrated way to measure and capture data that is meaningful to a majority of its residents, and also reflect the sustainability of any particular community.

To address local problems, approaches to governance and sustainable development decision-making must also involve a diversity of stakeholders to ensure policies and decisions reflect the needs and interests of those affected by them (Chuenpagdee & Jentoft, 2009; Dale, 2001; Ling, Hanna, & Dale, 2009). Similarly, information guiding these decisions should be comprehensive and collected in an inclusive, participatory manner to adequately represent the appropriate diversity of interests (Dale et al., 2010; Trimble & Berkes, 2013; Goldman, 2011).

Critical Success Factors

Peg was developed through the leadership of two well-established organizations that brought different but complementary expertise and experience – the United Way of Winnipeg and the International Institute for Sustainable Development (IISD). The United Way contacted IISD because of their expertise in sustainable development research and their previous work on sustainability indicators (IISD, n.d.). As IISD brought the research expertise and knowledge to Peg, the United Way, a strongly networked organization, brought the necessary community contacts and experience in community engagement to build project partnerships and community collaboration. These two complementary functions ensured that Peg developed through expert knowledge of indicator systems and through the inclusion of many different community inputs and perspectives, contributing to the development of a comprehensive, integrated system ultimately accepted by a majority of community stakeholders.

The United Way and IISD were the main drivers of Peg’s development; however, the process was highly inclusive and participatory, involving all sectors in the community – public sector (mostly local government, but input did come from provincial and federal civil servants), academic (University of Winnipeg and University of Manitoba), business (represented by the Chamber of Commerce), and non-government organizations (NGOs). The United Way and IISD estimate that over 800 people were engaged through the course of the project. High-level guidance for Peg was provided by a steering committee that was assembled specifically to represent every sector of the city, and indicators were selected through diverse working groups to ensure that (as much as possible) all aspects of community well-being were equally considered. In addition, the general public was invited to provide feedback on the indicator selection process through social media, such as Facebook. This inclusivity allowed the PEG indicator system to be developed ‘by the community and for the community’, a first in Canada.

This inclusion also ensured that its development was seen as and perceived to be apolitical, nor driven by a single agenda. Similarly, diverse funding sources also demonstrated non-partisanship and majority representation in developing the indicators. In some circumstances, involving a diverse set of perspectives led to potential conflicting priorities and perspectives, and this lengthened the development process (although no indication was given in this research that discussions ever became emotionally argumentative). However, the development of a comprehensive community indicators system requires inclusive representation from the community, and deliberative discourse involving differing opinions is thus necessary for capturing diverse perspectives (Dale & Newman, 2006).

United Way’s and IISD’s continual leadership, commitment and collaboration were required for Peg to come into fruition. Ensuring that the community indicators system is comprehensive, integrative and sufficiently represents the needs and concerns of the community requires high levels of continuous input and a large amount of data, thus it can be a slow, lengthy process. The concept of Peg began in the early 2000s and has developed progressively since that time. Its success, thus, hinged on the commitment of the initiative’s driving organizations (the United Way and IISD) to ensure the system was being built and community partners were continually engaged. Although the development of Peg has experienced periods of lowered activity, the United Way and IISD both have maintained involvement and interest in Peg for the majority of last decade, and their perseverance has built momentum and sustained a large and diverse network of actors around the indicator system. Novel network formation is particularly necessary for social innovation and for the implementation of sustainable community development (Newman and Dale, 2007).

Community Contact Information

Heather Block
Director, Strategic Initiatives
United Way Winnipeg
580 Main Street, Winnipeg, Manitoba
R3B 1C7
hblock@unitedwaywinnipeg.mb.ca
http://unitedwaywinnipeg.ca

Charles Thrift
Project Manager
IISD's Head Office
161 Portage Avenue East, 6th Floor
Winnipeg, Manitoba, Canada
R3B 0Y4
cthrift@iisd.ca
http://www.iisd.org

What Worked?

The development of Peg was a lengthy process; however, the carefully thought-out and deliberate planning has contributed to its wide acceptance by the City. The initial stages involved addressing the philosophical considerations of developing a Winnipeg-based community indicator system, which included determining what it means to be a ‘Winnipegger’ and what makes a meaningful indicator of the well-being of Winnipeg residents. Dedicating effort to address such considerations ensured that Peg has the appropriate uniqueness and relevance to Winnipeg that is necessary for a successful community indicator system (Cox et al, 2010), and it captures the place-based characteristics of the community. People can ‘see’ themselves reflected in the indicators.

The indicator selection process was equally as deliberate and carefully thought-out, as it was designed to capture a comprehensive set of interests and perspectives. Indicators were selected through extensive research and the input of eight working groups, which were each assembled for their expertise and insights on a particular theme or indicator. The selection process also included public feedback (via social media) to ensure key aspects, concerns and considerations were not overlooked. In addition, the process of developing the community indicator system was conducted with the guidance of a 15-person steering committee and advisory groups (on communications and marketing, community engagement, community stories, and technical aspects of the project) that represented diverse sectors and perspectives. Involving a multitude of interests and perspectives in Peg did have at times a decelerating effect on the process in terms of having “too many cooks in kitchen” (personal communication, July 4, 2013); however, it built the social capital necessary for an effective sustainable community development strategy (Dale & Newman, 2010). Therefore, albeit Peg’s development was a slow and lengthy process, the vast and diverse amount of input and perspectives was essential for its penultimate acceptance by community members.

Another strength was that it deliberately maintained a non-political, non-partisan process. The fact that Peg was both funded through multiple sources, and the input of a comprehensive set of interests and perspectives ensured that the indicator system developed without undue emphasis on particular types of indicators and metrics, for example, privileging traditional economic measures. Consequently, the set of indicators was selected to (as accurately as possible) represent the needs and interests of the entire community, rather than reflect the agenda of a specific group, organization, and / or sector.

What Didn’t work?

Developing a community indicator system is a complex and involved process, and thus contains considerable challenges. One of the challenges facing Peg is determining how to maintain its longevity and (coincidently) the ideal destination and organizational structure for long-term stewardship of the system. The United Way and IISD would ideally like to see Peg become fully integrated into Winnipeg’s system of accounts; however, certain considerations for achieving this have yet to be addressed. In particular, how the system will be funded and sustained has yet to be determined, and, contributing to this uncertainty, the City of Winnipeg discontinued its financial support to Peg in 2013 (although it still provides in-kind support). The future leadership and ownership of the system has yet to be decided; therefore, Peg is vulnerable to becoming a system operated with a specific agenda if it becomes primarily supported by a single organization. Its future sustainability will be compromised if it is not embedded into the City’s existing infrastructure.

Peg also experienced challenges in the development of its user-interface. The user-interface was designed to capture complex relationships and illuminate meaningful insights from large data sets. This required novel technologies and labour-intensive processes that presented several difficulties. For example, data sets for the indicators were often incomplete and longitudinal data (comprising significant periods of time) was difficult to obtain. In addition, the novel and complex nature of the technology has caused difficulties in terms of transferring knowledge about how to service and support the user-interface, and this can be a source of concern considering the ultimate destination and stewardship of Peg is still uncertain. Furthermore, because the user-interface is novel and experimental, precedents were not available for some of the features and thus some features did not work and operate as envisioned. In particular, the stories aspect of Peg was designed to provide narratives, which can add meaning to abstract data (Avraamidou & Osborne, 2009); however, currently, the stories and data mostly exist as separate entities on the website and their linkages are not as strong as originally envisioned.

Financial Costs and Funding Sources

Specific financial costs for Peg are difficult to ascertain for several reasons. Firstly, the concept emerged from a previous project (Journey Forward), and the conceptual development occurred over a few years without specifically allocating a budget for this discussion and development process. Secondly, Peg’s development relied heavily on in-kind participation, as the 15-person steering committee, different advisory groups (of 6 to 24 people each) and eight indicators working groups consisted of voluntary members, and the United Way and IISD estimate they have engaged approximately 800 people over the course of the project. Peg also received significant in-kind contributions from Health in Common, which included one day per week of a staff member’s time to work on the project and staff members’ participation in the steering committee and indicators working groups. Thirdly, Peg was specifically designed to have a non-political, non-partisan agenda, and thus funding from the project was secured through a diverse set of financial pots and contributions. Project financing included (but was not limited to) donations from Winnipeg Regional Health Authority, Investors Group, Great-West Life Assurance Company, Assiniboine Credit Union, local and provincial government grants, contributions from partner NGOs, and from United Way’s operations budget.

For the recent years of Peg’s development (i.e., past the conceptual stages), costs for the development of the indicator system, the database, the Peg website and interface technology were broadly estimated to be over $100,000 per year. Significant expenses were associated with the development of the interface technology, i.e., the tool that allows a user of the system to explore indicators and access relevant data. It is important to note that the estimated figure represents approximate expenses of the project; however, it does not capture the numerous hours of in-kind support and community involvement that was essential for its development.

Research Analysis

Data collection for this research involved semi-structured interviews with 13 interviewees. The leading organizations in Peg’s development, the United Way and IISD were well sampled in the interviewee selection process (8 interviewees). Interviews were also conducted with four members of the steering committee members and the designer of the user-interface technology.

Since the project has been ongoing for over a decade, interviewees were selected from people involved in the initial stages of the project and those more recently involved in the project. Designing the interviewee list this way ensured that the historical perspective was captured, as well as its current status and future directions.

Data was analyzed to develop an accurate picture of how the indicators were identified, its operations, the design and development of the system, as well as the future plans and, its historical development. In addition, data analysis identified the key elements and challenges of designing and implementing a community indicator system. We also analyzed the transferability of this model to other Canadian communities.

Detailed Background Case Description

The discussions and ideas behind Peg began in the late-1990s with the United Way’s work on the Journey Forward project. The objective of Journey Forward was to gain insight on the critical social issues that were affecting Winnipeg and its residents through a citywide community engagement process. In 1999, the United Way widely distributed a public survey on concerns for social issues by partnering with over 30 local organizations that delivered the survey to their employees, publishing the survey in the Winnipeg Free Press (and allowing people to respond online), and mailing surveys out to over 120,000 residents (United Way of Winnipeg, 2000). The survey asked locals to identify and prioritize what they believe to be imperative social issues from a list of 26 by selecting their top five issues and then their next five issues of concern (ibid).

Journey Forward received 2,802 responses, generated from a wide range of different views and perspectives across the city (United Way of Winnipeg, 2000). The United Way recognized that the response rate was such that the sample might not be statistically representative of Winnipeg as a whole; however, responses did represent a diversity of views and thus the survey provided insights on key target areas. In particular, youth crime, gang activity, violence and abuse among families and within neighbourhoods were prevalently noted as areas of concern (ibid). The results from this survey stimulated thinking about what the specific critical social issues in Winnipeg, what aspects of these issues should be addressed, and what actions could address them.

In November 2000 (following the Journey Forward project), the United Way held a forum, entitled The Willing Community, that brought together different sectors of Winnipeg to continue the exploration and discussion on the social issues facing the community (United Way of Winnipeg, 2000). During the discussion, there was a strong recognition that key social issues had been prevalent in Winnipeg for some time (particularly poverty and marginalization), and they needed addressing. However, the forum also recognized that, in order to implement effective programs and projects for addressing these issues, a system for monitoring and measuring whether these issues are increasing or diminishing in prevalence must be established (ibid). This consideration prompted the idea of developing a social indicators system, which became the foundation for the Peg project.

In 2003, the United Way connected with IISD to partner with them on the development of a community indicators system, particularly because of IISD’s expertise in sustainable development research and previous work with indicator systems (IISD, n.d.). The two organizations began the process by engaging in the more ‘philosophical’ considerations of the project, including what is the definition of ‘community, what is considered a ‘meaningful indicator’, and what does it mean to be a ‘Winnipegger’. The results of these discussions showed a need for a system that recognizes the interconnectedness of social, economic and environmental issues in order to engage in meaningful and insightful analysis on the well-being of Winnipeg residents, as opposed to simply developing a set of isolated metrics in where each metric provides one-dimensional information of interest to specific sectors or organizations.

In 2005, the United Way and IISD drafted a business plan that was used to formulate an operational strategy for a community indicators system in Winnipeg. The business plan provided the history and thinking behind a Winnipeg-based community indicators system, the vision and key aspects of the system, and a potential budget (IISD & United Way of Winnipeg, 2005). The plan called for the creation of a new organization, based on the visions, goals and values of Peg, to assume governance of the community indicator system (ibid); however, this was not realized. In 2006, the project development was put on hold as the United Way became occupied with building the Winnipeg Poverty Reduction Council (WPRC). Outcomes of the WPRC reignited interest in Peg as it highlighted once again the need for access to information to be able to accurately address issues in Winnipeg, particularly with respect to poverty. In 2008, the United Way and IISD again assumed leadership of Peg and began the development of system components, which included tasks such as selecting indicators, collecting data and information, developing the various ways to present quantitative and qualitative information, and creating Peg’s user-interface.

The community indicator selection process began in 2009, and the process was guided by extensive research and input from the Peg steering committee, an advisory group called the ‘Engagement Group’, and indicators working groups. The steering committee was selected by the United Way and IISD, included representation from Canadian Community Economic Development Network, Health in Common, the City of Winnipeg, the Winnipeg Chamber of Commerce, the Winnipeg Regional Health Authority, the Winnipeg Poverty Reduction Council, the University of Winnipeg, the Centre for Indigenous Environmental Resources, the Manitoba Centre for Health Policy (University of Manitoba), Assembly of Manitoba Chiefs, the Province of Manitoba, and the Government of Canada Western Economic Diversification. This committee helped identify key people to involve in the Engagement Group and indicator working groups. The initial indicator selection process began with one group engaging in an in-depth exploration of indicators specifically around the issue of poverty, as much of the thinking that spurred Peg’s development focused on this issue. Following this initial exploration, eight indicator themes were identified through research and discussion with the Engagement Group, and these themes were basic needs, health, economy, natural environment, built environment, governance, education and learning, and social vitality. Indicators were selected for each theme by assembling a working group for each theme (involving people from the initial working group and adding others), based on people’s knowledge in certain thematic area (i.e., a representative from the Winnipeg Regional Health Authority with knowledge related to the indicator theme of health). Thematic indicator selection was designed as a three-meeting process (although one-on-one conversations and meetings outside of the indicator selection design did occur to finalize and fine tune certain details). The first meeting would begin with an overview of Peg and its objectives, and then the group would be presented with a list of approximately 50 potential indicators, generated through research conducted by IISD prior to the meeting. Between the first and second meeting, the group would discuss and narrow down the list to approximately 12 to 20 indicators. In the final meeting, a list of approximately 12 was finalized, and the rationale for the particular selection was reviewed.

To effectively use Peg for measuring community performance, a novel online user-interface was constructed using software designed by Structure Dynamics and a website developed by Tactica. The user-interface mechanics were based on Structured Dynamics’s open systems framework (OSF), which consists of layered architecture and modular software (Bergman, n.d.). Within this framework, a set of structured assets were built, known as ontologies, and these components defined the conceptual domains and relationships within the system. The conceptual linkages used to build the ontologies were identified by IISD, and Structure Dynamics used these for creating a framework that links data sets, information and different components of the Peg site. Data and information are accessed through the website via semantic components, which are widgets that present information in various ways including interactive visuals, maps and browse / search features (Bergman, 2010). The Peg website also contains stories and video narrative features that provide personal accounts from Winnipeg residents and their experiences with various issues relating to the indicators. The stories were developed to add meaning and context to abstract data, and the stories section is equipped with a story viewer semantic component, which allows Peg users to view indicators the story relates to and access other stories associated with said indicators.

A beta version of the Peg website and user-interface was launched in 2010, that contained a collection of stories, an interactive map, and indicators identified under the cross-cutting theme of poverty. As a part of this ‘soft launch’, the United Way and IISD presented the development process, function and purpose of Peg to the WPRC (WPRC, 2010). The launch of the beta version of Peg has allowed the United Way and IISD to continue to develop the indicator system and user-interface with the guidance of user feedback, allowing them to better identify areas for improvement. For example, the beta version of Peg presents the stories section and data components in a separate fashion, when the original intention of developing the stories aspect was to add meaning and context to data. Since the ‘soft launch’, the United Way and IISD have been strengthening Peg and its user-interface, while also working to complete the system by finalizing the indicator themes.

Peg has not undergone a formal, official public launch as the system is still in beta phase and under development; however, many different organizations, sectors and individuals in Winnipeg are now aware of the project because of its highly inclusive and participatory development process. In addition to the indicator working groups, organizations and institutions participated in Peg’s development through a series of advisory groups and consultation processes, and, through these, Peg received advice and aid on different aspects of its development, including engagement with community organizations, marketing and communications (i.e., dealing with sensitive issues), development of Peg’s stories component, and learning and operating the technology driving the user-interface.

The official launch of Peg will be announced on December 3, 2013. This event will be held in the United Way’s offices, and invitees will consist of leaders from local NGO, municipal government (staff and elected officials), business leaders, and the local universities. In addition, unlike Peg’s soft launch, representatives from local media will be invited for the purposes of publicizing Peg and its website. Following the launch, the United Way and IISD plan to release studies on the indicators over the next year, continually adding stories and video narratives, and release annual ‘report cards’ on findings derived from the indicator system (United Way of Winnipeg, 2013).

The future objective for Peg is that it will become an integral part of the city accounting and reporting infrastructure. Integrating PEG into the traditional reporting system will then expand its metrics and allow the city to assess its progress towards becoming more sustainable and changing development paths. However, incorporating Peg into Winnipeg’s community infrastructure is at this time uncertain, as the long-term governance of and funding for the system has yet to be decided.

A critical consideration for any community indicator system is that it must be relevant to the local community. Therefore, although technical aspects (such as the user-interface and system components) of Peg are transferable to other communities, ultimately a community will need to ask questions about what are the issues their communities face, what is a meaningful local indicator, and what does it mean to be a local (i.e., what is the community identity). In addition, the Peg development process has demonstrated the importance of engaging and involving community members in order to develop a comprehensive set of indicators, and thus engagement will differ from community-to-community depending of the local relationships and cultural contexts. In essence, a community indicators system needs to be developed by the community to be integrally indicative of the community.

The city of Winnipeg stands on the cusp of being a leading innovator and the first city in Canada to implement a comprehensive sustainable development indicator system. The system, however, is now highly dependent on becoming institutionalized within the municipal infrastructure to sustain the continuous accuracy, integrity and refinement of the system.

Strategic Questions

1. How does one ensure the long-term survival of a useful and relevant community indicator system?
2. What is the optimal model of governance for a community indicator system?
3. Can a community effectively progress and maintain their vitality without a community indicator system?

Resources and References

Avraamidou, L., & Osborne, J. (2009). The Role of Narrative in Communicating Science. International Journal of Science Education, 31(12), 1683–1707.

Barbier, E. (2012). Ecosystem services and wealth accounting. In UNU-IHDP and UNEP. Inclusive Wealth Report 2012. Measuring progress toward sustainability. Cambridge: Cambridge University Press.

Bergman, M. (n.d.). Domain-specific instantiations based on the open semantic framework. Report prepared for Structured Dynamics. Accessed from http://openstructs.org/sites/openstructs.org/files/docs/OSF.pdf

Bergman, M. (November 8, 2010). Peg community indicator system unveiled to enthusiasm: innovative Winnipeg project powered by SD Technology. Accessed from http://www.mkbergman.com/928/peg-community-indicator-system-unveiled/

Bradford, N. (2013). Neighbourhood revitalization in Canada: Towards place-based policy solutions. In Neighbourhood Effects or Neighbourhood Based Problems? (pp. 157-176). Springer Netherlands.

Besleme, K., & Mullin, M. (1997). Community indicators and healthy communities. National Civic Review, 86(1), 43–52.

Chuenpagdee, R., & Jentoft, S. (2009). Governability Assessment for Fisheries and Coastal Systems: A Reality Check. Human Ecology, 37(1), 109–120.

City of Surrey. (December 6, 2010). Corporate report to Mayor and Council. Prepared by Sustainability Manager and Deputy City Manager. Council date: December 13, 2010. File number: 0512-02

Cox, D., Frere, M., West, S., & Wiseman, J. (2010). Developing and using local community wellbeing indicators: Learning from the experience of Community Indicators Victoria. The Australian Journal of Social Issues, 45(1), 71.

Dale, A. (2001) At the edge: sustainable development in the 21st Century. Vancouver: UBC Press

Dale, A., Ling, C., & Newman, L. (2010). Community vitality: The role of community-level resilience adaptation and innovation in sustainable development. Sustainability, 2(1), 215-231.

Dale, A., & Newman, L. (2006). An online synchronous e-Dialogue: series on nuclear waste management in Canada. Applied Environmental Education and Communication, 5(4), 243-251.

Dhlakama, M. & Schiff, R. (2011). Developing a well-being and resiliency index for Happy Valley-Goose Bay in the context of rapid economic growth. Happy Valley-Goose Bay, NL: Labrador Institute of Memorial University

Newman, L., & Dale, A. (2007). Homophily and agency: creating effective sustainable development networks. Environment, Development and Sustainability, 9(1), 79-90.

Dale, A., & Newman, L. (2010). Social capital: a necessary and sufficient condition for sustainable community development?. Community Development Journal, 45(1), 5-21.

Goldman, M. J. (2011). Strangers in their own land: Maasai and wildlife conservation in Northern Tanzania. Conservation and Society, 9(1), 65.

IISD & United Way of Winnipeg. (March 30, 2005) A community indicators system for Winnipeg: working together to achieve and sustain a high quality of life for current and future generations. Draft business plan.

IISD. (n.d.). Compendium: a global directory to indicator initiatives. International Institute for Sustainable Development (IISD) website. Accessed from http://www.iisd.org/measure/compendium/

Ling, C., Hanna, K., & Dale, A. (2009). A template for integrated community sustainability planning. Journal of Environmental Management, 44(2), 228-241.

Ramos, O. T., & Jones, K. (2005). Comprehensive community indicators systems. National Civic Review, 94(2), 74-77.

Swain, D., & Hollar, D. (2003). Measuring progress: Community indicators and the quality of life. International Journal of Public Administration, 26(7), 789-814.

Trimble, M., & Berkes, F. (2013). Participatory research towards co-management: lessons from artisanal fisheries in coastal Uruguay. Journal of environmental management, 128, 768–78. doi:10.1016/j.jenvman.2013.06.032

United Way of Winnipeg. (2000). Community voices: result of the public survey. Report prepared for the Journey Forward Initiative. Access from http://unitedwaywinnipeg.ca/wp-content/uploads/2008/02/public-survey.pdf

United Way of Winnipeg. (2000). The Willing Community: journey forward to the place we want. Report prepared for the Journey Forward Initiative. Access from http://unitedwaywinnipeg.ca/wp-content/uploads/2012/06/UW-JourneyForward-WillingCommunity-2000.pdf

United Way of Winnipeg. (2013). The Public Launch of Peg – December 3, 2013. Internal document.

White, M. D. (2013). The pursuit of a measure of happiness. Review of Social Economy, 1-6.

WPRC. (2010). Winnipeg Poverty Reduction Council: a report on activities, July 2008 – June 2010. Accessed from http://www.wprc.ca/wp-content/uploads/2010/11/WPRC.ReportActivities08-10.pdf

¹ European Commission. Beyond GDP - Measuring progress, true wealth, and the well-being of nations. http://www.beyond-gdp.eu/
² Commission on the Measurement of Economic Performance and Social Progress. http://www.stiglitz-sen-fitoussi.fr/en/index.htm

Deborah Pearson, RRU Master of Arts in Environment and Management Candidate
Ann Dale, Canada Research Chair in Sustainable Community Development, Royal Roads University
Published January 21, 2013

Case Summary

In Canada, recycling and composting is used to divert municipal solid waste (MSW) from entering landfills and incinerators and to improve the sustainability of waste management. This directly contributes to sustainable development by preventing toxins from entering the environment, maximizing the use of raw materials, reducing the footprint of landfill areas and conserving the energy used in the harvest of virgin raw materials for additional consumer products. Many programs have been unable, however, to achieve waste reduction targets, and the per capita volume of waste continues to increase in all provinces except Nova Scotia (Statistics Canada, 2012). This case study examines an innovative, comprehensive, and province-wide waste management strategy in Nova Scotia, and addresses the question: how effective are recycling and composting programs for achieving sustainable waste management strategies?

Sustainable Development Characteristics

The production of waste is a commonality of all species on the planet. In the life cycle of animals and plants, the use or consumption of products for survival, and the output of waste are in balance and naturally sustainable; output from one species provides input for another species. Natural systems produce virtually no waste. At one time, the volume of waste generated by the human species may have been sustainable, however today, as human populations expand around the globe and economic growth increases the consumption of products, the volumes of waste are rising significantly.

Each opportunity we have to reduce our impacts on the planet is a step forward towards the implementation of sustainable development. Recycling reduces the need for virgin resources and using recycled content in manufacturing new products conserves energy. The energy required in the manufacture of products from recycled materials is substantially less than the energy required if the same product was manufactured from virgin materials. In addition, products made from recycled content forgo the pollution or environmental degradation that would occur during the harvest of virgin materials. Recycling products at the end of their first life cycle maximizes and fully realizes the benefit of the initial harvest of virgin resources.

Critical Success Factors

1. Mandatory recycling and composting provincial legislation.
2. The province’s programs are inclusive, providing a high level of recycling and composting services to all communities including small and rural communities.
3. Nova Scotia’s model is a closed-loop system that includes the collection of materials through to the manufacture of new products.
4. Sufficient funding committed to implement the collection and sorting of materials, develop infrastructure, and provide incentives to develop markets.
5. Integrated community engagement strategy with phased implementation of recoverables to allow for greater adoption and adaptation.
6. Extensive education and communications program to encourage comprehensive adoption.

What Worked?

In 1995, the provincial government adopted a comprehensive province-wide waste management strategy, and by 2000, was the first province to achieve the national waste reduction target of 50%. The Government of Nova Scotia’s strategy involved an extensive collaborative effort province-wide between government, stakeholders, municipalities and the public, which resulted in a high level of buy-in and acceptance of mandatory recycling legislation.

A management framework was created to implement the strategy consisting of the Resource Recovery Fund Board (RRFB), the Regional Chairs committee, and seven waste management regions based on demographics and waste capacity. The RRFB, a non-profit organization, was responsible for planning province-wide waste diversion education and awareness programs, promoting local markets and the development of value-added manufacturing programs using recycled goods. New local employment opportunities arose province-wide in the value-added industries created through the waste management strategy.

The strategy focused on a maximum diversion of waste through mandatory recycling for an array of recyclables including yard waste and organics. The implementation was phased in over a number of years, allowing the public and businesses to adapt over time.

What Didn’t Work?

Up until 1990, Nova Scotia’s waste reduction rate was similar to other provinces where provincial spending on waste management varies, as do the types of programs offered, and more importantly, responsibility is at the municipal level.

Financial Costs and Funding Sources

In Nova Scotia, funding for recycling and composting programs is primarily through municipal property taxes and tipping fees, however, a percentage is provided by a “half-back” program on non-dairy beverage containers, which is essentially a tax levied on all beverage containers. For example, the consumer pays 10 cents per 500ml container and receives 5 cents back when containers are returned. A portion of the tax levied is used to fund depots handling the containers and a portion (25%) is used to fund other waste management strategies such as municipal programs, processing facilities, transportation of recycled materials and education awareness programs. The RRFB manages the funds and apportions them to municipalities based on the volume of recovered materials, which can represent 7 to 15% of the municipality’s annual waste management budget. In 2005, the RRFB provided $8.2 million to the municipalities in Nova Scotia to offset recycling and composting costs and $1.46 million was directed towards public awareness programs. Over the past decade, $6.5 million in funding has been used in marketing strategies, development of new products, services, and equipment pertaining to the recovery of materials.

Research Analysis

This case study explores the environmental, economic and social aspects of municipal waste diversion of recycling and composting programs, through an extensive literature review and government documents available on their websites. The case study investigates the effectiveness of Canadian recycling and composting programs in diverting MSW and analyzes the potential barriers that impede the effectiveness of recycling and composting programs.

Detailed Background Case Description

The World Bank’s recent study of global MSW reports that over the past ten years, urban populations increased from 2.9 billion to 3 billion, and MSW volumes doubled from .68 billion tonnes to 1.3 billion tonnes annually (World Bank, 2012). On an individual level, this represents an increase in MSW volume from .64 kg per person/day to 1.2 kg per person/day (World Bank, 2012). It is estimated that, by 2025, urban populations will increase to 4.3 billion and the estimated volume of MSW will rise to 1.42 kg per person/day, which equates to an annual global volume of 2.2 billion tonnes of MSW (World Bank, 2012). Traditionally, human waste has been collected and disposed of in landfills or in incinerators. These forms of disposal methods, however, degrade the environment by affecting the land, air and water quality, which in turn results in higher social costs and has the potential to cause adverse short and long-term health effects (Wagner & Arnold, 2008). As a result, more recent waste management strategies focus on environmental sustainability objectives and on reducing the amount of MSW handled through traditional disposal methods by encouraging activities such as recycling and composting.

For a number of decades, recycling and composting has been used in Canada to reduce the volume of MSW. Municipal solid waste refers to the complex mixture of daily waste generated from residential life, and includes everything from food scraps, packaging materials, grass and yard waste, newspapers, clothes, furniture and old computers (Statistics Canada, 2012). It also includes non-hazardous waste from industry, business and commercial sectors, institutions, and construction (Statistics Canada, 2012). In Canada, local governments such as regional districts and municipalities are responsible for managing their MSW including collection and transportation to disposal sites and are also responsible for managing waste diversion through recycling and composting programs (Environment Canada, 2012).

Recycling refers to the process of separating materials from the waste stream such as glass, plastic and paper, which can be processed into raw materials and manufactured into new products. In Canada, the number of recycling programs is increasing and is now a part of waste management practice in most communities (Statistics Canada, 2005). The volume of materials recycled in Canadian communities fluctuates annually and is dependent on economic factors such as population growth, consumption patterns, the market price of raw materials, the availability of markets for recyclable materials and the willingness of consumers to purchase products made from recyclable materials (Statistics Canada, 2005). As well, the volume of recycled materials depends on consumer behaviour and a number of variables are found to increase the intensity of recycling such as the convenience of recycling services and frequency of collection (Ferrara & Missios, 2005; Kaciak & Kushner, 2011). A number of studies demonstrate that waste disposal user fees have a positive impact on increasing the intensity of recycling (Allers & Hoeben, 2010; Ferrara & Missios, 2005; Thogersen, 2003) . User fees may also, however, increase illegal dumping of waste, thereby reducing the benefits accrued from the increased recycling intensity (Ferrara & Missios, 2005). Similar increased recycling intensity and illegal dumping have occurred when recycling programs are mandatory as opposed to programs based on voluntary participation (Ferrara & Missios, 2005).

Composting refers to the process of removing organics, such as kitchen scraps or yard materials from the solid waste stream, which are then processed by micro-organisms into humus material. In Canada, farmers and home gardeners historically have processed organic materials on farms or in backyards and used the resulting humus material to enrich their gardens or farmlands (Statistics Canada, 2005). Over the past few decades, some Canadian cities have established large centralized composting facilities to process organics diverted from households or commercial establishments, however, unlike recycling, these programs are not yet widespread throughout Canada and are often not available in rural communities (Statistics Canada, 2005).

In Canada, the overall regulatory and approval processes of waste management operations, including the licensing and monitoring of landfills, are the responsibility of provincial governments (Environment Canada, 2012). Each province approaches solid waste management differently and waste reduction goals vary in focus and scope. In Ontario and Quebec, recent strategies include increasing centralized composting facilities and a waste reduction goal of 60%, whereas in Newfoundland and Labrador the waste reduction goal is 50% (Government of Saskatchewan, n.d.). Saskatchewan’s focus is on developing performance measures for the collection of materials such as scrap tires and beverage containers, whereas Manitoba’s waste management objective is focused on general planning (Government of Saskatchewan, n.d.). The federal government has little involvement in the details of MSW management, but maintains jurisdiction for sustainable development, toxic materials, and movement of waste across international borders (Environment Canada, 2012).

In 2008, Canadians diverted 8.5 million tonnes of waste by recycling and composting, however, 25.9 million tonnes of MSW was sent for disposal (Statistics Canada, 2012). Ninety-five percent of the MSW was disposed of in landfills (Statistics Canada, 2012), a practice which has the potential to affect the environment in a number of ways. Leachate is produced when precipitation or liquid from waste material percolate through waste picking up toxins and pollutants, which can be carried into soils and ground water. In new landfill developments, federal regulations currently offer some level of environmental protection as they require protection against runoff with the use of liners and collection systems (Statistics Canada, 2012; Kinnaman, 2006), however, this only reduces the potential degradation of groundwater supplies and does not ensure that it will not happen (Kinnaman, 2006). As well, there are a number of older landfill sites still in operation built prior to the mitigation requirement of liner and collection systems and it is anticipated that these sites will continue to have significant environmental impacts long after they are retired from use (Statistics Canada, 2005).

Landfill gas is another by-product of waste disposal in landfills. Landfill gas is primarily methane, a greenhouse gas (GHG) that has a global warming potential 21 times greater than carbon dioxide and is created as organic waste decomposes in the landfill. In 2009, methane gas emitted from Canadian landfills represented 22% of national methane emissions and 3% of total GHG emissions (Statistics Canada, 2012) a figure that has not improved since 2002 (Statistics Canada, 2005). In addition to methane, other GHG such as carbon dioxide, nitrogen, benzene, toluene and vinyl chloride are emitted in smaller amounts (Statistics Canada, 2005). Some landfill gases are known to be toxic and harmful to human health, while others pose the risk of explosion or fire (Statistics Canada, 2005).

Five percent of Canada’s MSW is disposed of through incineration, which similar to landfilling, creates numerous environmental externalities. Incinerating waste distributes particulate matter and other pollutants such as sulphur oxides, nitrogen oxides, volatile organic compounds and carbon monoxide into the atmosphere (Statistics Canada, 2012). Some of these contribute to acid rain, ground-level ozone, and smog (Statistics Canada, 2012). Also, particulate matter may contain metals such as lead, cadmium, mercury, chromium, zinc and nickel, which can potentially be deposited over surrounding land areas (Statistics Canada, 2005). As well, toxic bio-accumulative chemicals such as dioxins and furans can be produced from improper incineration operations (Statistics Canada, 2012). Although new incinerators fitted with pollution abatement equipment can reduce environmental impacts, they require large capital expenditures. Consequently, old incinerators continue to operate (Statistics Canada, 2005). Economically, there are some benefits, however, to burning waste as it decreases the volume of waste in landfills and produces energy that can be captured for heat and electricity (Statistics Canada, 2012).

In addition to the environmental externalities of landfilling waste, the siting of landfill facilities has ecological, social and economic consequences. Decomposing waste materials in landfills create ammonia, hydrogen sulphide and other organo-sulphur compounds producing foul odours, which people living in close proximity may find offensive (Statistics Canada, 2005). Consequently, a nearby landfill can result in reducing property values (Kinnaman, 2006). The siting of landfills must consider soil conditions and climate, as well as, transportation distances, land use patterns, and other issues; therefore, choosing locations that minimize both environmental and socio-economic impacts is challenging (Statistics Canada, 2005). By reducing waste through recycling and composting programs, the lifespan of existing landfills will be extended and the need and costs of creating new landfills will be reduced.

Another important benefit of recycling is that it reduces the need for virgin resources. The World Bank’s recent global review of solid waste reports that 400 million tonnes of scrap metal and 175 million tonnes of paper and cardboard are recycled annually (World Bank, 2012), representing a significant savings of global natural resources. In addition, using recycled content in manufacturing new products conserves energy. A study by Morris (2005) shows that the energy required in the manufacture of products from recycled materials is substantially less than the energy required if the same product was manufactured from virgin materials. For example, aluminum and plastic made from recycled content requires 5% to 7% of the energy compared to making the same product using virgin material; recycled steel requires 37% energy; newsprint and cardboard, 50%; and glass containers, 65% (Morris, 2005). In addition, products made from recycled content forgo the pollution or environmental degradation that would occur during the harvest of virgin materials (Morris, 2005). When products are recycled at the end of their first life cycle, it maximizes and fully realizes the benefit of the initial harvest of virgin resources.

For the past two decades, Canadians have become more aware and increasingly concerned with the environmental impact of solid waste disposal (Statistics Canada, 2005). In 1989, the Canadian Council of Ministers of the Environment set goals that MSW volumes be reduced 50% by the year 2000 (Wagner & Arnold, 2008). Although Canada did not achieve this level of waste diversion, by 2000 Canadians were diverting 21% of solid waste from landfills (Statistics Canada, 2005). In 2002, the diversion rate increased to 22%, and in 2008, it grew to 25% (Statistics Canada, 2012). Although the average diversion rate increased marginally, the total volume of waste entering landfills and incinerators, however, has increased. Between 2002 and 2008, Canadians’ per capita generation of MSW rose from 769 kg to 777 kg (Statistics Canada, 2012). Based on the small progress to-date of waste diversion, and the per capita increase in MSW, it is evident that recycling and composting programs in Canada have been ineffective in reducing MSW volumes.

Nova Scotia

The success in reducing MSW varies from province to province. Between 2002 and 2008, Alberta had the largest increase of MSW at 39%, New Brunswick at 16%, and only one province achieved a reduction in MSW, Nova Scotia at -9% (Statistics Canada, 2012). Provincial spending on waste management varies, as do the types of services offered. The amount spent has some correlation to waste reduction rates (Statistics Canada, 2012). In 2002, Newfoundland spent 2% on waste management and achieved an 11% waste diversion rate, Alberta spent 2.5% and had a 17% reduction rate and Nova Scotia spent 6% and achieved a 32% reduction rate (Statistics Canada, 2005). Up until 1990, Nova Scotia’s waste reduction rate was similar to the other provinces’ rates, however, in 1995, the provincial government adopted a comprehensive province-wide waste management strategy, and by 2000, Nova Scotia was the first province to achieve the national waste reduction target of 50% (Wagner & Arnold, 2008).

The Government of Nova Scotia’s strategy involved an extensive collaborative effort province-wide between government, stakeholders, municipalities and the public (Wagner and Arnold, 2008). A management framework was created to implement the strategy consisting of the Resource Recovery Fund Board (RRFB), the Regional Chairs Committee, and seven waste management regions based on demographics and waste capacity (Wagner & Arnold, 2008). The RRFB, a non-profit organization, was delegated responsibility to plan province-wide waste diversion education and awareness programs and to promote the development of value-added manufacturing programs utilizing recycled goods (Wagner & Arnold, 2008). Each region was responsible for developing and implementing a regional MSW plan, and the Regional Chairs Committee provided support for regional issues and disseminating information province-wide (Wagner & Arnold, 2008).

Nova Scotia’s strategy focused on a maximum diversion of waste and, therefore, mandatory recycling was legislated province-wide for an array of recyclables including yard waste and organics (Wagner & Arnold, 2008). The implementation was staged over a number of years. For example, in 1996, cardboard and newsprint were banned, followed by steel/tin food containers in 1997, and food and yard waste in 1998 (Wagner & Arnold, 2008). In order to capture recyclables and organics, a curbside collection system for three streams was introduced and by 2004, 99% of the population had weekly curbside collection of recyclables and 76% had curbside collection of organics (Wagner & Arnold, 2008).

Funding is primarily through municipal property taxes and tipping fees, however, a percentage is provided by a “half-back” program on non-dairy beverage containers (Wagner & Arnold, 2008). The half-back program is essentially a tax levied on all beverage containers (Wagner & Arnold, 2008). For example, the consumer pays 10 cents per 500ml container and receives 5 cents back when containers are returned (Wagner & Arnold, 2008). A portion of the fee levied is used to fund depots handling the containers and a portion (25%) is used to fund other waste management strategies such as municipal programs, processing facilities, transportation of recycled materials and education awareness programs (Wagner & Arnold, 2008). The RRFB manages the funds and apportions it to the municipalities based on the volume of recovered materials, which can represent 7 to 15% of the municipality’s annual waste management budget (Wagner & Arnold, 2008). In 2005, the RRFB provided $8.2 million to the 55 municipalities in Nova Scotia to offset recycling and composting costs and $1.46 million was directed towards public awareness programs (Wagner & Arnold, 2008). In addition, the RRFB allocates funding to promote local markets and value-added industries that utilize recycled materials. As a result, local jobs have been created throughout the province (Wagner & Arnold, 2008). Over the past decade, $6.5 million in funding has been used in marketing strategies, and in developing new products, services, and equipment pertaining to the recovery of materials (Wagner & Arnold, 2008).

Apart from Nova Scotia, Canadian municipalities must budget for the collection of recyclables and organics, their transport to sorting facilities, and materials separation before they can be sold to processing and manufacturing industries. Although some costs are offset by municipal taxes, the programs rely on recovering a portion of the costs from the sale of recycled materials. Recycling sales are often based, however, on traditionally poor and fluctuating global markets. For example, for a number of years mixed paper was valued at $135 a metric tonne, however in 2009, market prices dropped and it was worth almost nothing (“Making something,” 2010). If the market price for recyclables is low, municipalities may be forced to store materials until the market recovers. Not only does warehousing materials increase economic costs, many municipalities do not have warehousing space readily available and are sometimes forced to stop collecting some recyclables (“Making something,” 2010). Recycling programs are dependent on the availability of markets and industries that can utilize the materials collected. If the markets are not dependable, or do not exist, the collection of recyclables is not financially viable.

Another issue affecting the viability of recycling and composting occurs if the cost of waste disposal is less than the costs associated with recycling and composting. This is prevalent in countries such as Canada as there is a substantial amount of undeveloped land available (Wagner & Arnold, 2008); this makes land values more affordable, thus making landfills more economically viable. In addition, the cost of operating a landfill may be offset from revenues gained if the site is designed to capture landfill gas. In 2001, Canada had 41 landfill facilities capturing landfill gas, which is used to produce energy for heat and electricity (Statistics Canada, 2005). Although the capture of landfill gas reduces methane emissions, thereby reducing the eternality caused by landfilling, the landfill gas could be prevented in the first place by ensuring that organics are not disposed of in landfills. The market price of composted organics is typically, however, far lower than the cost of collecting and processing organics (Wagner & Arnold, 2008) and, therefore, if land is inexpensive and landfill gas recovery further reduces the cost of waste disposal, the financial viability of composting programs becomes questionable.

Although the justifications for recycling and composting can be economically challenging, recycling and composting provides many environmental benefits. By reducing the volume of waste destined for landfills and incinerators, recycling and composting prevents toxins from leachate, landfill gas and particulate matter from entering the environment and reduces the footprint of landfill areas. Recycling and composting, however, produces some externalities. Fossil fuel emissions are created in the collection and transportation of materials to processing facilities, energy and water are necessary for processing, and wastewater and residual matter must be disposed of in landfills (Statistics Canada, 2005). The energy saved and pollution prevented in manufacturing products from recycled materials, however, is far greater than the energy used and externalities created from the collection and processing of recyclables (Morris, 2005). For example, manufacturing of recycled aluminum cans uses 95% less energy than manufacturing the same product from virgin materials (Statistics Canada, 2005). Recycling programs that depend, however, on global markets may compromise the full potential of environmental benefits since the distance recyclables travel for processing and manufacturing increases fossil fuel emissions from transport. Many recyclables are shipped across the country to available processing facilities, and some travel the globe to less developed countries with cheaper labour. In addition to reducing environmental benefits, seeking inexpensive labour from undeveloped countries is also counterproductive to social imperatives and raises questions concerning equity and justice.

Recycling and composting programs are dependent on the active participation of communities and their people. Participation in recycling and composting activities, however, has social costs that could be equated to time spent on the activity of waste diversion. Time spent on recycling and composting activity is directly related to the type of service provided within the community. In small and rural communities, curbside pickup of recyclables and organics is often not available and residents must transport materials to local depots some distance away. If residents in rural and small communities, therefore, recycled at the same intensity as their urban neighbours, overall societal costs would be increased. A number of studies demonstrate that there is a linkage between convenience and frequency of service to the level of intensity of recycling (Ferrara & Missios, 2005; Kaciak & Kushner, 2011), which suggests that there is an optimum level of social costs that residents are willing to incur. If maximum waste diversion, therefore, is to be achieved, frequency of service and convenience must be extended to small and rural communities. As well, if waste diversion programs are not inclusive of all communities and residents and do not collect a full range of recyclable materials including organics, then waste diversion programs may lack economic efficiencies and will not provide maximum environmental benefits.

Nova Scotia’s waste diversion strategy has been successful in comparison to other provinces’ programs that are managed independently at the municipal level. Nova Scotia’s leadership in linking its environmental objectives with its economic objectives provided major benefits to social imperatives. Its programs are inclusive, provide a high level of recycling and composting services to all communities including small and rural communities, and have created new employment opportunities province-wide in new value-added industries (Wagner & Arnold, 2008). By developing their model as a closed-loop system that includes the collection of materials through to the manufacturing of new products, Nova Scotia has supported the economic viability of its recycling and composting programs, and reduced externalities from transportation. In addition, by engaging the entire province from the rural areas through to the large municipalities in collaborative discussions, a high level of buy-in and acceptance of mandatory recycling legislation was achieved, which may be critical to maximize waste diversion and environmental benefits. Their extensive education and awareness programs, and more generous funding to implement collection, sorting of materials, development of infrastructure, as well as incentives to develop markets, have undoubtedly added to their success.

Statistically, Nova Scotia spends more of its budget on waste management than other provinces, which suggests that environmental benefits and economic cost are directly linked. Further research is necessary, however, to assess any correlation between economic cost and diversion rate, and to determine if costs can be attributed to start-up or are necessary to maintain programs over time.

Strategic Questions

1. What are the challenges facing most local governments in delivering successful recycling and composting programs?
2. Which is needed first? A nation-wide waste diversion strategy, a provincial-wide strategy, education, markets for recycled materials, or another factor?
3. Should incentives and/or sanctions have a role in the design of recycling and composting programs? If so, what role and how would it contribute to the programs success?
4. How can demand be increased for recyled materials?

References

Allers, M. & Hoeben, C. (2010). Effects of unit-based garbage pricing: A differences-in-differences approach. Environmental and Resource Economics, 45(3), 405-428.

Dale, A. (2001). At the edge: sustainable development in the 21st century. Vancouver: UBC Press.

Environment Canada. (2012). Municipal Solid Waste. Retrieved from http://www.ec.gc.ca/gdd-mw/default.asp?lang=En&n=EF0FC6A9-1

Ferrara, I. & Missios, P. (2005). Recycling and waste diversion effectiveness: Evidence from Canada. Environmental and Resource Economics, 30(2), 221-238.

Government of Saskatchewan. (n.d.). Saskatchewan Environment National and Provincial Jurisdictional Approaches to Solid Waste Management [report no longer available online]. Retrieved from http://www.environment.gov.sk.ca/adx/aspx/adxGetMedia.aspx?DocID=495,487,424,252,94,88,Documents&MediaID=194&Filename=National+and+Provincial+Approaches+to+Solid+Waste+Management.pdf&l=English

Kaciak, E. & Kushner, J. (2011). Determinants of residents’ recycling behaviour. International Business & Economics Research Journal (IBER), 8(8).

Kinnaman, T. C. (2006). Policy watch: Examining the justification for residential recycling. The Journal of Economic Perspectives, 20(4), 219-232.

Making something out of almost anything. (2010, July 3). Vancouver Sun @ Canada.com [article no longer online]. Retrieved from http://www.canada.com/vancouversun/news/westcoastnews/story.html?id=bde0e893-942d-41ac-bc37-4cb69fe131fa

Morris, J. (2005). Comparative LCAs for curbside recycling versus either landfilling or incineration with energy recovery (12 pp). The International Journal of Life Cycle Assessment, 10(4), 273-284.

Statistics Canada. (2005). Human Activity and the Environment (Annual Statistics 2005). Retrieved from http://www.statcan.gc.ca/pub/16-201-x/16-201-x2005000-eng.pdf

Statistics Canada. (2012). Human Activity and the Environment: Waste Management in Canada 2012. Retrieved from http://www5.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=16-201-X201200011679&lang=eng

Thogersen, J. (2003). Monetary incentives and recycling: Behavioural and psychological reactions to a performance-dependent garbage fee. Journal of Consumer Policy, 26(2), 197-228.

Wagner, T. & Arnold, P. (2008). A new model for solid waste management: An analysis of the Nova Scotia MSW strategy. Journal of Cleaner Production, 16(4), 410-421.

World Bank. (2012). Urban Development What a Waste: A Global Review of Solid Waste Management. Retrieved from https://openknowledge.worldbank.org/handle/10986/17388

Deanne Turnbull Loverock, Associate Instructional Designer, Royal Roads University
Rob Newell, CRC Research Associate, Royal Roads University
Published August 21, 2012

Case Summary

Pro-environmental behaviours (PEBs), defined by Kollmuss & Agyeman (2002: 240) as “behavior that consciously seeks to minimize the negative impact of one’s actions on the natural and built world”, can be adopted in workplaces committed to effective workplace sustainability programs (WSPs). Implementing WSPs can lessen negative environmental impacts caused by company operations by greening its operations; however, if PEBs adopted by employees engaged in WSPs become lifestyle habits beyond the workplace, workplaces could be critical forums for addressing environmental issues in the greater community. This case study investigates whether adopting PEBs in workplaces can lead to employees integrating these behaviours in their personal lives. The study provides an in-depth review of the WSPs of four companies based in Victoria, BC: AbeBooks, Advanced Solutions, Archipelago Marine Research, and Smart Dolphins IT Solutions. Employee participation in each company’s WSP is not mandatory; however, each company employs various strategies such as role modeling, empowerment, peer-to-peer learning, and incentives to encourage employee participation.

To investigate whether adopting behaviours at work can transfer to the everyday lives of employees, this case study used Bem’s Self-Perception Theory (1972). Bem’s theory explains that people identify their beliefs and attitudes based on the behaviours they perform. In accordance with this theory, if employees are induced or strongly encouraged to engage in PEBs in the workplace, they may alter their everyday beliefs and behaviours to align with the PEBs they perform in their work lives. In this manner, workplaces potentially can act as important leverage points for government and NGOs in changing development pathways to more sustainable transitions.

Sustainable Development Characteristics

As identified by Hardin’s Tragedy of the Commons (1968), relying on the majority of a community to care for the commons through an intrinsic sense of stewardship is insufficient for maintaining the vitality of common property. In addition, public outreach and communications efforts have not yet fuelled behavioural changes at a rate rapid enough to adequately address large-scale environmental issues (Millennium Ecosystem Assessment, 2005). Thus, alternative methods of behaviour change are required for implementing sustainable community development. The fastest rate of adoption of behaviour change “stems from authority decisions” (Rogers, 2003, p. 29), which, can originate from high-level leadership of employers.

Theorized by Bem (1967) and supported by others, “[i]nducing people to behave in a given manner leads them to develop positive attitudes related to the behaviour” (Ronis, Yates & Kirscht, 1989, p. 220). An action becomes habitual “[a]fter the decision and the action are repeated many times…[making] repeated decision-making…unnecessary [and the habit] relatively independent of attitudes and beliefs”. In this manner, an authority figure encouraging a PEB could influence one’s overall environmental values. Government authorities create policies and regulations for large-scale environmental issues applying to industries (i.e., industrial pollutants) and for sensitive issues such as endangered species; however, enforcing day-to-day PEBs such as composting and recycling by law is difficult because it would require monitoring private space. For these types of PEBs, a different source of authority is required, emphasizing the role of the employer and WSPs as a critical determinant.

The average person commits a significant portion of their waking hours to their occupation (based on 40-hour work week); thus, workplaces serve as key places for setting sustainable development learning and communicating innovative practices. Weber (1964) noted the authoritative influence employers have on employees, and Milgram (1963, 1965, and 1974) observed in his series of obedience studies that people follow directives from an authority figure (findings later supported by a replication study performed by Burger, 2009). The combination of the authority position that employers occupy, and people’s tendency to follow authority, positions the workplace as a potentially powerful space for teaching/adopting PEBs. Furthermore, Voydanoff (2001) observed that workplace and habitat behaviours have the potential to transfer from workplace to home life, and, although her case study does not capture transference of PEBs specifically, her observations imply WSPs have the potential to result in transference of environmentally related behaviours from work to home. These implications indicate the workplace can serve as an effective forum for social change in the environmental movement creating opportunities for environmental educators and communicators to form effectual partnerships with a powerful, influential, and innovative sector of the community. In addition, opportunities exist for companies to work in partnership with municipalities as PEBs can be promoted in the workplace and supported at home through municipal services (discussed in more detail below).

In addition to influencing lifestyles in an environmentally friendly manner, encouraging PEBs at work can positively influence social and economic imperatives, which are also integral to sustainable community development (Dale, 2001). When employees feel that a company is living its professed values this significantly influences "employee engagement, and employee engagement significantly influences organizational and financial performance" (Gomez, 2009). In addition, “[t]he more skills and values employees reported transferring from work to family, the better their mental health and the higher their job satisfaction” (Hanson, Hammer, & Colton, 2006, p. 262), and the stronger their commitment to their roles and employers. Consequently, companies implementing values-based policies and social responsibility into their business models (i.e., WSPs) are providing a higher quality work environment for their employees contributing to the quality of life to members of their respective community (social imperative) and cultivating high performance workers (economic imperative).

Critical Success Factors

The success of the companies WSPs (in this case, determined by whether employees are adopting PEBs) hinges on the theory that behaviour adoption best occurs when behaviours are performed frequently and in a stable context (Ouellette & Wood, 1998) such as the workplace. Albeit, new behaviour patterns are often supported by pre-existing attitudes and beliefs (Ronis, Yates, & Kirscht, 1989), behaviours are also heavily influenced by subjective norms. Through strong and progressive leadership, each company examined within this case study has created a workplace environment in which PEBs are encouraged (and, thus, the norm), cultivating an atmosphere in which acting in an environmentally friendly manner is natural and commonplace. Previous research shows that pro-environmental neighbourhood norms can positively affect the uptake of PEBs in local residents (Schultz, Nolan, Cialdini, Goldstein, & Griskevicius, 2007), and, in the same manner, similar norm-setting approaches can be (and have been) successfully applied to workplaces, an environment that is often more tight-knit and localized than a neighbourhood.

Whether PEBs adopted in the workplace become regularly practiced behaviours at home relies on the potential for behaviours to transfer between work and home. Tudor, Barr and Gilg (2007) observed that a relationship between work and home behaviours existed in employees at Cornwall’s National Health Service, where those with strong environmental awareness are more likely to bring these behaviours into the workplace. The companies understudy aimed to facilitate transference in the opposite direction (i.e., from work to home) through a similar process, generating a strong environmental awareness at work that could be carried over to home life. To generate an environmental awareness in employees with the strength to persist beyond the workplace, the companies used positive reinforcement techniques. Rather than imposing mandatory policies, the companies used encouragement and many of the WSP initiatives were voluntarily developed and run by the employees themselves. Such an approach is empowering for the employees in terms of adopting PEBs and thus increases the chances the employees will practice PEBs outside of the office and in the greater community. In addition, peer-to-peer learning was frequently practiced within the workplace as a method of spreading PEBs and frequently practicing this behaviour encourages employees to continue peer-to-peer exchange of sustainability ideas and practices in their home communities.

In addition to looking at how the program is successful in terms of employers exerting influence on employees and their communities, it is important to consider the incentives for companies to develop WSPs because these programs are only successful if companies are willing to implement them. One of the major motivations for the companies understudy to develop and implement these WSPs was social license, which can be defined as "the demands on and expectations for a business enterprise that emerge from neighborhoods, environmental groups, community members, and other elements of the surrounding civil society" (Gunningham, Kagan, & Thornton, 2004, p. 308). Social license is heavily influenced by customer interest, branding, and community pressure (Lynch-Wood & Williamson, 2007), and, in a large potion of North American society, the environmental movement has gained enough momentum that ‘going green’ is considered to be politically correct (Casselman & McLaughlin, 2007). Consequently, social license in the current market and set of norms is a strong driver for companies to develop and implement effective WSPs, allowing them to publicize their corporate principles.

Community Contact Information

Deanne Turnbull Loverock
Associate Instructional Designer, Royal Roads University
Advisory Board Member, School of Environment and Sustainability, Royal Roads University Chair, VIATeC Sustainability Round Table
Deanne.1turnbullloverock@RoyalRoads.ca

AbeBooks Inc.
Suite 500 – 655 Tyee Road
Victoria, BC V9A 6X5
www.abebooks.com

HP Advanced Solutions Inc.
Suite 2200 - 4464 Markham Street
Victoria, BC Canada V8Z 7X8
(250) 405-4500
info@hpadvancedsolutions.com
www.hpadvancedsolutions.com

Archipelago Marine Research
525 Head Street
Victoria, BC, V9A 5S1
(250) 383-4535
amr@archipelago.ca
www.archipelago.ca

Smart Dolphins IT Solutions Inc
5-515 Dupplin Road
(250) 721-2499

info@smartdolphins.com
www.smartdolphins.com

What Worked?

To determine whether PEBs were being adopted by employees and transferred to home life, a survey was administered to the employee body of each company (returning 186 responses) asking the employees questions concerning PEBs they adopted at work and now practice at home (see Research Methodology for more details). Through the survey data, the current study found evidence that PEBs can become habitual if performed regularly in the workplace. Approximately 82% of employees surveyed in this study began at least one PEB at their workplace, and, on average, these employees have continued to perform this behaviour habitually 84% of the time. These findings support this study’s theory that the workplace is an effective environment for inspiring people to adopt environmentally-friendly behaviours they might not have engaged in, otherwise. It is, however, important to note that the companies understudy supported the employees engaging in PEBs through encouragement and positive feedback, and employees were not forced to adopt the PEBs. When surveyed, employees indicated that positive reinforcement and sense of responsibility were primary motivators for performing PEBs. In contrast, employees identified negative reinforcement (i.e., penalties, concerns about how their boss perceives them, etc.) as demotivating and ineffective for them in terms of adopting behaviour. Consequently, companies employing WSPs should be mindful of how the implementation is done as well as what strategies should be put in place when strengthening the integrity of the adopted PEBs.

The study also observed evidence supporting the theory that PEBs adopted in the workplace are transferred to home life. For any given PEB learned at work, an average of 67% of employees indicated they began practicing this PEB at home as well as at the office. In addition, some evidence existed to support the idea that this adoption of PEBs in home routines has altered the general attitudes and lifestyle approaches of the employees in their everyday life. Employees were asked about whether the WSP at their respective workplace had encouraged them to purchase local and ‘green’ products, think about their ecological footprint and consume less, and the average responses for all these questions were of agreement. These findings indicate that Bem’s Theory of Self-perception might be in effect in respect to the employees adopting PEBs, and employees are not performing PEBs simply due to workplace pressure.

What Didn’t Work?

Certain PEBs such as printing double-sided and recycling electronics exhibited lower rates of transference from work to home lives because these environmental behaviours are associated more with office than home environments. Because these behaviours do not translate into home activity, it is difficult to assess whether or not they affect people’s everyday lives and perceptions or if they are performed simply because they are part of an office infrastructure.

Other PEBs with low transference to home lives include composting and recycling of styrofoam, possibly due to municipalities not offering services that facilitate these processes. Readily adopting a new behaviour requires a removal of obstacles to performing the behaviour (Fishbein & Ajzen, 1975), and, the infrastructure for making more sustainable choices. For example, the composting system implemented in AbeBooks allows employees to deposit their organic waste into an office receptacle without requiring employees to empty this receptacle. Thus, albeit employees might throw organic waste into compost at work, they might not have capacity (i.e., garden or municipal infrastructure) to engage in composting at home. With respect to recycling styrofoam, employees are more likely to recycle this material if the receptacle for collecting it is conveniently located. All companies in this study handle the transport and costs of recycling the styrofoam; thus, recycling it in the workplace is relatively simple and, hence, done frequently by employees. However, since many municipalities do not provide services for collecting compost and recycling materials like styrofoam and electronics, these types of PEBs have lower likelihoods of transferring to home life. This aspect of the study illuminated the opportunities municipalities and companies have in terms of coordinating the provision of services with the encouragement of PEB adoption in developing green communities.

Financial Costs and Funding Sources

Costs of the PEB programs are all funded by the companies and in-kind hours contributed by staff. Many of the office greening initiatives are expected to produce eventual financial returns due to reductions in consumption, and, over the long-term, these initiatives could be considered to procure a net financial gain (rather than being regarded as an expense).

The table below displays examples of the types of cost and returns associated with each company’s WSPs. Specific figures (in CAD) associated with the costs of the initiatives are displayed in italics in the table below and discussed in the appropriate sections of the Detail Case Background Description.

Research Methodology

The four companies chosen for this case study include AbeBooks®, Advanced Solutions, Archipelago Marine Research, and Smart Dolphins, and the companies were selected for the study because they all have progressive WSP in place. Each company’s WSP encourages a minimum of five PEBs to be practiced in the workplace by employees. Details on WSPs and backgrounds of each company were collected through interviews with senior management staff members to gain perspectives from high level decision-makers who are responsible for implementation of and fund allocation for WSPs. Information from these interviews provided insights on both the company’s reasons for creating corporate cultures that incorporate sustainability into their day-to-day operations and how their WSPs were delivered so that PEBs were effectively adopted by employees.

Online surveys were administered to the employees to measure rates in which PEBs were adopted and transferred to home life, as described in the previous section. A Likert scale was used to measure attitudes toward the environment and how their respective workplace PEB program has affected their perspectives. Adoption and transference rates of PEBs were measured by asking survey participants to indicate from a list which PEBs they adopted at work and now practice at home. The entire employee body for each company was invited to participate in the survey; of 537 employees, 186 respondents (35%) completed the survey.

Detailed Case Background Description

Companies were selected that included corporate social responsibility (CSR) in their strategic plans and company culture. The European Commission defines CSR as "[a] concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis" (European Commission, 2009). This integration is usually supported with 'triple bottom line' or 'full cost accounting', a method of measurement that allows companies to account for "the economic, social, and environmental imperatives of their activities" (Industry Canada, 2010). When operating within the framework of CSR, a company's interactions with their stakeholders (investors, suppliers, customers, and employees) are guided by principles of sustainability, which, ideally, allows the organization to operate responsibly and beneficial to its respective community.

This case study investigates the WSPs of four organizations based in Victoria, BC, that can be described as proactive companies in accordance with the description of CSR above. The following sections detail company overviews, history of WSPs, how the programs are supported, and the future of the companies’ sustainability programs and objectives. A comprehensive list of activities performed in WSPs can be seen on the WSP Overview Table.

AbeBooks

Company Overview

AbeBooks is an internet-based global exchange for used books. The company’s headquarters is located in Victoria, employing approximately 100 employees, and a European office is located in Dusseldorf, Germany (AbeBooks, 2010). The company has facilitated the sale of over 110 million books and connects buyers with the inventories of thousands of booksellers. In December 2008, Amazon incorporated AbeBooks under their organization’s umbrella; however, AbeBooks has retained control of their facilities and business guiding principles (AbeBooks, 2010). The business model of AbeBooks is based upon facilitating the exchange of reused products, and thus reduced consumption is a direct result of their operations. In this manner, AbeBooks has found that “the business has supported sustainability, and sustainability has supported our business” (personal communication, March 8, 2010).

History of WSP

AbeBooks’s WSP began in June 2008 when they were in the process of moving to their current office in Victoria West, across the Johnston Street Bridge from downtown. Their executive team selected this office space keeping in mind environmental considerations such as use of recycled/restored carpeting, paint with low fume emissions so “employees didn’t have to work in a toxic environment” (personal communication, March 8, 2010), zoned climate control to reduce the need for air conditioning and heating, and a central location for employee commuting convenience. Later in 2008, the Chief Operating Officer tasked the Director of Human Resources and Administration with assembling a Green Committee. Responsibilities of the Committee included (but were not limited to) detailing the amount of energy the company used, tracking their carbon footprint, determining the effectiveness of their recycling program, and computing how much paper they used.

Program Initiatives

AbeBooks’s WSP began with basic office greening strategies, such as setting printers to ‘duplex’, replacing styrofoam cups with dishes, and maintaining electronic rather than hardcopy records. The next step in their program focused on encouraging green commuting. AbeBooks had previously covered the cost of bus passes for their employees for a total expense of $270 to $900 per month (depending on the number employees claiming a bus pass); however, they decided to increase their efforts by reimbursing employees for parking spaces at $85/month per employee if employees opted not to use them. Albeit this initiative required use of administrative resources, AbeBooks views it as worthwhile from a big picture perspective as over 50% of the staff now take advantage of it, with a large percentage of employees commuting year round on their bikes.

A unique initiative AbeBooks attempted to implement in the first summer of the program consisted of inviting local growers to creating a bi-weekly farmer’s market in their building. However, the initiative did not continue in subsequent years as suppliers were not generating sufficient revenue to maintain interest. AbeBooks is considering redesigning and implementing the initiative again with the support of the LEED-ND standard community neighbouring them, Dockside Green.

Most of the sustainability initiatives of AbeBooks focus on inclusion and participation of their 100 employees; however, interviewees noted that a sustainability program requires the support of associated companies and contractors to be successful. To exemplify, AbeBooks insisted that the building manager replace two sets of cleaners because “they would not recycle…they were just dumping it all in the same place” (personal communication, March 8, 2010). The building manager has now hired cleaners who use green cleaning products and recycle properly.

Program Engagement

AbeBooks WSP is not comprised of mandatory policies; thus, the program is supported through management role modeling, peer-to-peer learning, employee empowerment and education/outreach. On Earth Day 2009, AbeBooks asked each employee to write one green tip on a huge chalkboard. This exercise provided employees with an excellent way to exchange ideas and educate each other on new behaviours, while simultaneously empowering employees by showing their opinions and input were valued. In addition, AbeBooks is actively engaged in education as sustainability experts are invited as guest speakers during ‘Lunch and Learn’ sessions. Other methods of encouraging employees to engage in sustainability initiatives include signage and opening the floor to new ideas at company-wide meetings.

Behaviours are more readily adopted when obstacles to engaging in them are removed (Fishbein & Ajzen, 1975), and AbeBooks attempts to encourage employee engagement in their sustainability program by making green practices easier. Employees are encouraged to bring in all items that the office recycles but local municipalities do not, including batteries, soft plastics, styrofoam, and compost. AbeBooks contracts private operations to regularly collect this waste from their offices at an expense of approximately $120 to $140 a month depending on the waste load. As an added benefit, the composting company returns a bag of soil with each pick up. Employees are invited to place their names on a waiting list for these bags, which, in turn, connects the employees with the ‘cradle-to-cradle’ context of composting.

Future of Program

AbeBooks is committed to continual improvement of their sustainability program, and future initiatives include the following:

1. find an alternative to plastic water glasses for visitors to the office;
2. more lunchtime education sessions to expand employee awareness of environmental initiatives;
3. conduct an environmental audit to quantify actual resource use, waste produced, travel, etc., and
4. establish an overarching framework in which to nest individual initiatives and use this to strategize next steps for the internal sustainability program and company direction.

Advanced Solutions

Company Overview

Advanced Solutions is a subsidiary of Hewlett Packard Canada that delivers outsourcing services to large governmental partners. Their headquarters are located in the Vancouver Island Technology Park, with approximately 370 employees (Advanced Solutions, 2010). The company views sustainability initiatives as a business opportunity, for example, they are constructing a ‘Clean and Green’ data centre in Kamloops designed to inform the public sector on reducing energy usage. The company also provides online revenue management and ‘image-based workflow’ services to help their partners and clients reduce printing and storage costs.

History of WSP

With the help of about 15 committed employees, Greg Conner, President (VP) of Human Resources and Communication initiated the company’s Sustainability Program in September 2008. A strong supporter of CSR, Conner believes that sustainability is both an individual and a company responsibility, and he notes “HP Advanced Solutions strives to be a model for sustainability in its community” (personal communication, May 26, 2010).

Program Initiatives

Advanced Solutions is a tenant of the Vancouver Island Technology Park. Being a tenant limits the breadth of the initiatives they can implement due to having to comply with certain standards of the complex. The company works with a tenant group (i.e., a group consisting of members of different organizations within the complex) involved in implementing and maintaining a recycling program that includes recycling of soft plastics, styrofoam and batteries at an expense of $150 to $350 quarterly. Advanced Solutions also offers a composting service that processes approximately 180 kg of waste month and costs $400 annually. The other initiatives of Advanced Solutions WSP can be seen on the WSP Overview Table.

Program Engagement

In a similar approach to that taken by AbeBooks, employees are encouraged (rather than required) to participate in green initiatives through empowerment and outreach. Input on WSP initiatives is welcomed from employees, and their ‘Sustainability Group’, an office group responsible for guiding green initiatives, is comprised of 15 employees that meet regularly to “talk about what we can, should, and are doing to make this a more responsible company”. Outreach and education to staff is conducted through methods such as peer-to-peer exchange of information and ideas and ‘Lunch and Learn’ seminars conducted by local sustainability experts.

Future of Program

Future plans for Advanced Solutions’s green initiatives focus on monitoring and measuring data relating to ecological footprint. They aim to develop systems and frameworks for comprehensively capturing data such as energy expenditure, water usage, and GHG emissions. These data collection systems will be used for Advanced Solutions operations but are also regarded as business opportunities in terms of providing assessment services to other companies.

Archipelago Marine Research

Company Overview

Established in 1978, Archipelago operates as a biological consulting firm whose work promotes responsible and sustainable fishing practices. Their 175 biologists, technicians, and IT staff assist public and private partners with managing marine resources in North America, Australia, and New Zealand. The company’s head office in Victoria employs 55 of these staff and generates approximately $9.5 million in revenue annually (personal communication, August 2, 2012). Archipelago specializes in two main areas:

• near-shore habitat inventory, assessment, and environmental impact analysis, and
• data collection programs in support of commercial fisheries management (Archipelago Marine Research, 2010)

Sustainability Program History

Brian Emmett, Vice President and co-founder of the company, initiated the Archipelago Sustainability Initiative (ASI) in 2003. Since consultation in sustainable fishery practice is Archipelago’s primary service, the ASI was created as a method of aligning company practices with company services. In this manner, Archipelago ‘walks their talk’ and embrace sustainability as a core company principle both in and out of the office. Emmett sums up the underlying ethos of ASI with “[I]t is not important what our competitors are doing or not – this isn’t about competitive advantage, it’s about what one should be doing” (personal communication, March 9, 2010).

ASI is led by a committee of employees who are committed and passionate about the environment. The program lost momentum in the mid-00’s after a few of the ASI Committee’s champions left the company but was revitalized in 2008 when Archipelago contracted an environmental consultant to work with the staff to develop their WSP. The consultant helped the Committee create an overarching sustainability plan for the company that incorporated previous ASI initiatives into a manageable and efficient framework.

Program Initiatives

As with AbeBooks’s WSP, Archipelago connects their employees with recycling services not provided by their municipalities. Their extended recycling program began with a wicker basket that was used as a receptacle for dead batteries in the office and, eventually, for batteries employees brought from home. Archipelago encouraged this behaviour to foster the environmental ethic of the staff. This recycling program now includes soft plastics and styrofoam, and costs of recycling are covered by the company, summing to approximately $950 per year.

Archipelago’s WSP also includes a commitment to reduce water usage. The company office is currently equipped with 7 dual flush toilets that allow the user to select a reduced flush volume rather than the full volume for every flush. Water conservation for dual flush toilets averages to approximately 26% reduction in usage compared to that of a 6 L single-flush (BC Hydro, 2012). The total cost of installing the low-flush toilets summed to approximately $2,750.

Other ASI activities include stocking their kitchen with reusable mugs, duplex printing, and in-office composting. The complete list of activities is listed on the WSP Overview Table.

Program Engagement

Emmett conceived ASI but tasks related to the program’s development and progress were delegated to the employees, knowing that in order for the program to be successful it would have to be staff supported. Archipelago uses several strategies to encourage employees to engage in ASI. Alayna Siddall, Co-Chair of ASI, designed the extended recycling program as program “for Dummies” to ensure it is easy for staff to participate. Office competitions in green commuting and waste reduction are held as fun incentives for employees to engage in environmental practices. Archipelago also invites the float-home community behind their offices to utilize their extended recycling services and this encourages staff to engage in PEBs as it positions the company as a positive (i.e., altruistic) role-model.

Future of Program

Archipelago plans to further reduce their ecological footprint by concentrating on reducing energy usage and waste production and encouraging staff to use alternative transportation. Archipelago is committed to developing a system to properly track metrics of water and energy usage. The intended uses of these metrics are to both assess ecological footprint and measure return of investment on green installations such as energy-efficient lights and low flow toilets. In addition, the ASI Committee plans to take pictures of the amount of recycling diverted from the landfill each month then post these pictures on the recycling bins to boost employee morale in recycling efforts.

Smart Dolphins IT Solutions

Company Overview

Established in 2000, Smart Dolphins IT Solutions operates as an external IT department for companies who do not have sufficient internal IT capabilities. Additional services provided by Smart Dolphins include assistance with online marketing campaigns. The company currently has 10 employees and generates $1.2 million in annual revenue (personal communication, August 13, 2012).

History of WSP

Smart Dolphins’s WSP was initiated in 2005 after moving into their present office, and their sustainability program was started by an employee who was an avid recycler and composter. This program was championed by another employee after the initiator of the program left the company, but lost momentum after the second program champion left. In 2010, Adrian Nyland, Vice President of Smart Dolphins, reignited the program by combining the different initiatives implemented in 2005 into a comprehensive action plan. Nyland identified his motivations for revisiting office greening initiatives to be a reduction of ecological footprint, increase in reducing expenditure (i.e., reduced consumption and waste), and good public relations (personal communication, March 10, 2010).

Program Initiatives

Smart Dolphins allows many of their employees to work remotely from home, which reduces vehicular emissions. Allowing employees to work remotely was not initially planned as a sustainability initiative; however, it has since been recognized for its environmental benefits and is now considered when drafting new work plans and schedules. Currently, approximately one employee works remotely per week. This system reduces greenhouse gas emissions by up to 0.7 metric tons annually, calculated based on average commuting distance in Victoria of 4.6 km (BC Stats, 2008) and emissions rates for passenger vehicles as identified by the Environmental Protection Agency (2012).

Smart Dolphins utilizes a customer relationship management (CRM) software program to allow them to efficiently work with clients. CRM provides a user-friendly method of storing/transferring virtual documents and optimally schedules on-site appointments through identifying the most geographically proximal IT tech to the client in need of service. In this manner, CRM both dramatically reduces paper waste and decreases vehicular emissions by identifying shortest driving distance between the company and their clients.

Other Smart Dolphin program initiatives can be seen on the WSP Overview Table.

Program Engagement

Smart Dolphin’s WSP is designed as an employee-driven program to share responsibility of the WSP and to create a sense of ownership for the initiatives. Nyland discusses the initiatives with staff then designates each employee as a lead for a specific initiative. Because each employee assumes responsibility for a particular initiative, office greening tactics are heavily driven by peer-to-peer learning exchanges and staff are kept committed to the sustainability program through reminders from colleagues to, for example, turn off lights or compost organic waste.

Future of Program

Smart Dolphins would like to be branded as the leading ‘Green IT’ company. However, Nyland is conscious of the fact that the company needs more operational practices in place before the company can begin advertising their environmental sustainability. To achieve their goal of being legitimately marketed as a leading green IT company, Smart Dolphins aims to both increase their environmentally friendly practices and develop a system that accurately captures the reduction in their ecological footprint resulting from these initiatives.

Strategic Questions

1. How can workplace sustainability programs address other imperatives essential to sustainable community development, social and economic imperatives?
2. Can these initiatives be scaled up to larger companies?
3. What models can be created to encourage companies and government to communicate and collaborate in efforts to instill PEBs within communities?
4. How, if possible, do we use WSPs to inform people on larger, more complex critical issues such as climate change adaptation and mitigation and over-consumption?
5. How can agencies that aid entrepreneurs, such as start-up consultancies and micro-lending organizations, encourage new businesses in incorporating sustainability into their organization’s core principles?

Acknowledgements 

We would like to thank the Social Sciences and Humanities Research Council (SSHRC) for providing funding for this research.

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Allison Annesley
Published June 2, 2012

Case Summary

Pacific Carbon Trust (PCT) is an innovative policy instrument developed by the British Columbia government to address climate change. This hybrid instrument blends a market mechanism with public investment and regulation as part of the government’s commitment to mitigate greenhouse gas (GHG) emissions. The model is designed to help establish a local carbon offset market as part of a larger framework that regulates carbon neutrality in the public sector to reduce GHG emissions while influencing cultural norms and behaviour.

Pacific Carbon Trust is a Crown corporation created by the provincial government. PCT charges British Columbia public sector organizations (PSOs) by the tonne for their annual GHG emissions, calculated for their carbon equivalency. Funds collected from PSOs are used to invest in pollution reduction schemes to offset the government’s annual operating emissions with the goal of making the government carbon neutral. Pacific Carbon Trust managed to offset close to a million tonnes of GHGs for 2010, the first year of its mandate. As a result, BC has the first senior government in North America to become carbon neutral.

The provincial government has shown leadership in tackling climate change by implementing a series of precedent setting and legally binding GHG reduction goals and committing to carbon neutrality in its operations. This commitment is enshrined in the Greenhouse Gas Reduction Targets Act and applies to all provincial public sector operations. This is part of a larger climate change action strategy that includes policies aimed at both mitigation (reducing the emissions that cause global warming) and adaptation (adapting policies to deal with the effects). B.C.’s compulsory carbon tax is an example of a mitigation policy, while mandatory flood protection is an example of adaptation.

Sustainable Development Characteristics

Greenhouse gas emissions are very likely the cause of global warming (Bernstein et al., 2007) and climate change is a long-term problem with complex environmental, economic and social repercussions for all life on the planet (Aben, Hartley & Wilkening, 2010). The global atmospheric concentration of carbon is now above the level on which the Intergovernmental Panel on Climate Change (IPCC) based its worst-case calculations (Harford, 2008; IPCC, 2007a). Climate change impacts such as water shortages and fire associated with frequent drought, flooding in other areas, species stress and ecosystem collapse may occur more quickly than originally thought, resulting in high social and financial costs to communities and industry (Harford, 2008; Hansen et al., 2010; Guyatt et al., 2011; Min, Zhang, Zwiers, & Hegerl, 2011; Stern, 2007).

Government decision makers who ignore the importance of climate change mitigation and adaptation policies risk increasingly significant impacts in the communities they represent, with potentially devastating repercussions. A government that is proactive about tackling climate change is responding to changing conditions to reduce harm and promote resilience for a more sustainable future.

Climate change mitigation and adaptation strategies have many social benefits including healthier outcomes for human and non-human life, improved living conditions and more sustainable communities (Berkhout, 2005; Bosetti, Carraro & Tavoni, 2009; Garnaut, 2008; Government of British Columbia, 2008a; IPCC, 2007b; Stern, 2007; UNEP, 2011). The United Nations Environment Program (UNEP) has called for urgent action by policy makers to implement new green incentives that promote the transition to a low carbon green economy to reduce environmental risks and enhance human well being (UNEP, 2011). The green, clean or low-carbon economy is defined as the sector of the economy that produces goods and services with an environmental benefit (Muro, 2011).

Critical Success Factors

Changes that have the biggest impact on GHG reductions are often the result of induced technologies developed to save money but provincial regulations are also important drivers of technological change (Aben, Hartley & Wilkening, 2010). The model featured in this case study combines both by regulating public incentives to make a stronger business case for the innovative technology often evident in carbon offset projects. Government support made it possible to establish a viable carbon market in British Columbia; the second largest in North America (personal communication, September 30, 2011). This underscores the value of public incentives to strategically harness market-based mechanisms that address climate change while growing the green economy and catalyzing innovation outside normal channels.

By regulating public service organizations to reduce or pay to offset their annual GHG emissions, the government created a model to fund ongoing activities for Pacific Carbon Trust. This public sector regulation has helped establish a framework for change that provides the support PCT needs to tackle more complex and challenging projects than the private sector would be willing or able to take on.

Stakeholder consultation in the development of BC’s new forest carbon offset protocol or FCOP helped boost the credibility and sustainability of the outcome. This process allowed PCT to benefit from the expertise of other carbon finance, project development and sustainability actors. More consultation in the development of future offset protocols can help promote awareness of what PCT does and broaden support for the program.

Pacific Carbon Trust offsets have created a limited amount of green employment, supporting clean tech innovations. This helps facilitate the transition to a lower carbon economy and can potentially be leveraged to increase support for such initiatives in the private sector. This transference is more likely to happen if successes are well promoted.

The innovations and systems PCT supports help position BC as hub for carbon expertise, while influencing cultural norms to adopt a lower carbon economy. If BC is well marketed as a central location for carbon systems and expertise, this distinction will attract investment from around both the country and the world.

Government leadership and the certainty of carbon price signals help make the business case for offsets while promoting acceptance for innovative programs like PCT. A combination of political leadership and economic incentives made it possible for PCT to achieve its mandate but an uncertain political future may jeopardize the program’s viability.

Community Contact Information

Scott Macdonald, CEO
Pacific Carbon Trust
(250) 952-6793
d_scott_macdonald@pacificcarbontrust.com

What Worked?

A local carbon market has been established and PCT has succeeded in helping make BC the first carbon neutral senior government in North America. This allows the Province to show leadership and use this initiative as a demonstration project in support of ecological, social and economic objectives. PCT helped jumpstart the market and mitigate skepticism regarding offsets in certain key sectors, including forestry and oil and gas.

The fact that PCT is part of a larger climate change action framework supported by the government gives the Crown corporation credibility and has helped PCT tackle some complex projects using policy incentives to set long term precedents.

Most stakeholders believe PCT has been successful in achieving emissions that would not have otherwise taken place and that PCT has been successful at promoting green employment. Almost all believe PCT is helping position BC as a green innovation hub and a centre for carbon expertise.

Most stakeholders also believe the carbon-neutral government/PCT framework could work at the federal level with modifications to accommodate context specific political, economic and environmental conditions. Many stakeholders did however express reservations about timing, saying a strong economic climate and support from the federal government are also essential.

Forestry offsets are considered by most to be as valuable as any other carbon reduction strategy, if done properly. In addition, those who are familiar with BC’s Forest Carbon Offset Protocol (FCOP) believe this protocol provides a high level of quality assurance. Many stakeholders believe forestry offsets are often more valuable because of the other environmental benefits they provide, in addition to carbon reduction, such as the promotion of biodiversity, cleaner air and water. Developing a new protocol for forestry carbon offsets in consultation with stakeholders has produced an outcome most forestry and carbon accounting stakeholders now support as a valid process with high standards and credibility.

Some stakeholders are critical of PCT because the organization initially hired people without a background in carbon finance. Many critics also acknowledge that experienced professionals were harder to find at the time and those who have had personal dealings with PCT describe team members as smart and capable, noting staff have worked hard to develop new ways of doing business. Efforts to provide proponents with support helped PCT achieve its challenging first-year target and work is ongoing to improve PCT processes. This includes the development of new protocols and the aggregation of smaller projects in order to make them viable.

What Didn’t Work?

Substantive communication about the complexities of how Pacific Carbon Trust operates and results of the program have been an ongoing problem. Criticism of PCT has dominated media coverage of this sometimes confusing policy instrument, casting doubt upon its efficacy and value, in turn jeopardizing political and public support. One of the most commonly cited barriers to PCT’s effectiveness is the problem of credibility created by having public service organizations fund controversial and difficult to measure offsets in the private sector, particularly with respect to additionality. Some critics question the value of carbon offsetting in general as a means of effectively reducing GHGs. There is concern the practice encourages “free riders” or offset suppliers who might have implemented a particular pollution reduction scheme even without the offset funding because it was already in their best interests to do so. If such a project would have happened anyway under a “business as usual” scenario, the offset is not additional, and therefore of no added value.

Using funds generated from public sector organizations to buy offsets from large natural resource companies whose image is in conflict with that of the green economy has also created controversy. Some observers who recognize the value of investing in these offsets still believe negative perceptions have been harmful to the government’s climate change agenda. The government has been criticized for taking money away from cherished public institutions like hospitals and schools to pay for offsets that benefit large, profitable companies in the private sector. There has been little public defense of PCT methods or effective public outreach to explain the program. These problems are currently being addressed and $5 million in new capital was announced in the spring of 2012 to help school districts pay for energy-efficiency projects to lower GHG emissions and therefore reduce the need to purchase offsets from PCT.

Stakeholders were consulted in the recent development of B.C.’s new forestry carbon offset protocol (FCOP) but engagement was not continuous, leaving some participants feeling left out of the loop until the result was finally announced. Climate change responses must be designed and implemented by engaging a variety of stakeholders to collaborate on how best to achieve desirable yet realistic futures (Dale, 2001). An advisory panel with stakeholder representation from the private and public sectors is being created to better meet the needs of those who purchase offsets from PCT. This panel will also review the structure and diversity of PCT offsets and make suggestions about future opportunities.

Hiring PCT staff without a strong background in carbon finance was initially a barrier that made it even more challenging to meet a tight deadline to achieve carbon neutrality. Staff has since been highly praised for learning quickly on the job. As carbon markets grow, so will the number of professionals with carbon expertise but there is also a need for more education to meet current and future demand.

There has been a mismatch between the sectors where emissions are generated and where offsets have been purchased by PCT. Pacific Carbon Trust staff focussed on larger projects in order to meet the government’s target. One of the biggest barriers for smaller and more innovative projects has been a lack of protocols for certain types of activities. There was also not enough lead-time to allow the corporation to be overly selective and larger projects helped PCT meet its target. Now that Pacific Carbon Trust has successfully helped the government achieve carbon neutrality, more attention is being paid to the aggregation of smaller projects to make them viable, and the development of new protocols to support more innovative offsets.

Financial Costs and Funding Sources

Funding for PCT operations and its investment in carbon offsets is public. In addition to the $25 million dollars in seed money PCT received from the provincial government, public sector organizations (PSOs) are required to purchase offsets from PCT for their annual operating emissions. The current rate is $25/tonne, charged over and above the provincial carbon tax on fossil fuels. The money PCT collects from PSOs helps fund a variety of carbon offset projects across B.C. that include energy efficiency, fuel switching and carbon sequestration projects.

Pacific Carbon Trust leverages this public funding to reduce emissions in support of a carbon neutral government while showing leadership in transitioning to a low carbon future. The organization has also achieved some success in helping stimulate the local green economy and position B.C. as a green innovation hub and a source of systems expertise.

Research Analysis

Qualitative data was gathered to evaluate the effectiveness of this policy instrument in a series of interviews with a purposive sample of stakeholders, supplemented by a snowball sample. Interviewees included carbon finance and climate change experts, offset suppliers, proponents and public policy professionals, including representatives from public sector organizations required to purchase carbon offsets from PCT. Effectiveness was evaluated through an analysis of interviewees’ perceptions, based on their knowledge and experience.

Quantitative data was collected from PCT to examine how effectively the organization has targetted the sectors where greenhouse gas emissions (GHGs) are generated. A secondary aim of the research was to evaluate whether PCT has stimulated the local green economy and helped position B.C. as a green innovation hub. The green, clean or low-carbon economy is the sector of the economy that produces goods and services with an environmental benefit.

Detailed Background Case Description

The rationale behind the Pacific Carbon Trust model is to facilitate a carbon neutral government by purchasing offsets on the government’s behalf and to provide a vehicle and incentives for behavior change that would not otherwise take place. Emissions retired by PCT offsets must therefore go beyond ‘business as usual’, which is a distinction known as additionality. More broadly, the PCT model is an attempt to mitigate climate change while also creating economic and social benefits. The requirement to buy offsets acts as an incentive for public service organizations to reduce their emissions, while offset project funding encourages mainly private organizations in the province to implement pollution reduction strategies they can sell to PCT. These projects also help develop and diffuse leading-edge technologies and practices that trigger and support green employment, while helping position BC as a green innovation hub.

Pacific Carbon Trust is a hybrid policy instrument model that blends a market mechanism with regulation; offsets purchased by PCT help build a local carbon market while public sector organizations are required to pay PCT for their annual operating emissions. ‘Carbon’ is a term used to describe a range of GHG emissions measured in terms of their carbon equivalence.

The carbon-neutral government framework is part of a larger climate change action strategy that includes polices aimed at both mitigation (reducing the emissions that cause global warming) and adaptation (adapting policies to deal with the effects). BC’s compulsory carbon tax is a mitigation policy, while mandatory flood protection is an example of adaptation.

Most climate change impacts will be felt at the regional and local level, making action by these governments even more urgent. Local and regional governance systems and institutions can impede or enhance the transition towards sustainable development. The British Columbia government is a leader in climate change action with a range of initiatives that go well beyond those of other jurisdictions in North America.

The carbon neutrality requirement does not apply to BC municipalities but most (180 of 188) have voluntarily signed on to the BC Climate Action Charter. This charter commits local governments to become carbon neutral by 2012 in exchange for conditional grants equal to what they pay in carbon taxes. Local governments have the option of reducing or offsetting their own GHG emissions or purchasing carbon offsets. Unlike public service organizations, municipalities do not have to purchase their offsets from PCT (Government of British Columbia, 2011).

In addition to establishing a voluntary carbon market, PCT has a mandate to support and grow local green activities and stimulate the growth of a low carbon economy (Pacific Carbon Trust, 2010). PCT can also play an important business promotion role for the local carbon market. It already engages with private sector businesses that want to voluntarily reduce their emissions and PCT could become involved in new green business lines, pending approval from their Board of Directors (personal communication, March 9, 2011). Inherent in the PCT mandate are other social and economic objectives: to promote understanding about the importance of climate change action, and to demonstrate how putting a price on carbon can help contribute to such a strategy.

Many respondents expressed a desire for public bodies to be able to access financing to invest in pollution reduction schemes to reduce their own emissions. Others maintained purchasing offsets is more efficient but went on to complain that this strategy is poorly explained even within the public sector. Since interviews were completed in 2011, access to capital financing has been announced for public school boards to help pay for energy efficiency projects. There has also been an attempt to explain PCT priorities and operating policies in response to a series of critical articles published in the local media.

Skills development is another barrier identified by several interviewees, with some saying BC needs more qualified people to work in the carbon market. The fact that PCT is subject to political change is another identified barrier, often cited by the same interviewees who consider policy certainty to be a crucial component in any climate change action strategy.

The price of carbon was frequently identified as a barrier, with many interviewees insisting it must be higher to effect real change. Most insisted PCT must be willing to pay more in order to make the business case for offsets. It was also noted that paying a higher price would encourage more complex and innovative projects.

When asked whether exposure to green initiatives at work actually influences people to embrace greener choices in their personal lives, many interviewees pointed out this can only happen if realistic options to improve behaviour are readily available. This underscores the need for a massive paradigm shift to support the kinds of behaviour change programs like PCT are designed to encourage.

Strategic Questions

1. Should other jurisdictions be developing similar policy instruments to help establish and grow local carbon markets?
2. Should local and regional governments aim to become carbon neutral in order to set an example?
3. Who should participate in developing the definition of “carbon neutral”? The Sierra Club, for example, has disputed the exclusion of certain emissions in B.C., such as those associated with mining activities.
4. Should the federal government consider adopting a similar policy model to combat its image as an environmental laggard?
5. How important is it for a carbon offset program like PCT to be part of a larger climate change action framework?
6. Should this policy instrument also be used to demonstrate innovative ways to reduce greenhouse gas (GHG) emissions while helping influence cultural norms and behaviour? Can it play a part in stimulating the green economy and positioning jurisdictions as green innovation hubs?
7. Should publicly funded organizations like PCT provide whatever support proponents require to effectively prepare and package their offset projects? Or should staff make a conscious effort to defer to local carbon professionals whenever and wherever possible in order to promote the green economy?
8. Should an offset purchaser created by the public sector and the public body responsible remain silent in the face of widespread criticism? Or should such organizations engage in a coordinated communications strategy to explain why the policy instrument was created, how it operates and why people should support it? If so, how should such a communications strategy respond to public criticism of government climate change objectives and programs?
9. How important is it for communication to be transparent? Should past problems be explained along with details about how these problems are being addressed?
10. How can the benefits to society of particular sustainability programs be explained broadly enough to encourage support for a new lower carbon economy?
11. How can these benefits be personalized to encourage behaviour change?
12. Most stakeholders believe PCT should pay more money per tonne to compete with the “business as usual” scenario. Because of the abundance of hydroelectric power in B.C., it is more expensive to find emissions reductions, with less “low hanging fruit” to pick. Should jurisdictions that have more carbon intensive energy sources such as coal-fired generating plants charge less for carbon? Or should price signals be low only in the early stages of the transition period until all the less expensive projects have been picked up?
13. Should communication regarding initiatives like PCT include reassurances of policy certainty, including clear price signals for carbon to allow business to respond?
14. How important is it for public climate change action policy to be integrated across agencies and departments both horizontally and vertically? What can be done to achieve this sort of synergy if total integration is not possible?
15. How important is an integrated communications strategy to express public values and explain governance priorities and actions in support of a new paradigm focussed on sustainability?
16. How can the public be encouraged to visualize the future change sustainability initiatives can deliver with the right level of support?
17. If the value of sustainability communications is recognized, how can the story of a pioneering government as both leader and catalyst be made compelling?
18. Do public educators have a role to play in telling these stories?
19. Is it also necessary to show people how they can contribute to positive change in realistic and meaningful ways?
20. How can complex carbon finance issues be made both interesting and easy to understand?
21. Should carbon finance education be explored as both a tool of engagement and a means to increase the green talent pool? If so, should offset program principals and government experts be involved in helping develop carbon finance curriculum? Should existing carbon professionals also be consulted to ensure the education provided is relevant enough to increase the local knowledge base and encourage further growth in the market? Could this also help position the jurisdiction as a source of green expertise?
22. Should the government offer carbon education directly to its own employees, to other interested parties and to the general public? (In B.C., the publicly funded Pacific Institute for Climate Solutions (PICS) offers an online course on climate change to government employees that is now also available to the general public.)
23. To what degree should resources be invested to encourage and support smaller and more innovative projects to increase ecological benefits and garner more support for the program? Could this investment be justified because it stimulates the local green economy while helping position the jurisdiction in question as a green innovation hub?
24. Since the government can borrow at a low rate of interest, with private sector returns estimated at between 10 and 20% in some industries (personal communication, December 7, 2011) does this also help justify public investment to support some of the more creative and challenging offset projects? How important is it to tie this to the potential development of innovative technology, the creation of green jobs and the associated co-benefits of offset projects that create atmospheric benefit while protecting other important ecosystem services?
25. Should the government be willing to pay more for better quality offsets that can withstand public and private criticism?
26. Since administrative costs are a major deterrent to smaller and more innovative projects, could public investment to encourage and aggregate these projects help improve the narrative for the offset program?
27. How high should the price of carbon be (or set for the future on a clear price schedule) to make the business case for innovative carbon offsets? Should this vary by sector? How can the most effective price signals be determined in each sector?
28. How important is it to monitor the success of the program to both keep it on track and justify public investment and support?
29. How can a public offset purchaser like PCT effectively target the sectors where emissions are being generated, to demonstrate how such projects can be done? Is the match between where emissions most frequently occur and where offset projects are implemented important to the general public? Is there potential to develop a narrative around the benefits and potential co-benefits of innovative projects in the sectors where GHG emission reductions are most needed?

Resources and References

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Berkhout, F. (2005). Rationales for adaptation in EU climate change policies. Climate Policy, 5(3), 377-391. doi: 10.1080/14693062.2005.9685564

Bernstein, L., Bosh, P., Canziani, O., Chen, Z. Christ, R., Davidson, O., … Yohe, G. (2007). Climate Change 2007: Synthesis report. An assessment of the Intergovernmental Panel on Climate Change. Retrieved from http://egs.apec.org/uploads/docs/IPCC_ClimateChangeSynthesisReport2007.pdf

Bosetti, V. Carraro, C. & Tavoni, M. (2009). Climate change mitigation strategies in fast-growing countries: The benefits of early action. Energy Economics, 31(S2), S144-S151. doi: 10:1016/j.eneco.2009.06.011

Dale, A. (2001). At the Edge: Sustainable Development in the 21st Century. Vancouver: UBC Press

Dale, A. (2011). Meeting the Climate Change Challenge. SSHRC Research Proposal submitted October 17, 2011.

Garnaut, R. (2008). The Garnaut climate change review: Final report. Port Melbourne, Australia: Cambridge University Press.

Government of British Columbia. (2008a). British Columbia climate action for the 21st century. Ministry of Environment, Climate Action Secretariat. Retrieved from http://www2.gov.bc.ca/assets/gov/environment/climate-change/action/progress-to-targets/climate_action_21st_century.pdf

Government of British Columbia. (2011). Climate action charter. Ministry of Environment. Retrieved from http://www.cscd.gov.bc.ca/lgd/library/BC_CLIMATE_ACTION_CHARTER.pdf

Guyatt, D., Curtis, R., Wu, J., Liem, W., Jacobson, S., Beenan, J, …. Bauer, R. (2011). Climate change scenarios – Implications for strategic asset allocation. Mercer, Carbon Trust & International Finance Corporation. Retrieved from http://www.mercer.com/climatechange

Hansen, J., Ruedy, R., Sato, M. & Lo, K. (2010). Global surface to temperature change. Reviews of Geophysics, 48, RGR004. doi: 10.1029/201RG000345.

Harford, D. (2008). Climate change adaptation: Planning for BC. Pacific Institute for Climate Solutions. Retrieved from http://pics.uvic.ca/sites/default/files/uploads/publications/WP_Adaptation_Planning_November2008.pdf

IPCC. (2007a). Climate Change 2007: The physical science basis. Contribution of working group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M.Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

IPCC. (2007b). Climate Change 2007: Impacts, adaptation and vulnerability. Contribution of working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Parry, M.L., Canziani, O.F., Palutikof, J.P., P.J. van der Linden, P.J. and C.E. Hanson, C.E. (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

Min, S., Zhang, X., Zwiers, F.W. & Hegerl, G.C. (2011). Human contribution to more-intense precipitation extremes. Nature. 470(7334), 378-381. doi:10.1038/nature09763

Muro, M. (2011, July 13). Sizing the Clean Economy: A National and Regional Green Jobs Assessment. Brookings. Retrieved from http://www.brookings.edu/reports/2011/0713_clean_economy.aspx

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Rob Newell, Research Associate, Royal Roads University
Ann Dale, Canada Research Chair in Sustainable Community Development, Royal Roads University
Published October 15, 2011

Case Summary

This case study is a variant from the other case studies in the CRC library. It examines a program at the pilot project stage that has yet to be implemented, but we felt that there was enough information here from the preliminary research that we wanted to share these results now in the interests of speeding the exploitation of knowledge and innovation between Canadian communities. This case study analyses the potential successes and challenges that might occur with the Community Micro Lending Society’s (Victoria, BC) forthcoming Youth Micro Lending pilot project, scheduled to commence in September, 2011. When designing and developing the project, the society conducted a series of youth focus groups and administered surveys to collect information on how a micro-credit system could be specifically tailored to younger generations. This study analyzes the results of Community Micro Lending Society’s youth research and discusses the outcomes in terms of what societal factors might be conducive or counteractive to facilitating youth innovation and entrepreneurship.

Sustainable Development Characteristics

The key sustainable development characteristic of the program is its focus on attempting to reduce youth unemployment and increasing access to economic capital. Ideally, the economic, social, and ecological imperatives essential to sustainable community development must each be addressed in order to successfully achieve sustainability within community (Dale, 2001).  In this particular case, creating a fund for youth entrepreneurship promotes job growth that directly addresses the economic and social imperatives of the community.  An essential component of the social development of a community is the community members’ active participation in the economy as this promotes human capital formation (Midgley, 1999).  In addition, fostering and developing the innovation of youth not only harnesses the ingenuity of new generations of professionals, but also has the potential to reduce the need to resort to illegal activities as a means of income (Edmondson, 2009).

The Community Micro Lending Society of Victoria designed the Youth Micro Lending program to address the growing trend of youth unemployment prevalent throughout the city (and nation).  Since the recession took hold in 2008, Canadians aged 19 to 24 have experienced a disproportionate increase in both job loss (225,000) and unemployment (First Call, n.d).  In British Columbia alone, youth aged 15 to 24 comprise 28.7% of the province’s total unemployment (Ibid, n.d).  Although many people in this age range are unemployed likely because they are enrolled in secondary or post-secondary school, provincial statistics indicate that youth comprise 11.9% of the current unemployment insurance beneficiaries and this statistic is even higher for the Capital Region District of Victoria at 12.7% (BC Stats, 2010).  Consequently, access to gainful employment and financial stability in the youth demographic is an imperative in achieving sustainable community development.

The society led a series of focus groups and administered surveys to determine what needs were specific to youth in a micro-loan system.  The purpose of this preliminary work was to address the needs and qualities of youth as entrepreneurs rather than assuming that every demographic operates the same with respect to the entrepreneurial process. This case study analyses this work with respect to the potential it has for local youth engagement in the entrepreneurial process.

Potential Success Factors

Ken Stratford of Business Victoria (personal communication, July 4, 2011) described the younger demographic as the “Starbucks generation”, which refers to the multiple ways in how one can order a cup of coffee at Starbucks to customize it to specific tastes. The phenomenon of customizing a product to specifically meet one’s taste is prevalent in modern society and has created a culture of people looking for what is “just right” for them. In this manner, entrepreneurship is a viable option for today's youth as it allows them to create an employment environment that is ‘customized’ to their individual preferences and lifestyle choices.

Another factor conducive to youth entrepreneurship is the growing unemployment trends that appear to have a particularly significant effect on the youth demographic. The issues of persisting unemployment and difficulties in securing employment are compounded with the trend of the undergraduate degree decreasing the level of usefulness it held in previous generations (HRSDC, 2011). The number of adults in Victoria possessing an undergraduate degree/certificate is particularly high, with 28% of the city population over the age of 15 falling into this category (City of Victoria, 2009). With the devaluation of the undergraduate degree (in terms of enhancing employability), recent graduates face the frustration of being unemployed, or underemployed, after developing a sophisticated skill set. This is particularly problematic in British Columbia as many young people enjoy the lifestyle specific to that province. Youth might be more inclined to explore entrepreneurship to avoid being un/underemployed and use their recently acquired skill sets while maintaining their lifestyle choices.

The success of the September pilot program of the Youth Micro Lending initiative hinges on the fact that it provides a specific service that is not available elsewhere in Victoria. Lifecycles Project Society (a Victoria-based non-profit focused on sustainable food sources) previously offered a green business development program in the late-1990s to the early-2000s, but its funding was not renewed in recent years. Spectrum Job Centre has a Youth Program, however, this program is only available to at-risk youth. The Canadian Youth Business Foundation offers unsecured loans to Victoria residents, but loans are not accompanied with the mentoring and business coaching the Community Micro Lending Society will offer in the pilot project.  The society will provide unique micro-credit opportunities to youth with the necessary business guidance to develop a sustainable business opportunity, and will, therefore, fill a community niche not yet occupied in Victoria.

Community Contact Information

Community Micro Lending
202-2610 Douglas Street
Victoria, BC
(250) 590-4515

Kate Fleming
Director, Youth Micro Lending
Community Micro Lending
kate@communitymicrolending.ca

Business Victoria
Sussex Place
Suite G7, 1001 Douglas Street
Victoria, BC
(250) 384-2432
info@businessvictoria.net

What is Working?

The society's surveys revealed key data that influenced the design of the program in several ways. Surveys administered prior to program design revealed that 62% of the respondents “agree” or “somewhat agree” to Victoria’s business climate being youth-friendly. These results are encouraging in that majority of the youth surveyed believe that their entrepreneurial input would be accepted in Victoria’s business culture. Such an attitude implies that local youth might participate in a micro-credit program specific to their demographic.

Survey and youth focus group results showed many youth would prefer small loans for their first business ventures to start small, short-term operations, which is encouraging for the potential success of a youth loan program based on micro-lending. Survey respondents indicated a preference for small loans, citing difficulties in finding summer work in Victoria and a need for confidence-building through operating a smaller business for their first venture into entrepreneurship. Victoria is a city with the university culture representing a large proportion of the population (City of Victoria, 2009), and often summer jobs are subject to high competition from university students. Thus, a small loan could be useful for setting up a short-term project (i.e., house painting business, lawn-mowing, gardening, etc.), and this would allow for income generation without having to compete with the masses of students looking for summer work. In addition, small, short-term operations have the advantage of being low-risk business ventures, which could provide youth with confidence, practice, and skills for running larger businesses when they feel ready to commit to a more involved operation.

What is not Working?

The surveys and focus groups indicated issues that could present barriers to the program including the youths’ lack of confidence for starting a business due to a perception of having insufficient skills and concern for financial resources. Increasing confidence regarding skills can be addressed in a micro-credit program by including a business training component; however, the financial resources concern is more difficult to address. Financial concerns are particularly daunting to today's youth due to increasing levels of student debt, and young adults have been labeled “generation owe” due to a proportionately higher level of student loan that is common among today’s younger generation (Laucius, 2011). In addition, the higher cost of housing in British Columbia is also a major consideration. Incurring a high level of business debt for start-up and operations would discourage youth from participating in the Youth Micro Lending pilot because they would have to take on more debt above and beyond their student debt load.

Another challenge facing the design of the pilot project and youth entrepreneurship in Victoria, in general, is that self-employment is not necessarily considered as a career option to many youth in Victoria (and likely Canada). Many of the youth indicated that they envision a “normal” career pathway to consist of secondary and post-secondary schooling, followed by employment in a formal organization. The secondary school environment that is common to most schools throughout the province could be significantly influencing this idea of the “normal career path” as research has indicated that school environment does impact entrepreneurial spirit (Sobel & King, 2008). Consistent with this hypothesis, the focus group participants from the Artemis Alternative Education system displayed a higher level of entrepreneurial enthusiasm. The Community Micro Lending Society will need to address this issue through using community partner employment agencies to promote microloan and entrepreneurship to youth as a viable career option. Westley and Antadze (2009) noted that our cultural rules and beliefs can often limit our ability to engage in the innovation process, but these limitations can also be altered and amended by people.

If the pilot project evolves into a long-term program, the Youth Micro Lending initiative also faces the challenge of sustainable funding. Non-profit microcredit systems typically face funding issues, and they often have difficulties becoming self-sufficient (Visano, 2008). As a local example, Lifecycles Project Society offered a youth green-business entrepreneurship program with successful outcomes; however, the program eventually ended as it operated on an inconsistent granting system. The Community Micro Lending Society's initiative will operate as a pilot project in September, which makes it appropriate for grant funding because the pilot can serve as a short-term image of how well a fully operating program would work in Victoria. If the pilot is successful, however, then a sustainable funding scheme needs to be developed that will not be heavily reliant on ephemeral grant funding.

Financial Costs and Funding Sources

The total approximate cost of the Youth Micro Lending pilot project is $40,000, including both monetary and in-kind contributions. Funding and in-kind support is provided by a unique partnership between the United Way of Greater Victoria, the City of Victoria, the University of Victoria’s School of Public Administration, and the Prodigy Group. Any additional funds and support will be provided by the Community Micro Lending Society.

Research Analysis

The research method had two components. Qualitative data was collected through five interviews with representatives of the community involved (or previously involved) in local youth entrepreneurship programs. Quantitative and (further) qualitative data was collected through an analysis of the youth focus groups and surveys administered by the society.

As this case study focuses on its youth micro lending pilot project, many of the interviews necessarily involved people affiliated with Community Micro Lending Society. Supplementary information on other youth employment support programs and the youth entrepreneurial spirit in Victoria was collected through interviews with representatives of Business Victoria, Spectrum Job Centre, and the Lifecycles Project Society.  In addition, the primary author of this case study (Newell) attended and observed one of the four youth focus groups administered by the Community Micro Lending Society, and further insight was gathered through conversations with focus group participants.

The qualitative data examined in this case study was collected through focus groups and surveys administered by the Community Micro Lending Society to design, develop and launch the Youth Micro Lending pilot project. Four focus groups were led totaling 32 participants.  Every participant completed a survey and an additional 19 surveys were completed online, for a total of 51 surveys. Survey questions were based of a Likert scale of agree, somewhat agree, disagree and unsure, and other qualitative responses.

Detailed Background Case Description

In early 2011, the Community Micro Lending Society, a Victoria-based micro-credit organization created in 2009 by Lisa Helps (Trudeau Scholar in 2006), designed a pilot project aimed specifically at promoting local youth entrepreneurship. The Youth Micro Lending pilot project was granted funding and is scheduled to begin in September, 2011. The pilot project provides youth aged 16 to 30 with micro-loans, access to micro-credit, and Youth Micro Lending participants will also be provided with mentorship, financial literacy training, and staff support over a 14-week period (Community Micro Lending Society, 2011). The pilot project will attempt to promote a community-based support network of youth entrepreneurs by conducting the business development process in peer youth groups. Additional business support will be available to youth after the launch of their businesses.

The success of a youth micro-loans program is reliant on effective support for business development. Stratford of Business Victoria (personal communication, July 4, 2011) noted the success rate of a business dramatically increases if business coaching is available during its development. The amount of coaching and support involved in the Youth Micro Lending pilot project will require a great deal of commitment from the Community Micro Lending Society staff; however, no other institution in Victoria provides this level of support for young entrepreneurs. As learned from the focus groups, many youth are not entirely confident in their ability to start a business; thus, effective business business coaching could lead to a successful pilot and possible continuance of the program.

In addition to strong business coaching, support from community partner organizations will be required for the success of this pilot project. Many youth in Victoria (and likely throughout Canada) do not see entrepreneurship as the “normal” career pathway, and starting a business might not be a consideration for even very ambitious youth. In addition, today’s youth are heavily burdened by a student loan debt, which could serve to discourage them from incurring more debt through business loans. Stratford (personal communication, July 4, 2011) observed that Victoria has a high success rate for new businesses and suggested this could be due to the high percentage of residents with post-secondary education; however, paradoxically, student debt resulting from post-secondary also appears to hinder entrepreneurial engagement and innovation. Community partners involved in employment services, such as the Spectrum Job Centre and the Victoria Immigrant and Refugee Centre Society, will  also need to encourage entrepreneurial youth to participate in the pilot project to convey that self-employment is a viable career option.

Youth entrepreneurs have different needs than entrepreneurs of older generations. In particular, Cornell (2001) noted youth entrepreneurs prefer to work in groups of their peers, and the results of the youth focus groups and surveys confirmed this by indicating a desire from potential youth entrepreneurs for peer networks.  However, contrastingly, most of the survey participants also indicated that they would prefer mentoring from older members of the business community. The Community Micro Lending Society aims to address these preferences by designing their youth micro-credit pilot project in a manner that engages participants in peer-to-peer learning while being mentored by older members of the business community.

When asked if starting a business is realistic for a young person, 23% respondents indicated they “agree” with the statement and 49% indicated they “somewhat agree”. These results imply that youth believe (to some degree) that starting a business in Victoria is possible; however, when asked whether they thought Victoria’s business community was youth friendly, less agreement was observed (16% responded with “agree” and 33% responded with “somewhat agree”). This difference possibly exhibits a perception that the business culture in Victoria is dominated by older generations, which could explain why the majority of respondents displayed a preference for mentorship from an older adult rather than a peer.

The perception of Victoria’s business culture as not youth-friendly could be discouraging to local youth entrepreneurship, and part of the challenge for the youth Micro Lending initiative and its community partners is to successfully convey that youth entrepreneurship opportunities exist in Victoria.  The technology industry on Vancouver Island yields nearly $2 billion annually (Government of British Columbia, n.d.), and this industry holds great opportunity for youth as many of this demographic have grown-up and been educated using internet communications technologies and computer software. Only 8% of the youth survey participants, however, indicated that they would be interested in starting a business in “technology and innovation”, while 45% selected “service and hospitality”. This might be a product of a common misconception that Victoria’s largest industry is tourism, when the technology industry accumulates far more capital (Government of British Columbia, n.d.). The tourism industry is far more apparent in Victoria due to tourist operations overtly advertising the services; however, youth business opportunities could lie in the less apparent, but very large technology industry. Bers (2010) observed that, of 1,102 American teenagers surveyed, 97% play video games on a semi-regular basis. Video gaming technology has a variety of commercial applications that could be used for training programs in industries ranging from medical (Wilson, Salas, Rosen, Taekman, & Augenstein, 2008) to emergency response (EMS World, 2009). The fact that video games are entertainment may preclude youth from considering their skills with video games software as an asset elsewhere. If helped to see that their gaming skills have application in the business world, and informed about the health of the Victoria technology industry, youth might be encouraged to start up tech businesses using the programs and skills they learned growing up. Such a business idea was suggested in one of the focus groups; the idea was to create social media training programs for older generations that are not familiar with digital social media.

A large majority of survey participants indicated they required business training and mentoring from an experienced business owner to start a business; only 57%, however, indicated they would need assistance with marketing. Individuals born after 1990 have grown-up with constant access to online technology and are generally fully fluent in social media communications (Liang, Commins, & Duffy, 2010). Youth, therefore, do not feel as strong a need for learning marketing techniques likely because they have grown up with social media methods for effectively communicating to large groups of people. With respect to youth confidence (or lack of) in entrepreneurship, the fact that youth are growing up with high computer literacy could be highlighted in the business coaching and support work to illuminate their skills.

The majority of survey participants responded that they would prefer to be mentored by an older adult with business experience (76% responded “yes”) and that they would not like aid from someone their own age even if this individual worked in the same field (84% responded “no”). Declining the help of someone from their age cohort might relate to confidence issues of thinking that youth might not have enough business experience to be effective mentors. Benefiting from the experience of older generations has significant advantages. Stratford (personal communication, July 4, 2011) observed youth are being raised in a culture of instant gratification because of the increased efficiency of service systems and technology, and this affects their ability to commit to the business development process. Launching a successful business takes a great degree of patience and confidence as revenue increases incrementally.  This could be one lesson older mentors could pass onto younger generations of entrepreneurs.

The survey asked respondents whether sustainability principles would be incorporated into their business plan. The vast majority of the survey participants (87%) noted that maintaining connection to local community is important for their business values. In contrast, however, only 53% and 57% indicated that, respectively, environmental awareness and social issues were significant to their business values. The emphasis on connection to local community is consistent with youth’s desire to engage in the business development process using peer networks.

A youth micro-credit program has the potential to positively influence Victoria’s economic conditions by operating as job creation initiatives in periods of un/underemployment (Richardson, 2009) and by diversifying a local business culture’s traditional economic base.  Although many micro-credit programs, however, experience high rates of payback (Visano, 2008), sustainable funding is a common and persistent problem for micro-credit organizations (Freedman, 2000). Some proponents of micro-credit programs suggest micro-loan systems should be considered a “public good” and should, therefore, receive routine funding (Visano, 2008).  Governments change, however, and municipal, provincial, and federal support is often not consistent on a long-term basis. The Youth Micro Lending initiative, scheduled to commence in September 2011, is a pilot project and the success of this project will determine whether or not to proceed in determining how to make youth micro-credit sustainable in Victoria.

Other case studies in this library, particularly those describing alternative economic models such as co-operatives, demonstrate the importance of their contribution to sustainable community development. Their direct connection to local communities offers economic diversity, which may be an increasingly important community strategy for enhanced local agency in the face of exogenous shocks over which no one community has control. As well, access to meaningful employment of young people is critical for all communities, particularly smaller communities and single-resource communities struggling to diversify their economies. Diversity is fundamentally connected to local resilience in a community’s ability to respond, and adapt in an appropriate time frame (Newman & Dale, 2009). We have yet to realize the benefits of the ethereal economy (Ibid, 2009) or the knowledge economy, and perhaps young entrepreneurs will give greater meaning to the shape of their emergence.

Strategic Questions

1. How can the Canadian school system enhance youth innovation and encourage entrepreneurship as a career option? 
2. How does an organization and/or peer group maintain business networks?
3. How does a youth business culture effectively and cooperatively integrate itself with a traditional business culture run by older generations?
4. How can a micro-credit agency facilitate recent graduates to consider entrepreneurship as a career option in light of heavy student debt?
5. Should micro-credit be considered a “public good” and is there any role for governments?
6. Are there alternative ways to fund micro-credit systems?

Resources and References

BC Stats. (2010). Regional district 17 – Capital. Retrieved July 20, 2011, from, http://www.bcstats.gov.bc.ca/data/sep/rd/Rd_17.pdf.

Bers, M. U. (2010). Let the games begin: Civic playing on high-tech consoles. Review of General Psychology, 14(2), 147-153. doi: 10.1037/a0019490.

City of Victoria. (2009). City of Victoria census information. Retrieved July 22, 2011, from, http://www.victoria.ca/cityhall/pdfs/sustainability-census-education.pdf.

Community Microlending Society. (2011). Youth community partners: send youth our way. Retrieved July 25, 2011, from, http://www.communitymicrolending.ca/#!__youth.

Cornell, R., & Organisation for Economic Cooperation and Development, P. (2001). Putting the Young in Business: Policy Challenges for Youth Entrepreneurship. Territorial Development. LEED Notebook No. 29.Dale, A. (2001). At the Edge: Sustainable Development in the 21st Century. Vancouver: UBC Press.

Edmondson, V. C. (2009). A new business: Redirecting black youth from the illegal economy. [Article]. Reclaiming Children & Youth, 18(3), 16-20.

EMS World. (2009). High-tech video game to train EMS in disaster response. EMS Magazine, 38(6), 16-16.

First Call: BC Child and Youth Advocacy Coalition. (n.d.). Youth specific employment service delivery model in BC. Retrieved July 20, 2011, from, http://www.firstcallbc.org/pdfs/transitions/2-employment%20services.pdf.

Freedman, M. (2000). Challenges to launching grassroots microlending programs: A case study. Journal of Developmental Entrepreneurship, 5, 235.

Government of British Columbia (n.d.) Vancouver Island and coast – Victoria economy. Retrieved July 21, 2011, from http://www.welcomebc.ca/wbc/index.page?WT.svl=Top.

Human Resources and Development Canada. (2011). Indicators of well-being in Canada. Retrieved July 20, 2011, from, http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=29.

Laucius, J. (2011) Generation Owe; College students already face whopping student loans and gambling debts. Retrieved April 22, 2011, from, http://www.mec.ca/Main/content_text.jsp?FOLDER%3C%3Efolder_id=1408474396038943.

Liang, B., Commins, M., & Duffy, N. (2010). Using social media to engage youth: education, social justice, & humanitarianism. Prevention Researcher, 17, 13-16.

Midgley, J. (1999). Growth, redistribution, and welfare: Toward social investment. The Social Service Review, 73 (1), 3-21.

Newman, L. and A. Dale. (2009). Large footprints in a small world: toward a macroeconomics of scale. Sustainability: Science, Practice, & Policy, 5(1): 9-19.

Richardson, M. (2009). Increasing microlending potential in the United States through a strategic approach to regulatory reform. [Article]. Journal of Corporation Law, 34(3), 923-942.

Sobel, R. S., & King, K. A. (2008). Does school choice increase the rate of youth entrepreneurship? Economics of Education Review, 27(4), 429-438.

Visano, B. (2008). Different and unequal: Payday loans and microcredit in Canada. Journal of Economic Asymmetries, 5(1), 109-123.

Westley, F., & Antadze, N. (2009). Making a difference: Strategies for scaling social innovation for greater impact. The Innovation Journal, Pg 34.

Wilson, K. A., Salas, E., Rosen, M., Taekman, J., & Augenstein, J. (2008). Games doctors play: Guiding principles for using simulations to train shared cognition. International Journal of Cognitive Technology, 13(2), 8-16.

Chris Strashok, Research Associate, Canada Research Chair in Sustainable Community Development
Published May 13, 2011

Case Summary
Mountain Equipment Co-op (MEC) is a Canadian-owned and co-operatively run provider of equipment for self-propelled, wilderness-oriented recreation. MEC consists of 14 stores across Canada with 1,500 employees and 3.3 million members (MEC Accountability Report, 2009). The co-operative business model is based on representative democracy and a model of co-operation, rather than competition. This ‘alternative’ model has allowed MEC to be competitive in the Canadian marketplace for 40 years, while integrating sustainable development into its business and addressing the environmental, social and economic imperatives simultaneously.

Sustainable Development Characteristics
This case study demonstrates two key features of sustainable development—an alternative governance model, that is, a co-operative business model, and its attention to protecting the environment while at the same time providing safe, clean and plentiful spaces for outdoor recreation. MEC and its members lead by example. Sustainable development and long-term planning is ingrained within MEC’s operations. The founders started the company with sustainable development in mind, fostering a visceral connection between the products they sell and the environment they enjoy. This connection has given MEC a strong understanding of why it is here, where it came from, where it is and where it wants to go in the future. Its strong identity allows MEC to be a confident organization, focusing on engagement with its members and their communities while at the same time moving to a lower-impact business model in a business environment where this is not the norm.

To realize its vision MEC identified the following six priorities where it believes it is best positioned to make a difference.

1. Reducing material waste and harmful substances in our products.
2. Improving our energy, carbon, and water footprint.
3. Improving the human condition in our factory communities.
4. Enhancing the recreation and activity culture in Canada, especially in relation to youth.
5. Supporting conservation of ecologically and recreationally important places.
6. Inspiring others and accelerating systemic change towards sustainability in the marketplace, through engagement and advocacy (MEC Accountability Report, 2009).

The co-operative governance structure in and of itself has also been a key factor for embedding sustainable development principles into the organization’s operations. As a co-operative, the organization is guided by seven co-operative principles:

1. voluntary and open membership;
2. democratic member control;
3. member economic participation;
4. autonomy and independence;
5. education, training, and information;
6. co-operation among co-operatives; and,
7. concern for community.

MEC's commitment to these principles ensures the company integrates both the social and economic imperatives of sustainable development with their environmental concerns. As a group, MEC and its member owners have created a network of support where knowledge and experiences around adventuring outdoors in a sustainable way can be shared, and innovation in protecting outdoor spaces can flourish.

Critical Success Factors
The success of the MEC model can be attributed to several factors, which have led to the generation of trust capital: its deep commitment to the co-operative’s purpose; commitment to the seven co-operative principles, and connection with their members. MEC has grown and sustained itself as a successful business by having a strong sense of where they came from and why they are in business. MEC’s purpose for being is “to help people enjoy the benefits of self-propelled, wilderness-oriented recreation. We do that by selling outdoor gear, clothing, and services (MEC Accountability Report, 2009)”. This clarity of purpose combined with their commitment to the co-operative principles ensured that it integrates environmental, social and economic concerns into its business operations. This integrated way of thinking is displayed in MEC’s hiring patterns. Employees who work for MEC tend to be individuals who participate in outdoor recreational activities, bring a passion for the outdoors to their jobs, and symbolize the culture that MEC wants to reflect. These individuals are not necessarily experts in sales, business development, purchasing or other typical business skills. MEC feels, however, that these skills can be learned, unlike the passion that they bring for the outdoors. This authenticity is transferred to the sales style that is used on the floor of every MEC store. Front line staff is able to focus on sharing information and knowledge about MEC’s products helping members purchase the gear that best fits their needs, instead of focusing only on profit maximization. By hiring people who use the gear, MEC stays close to its grassroots, allowing it to meet the needs of its members consistently year over year while staying away from fads or trends in the marketplace. This consistent delivery of high value products and services, guaranteed advice, passion for the outdoors, and commitment to the purpose of the co-operative has produced high levels of trust and brand loyalty amongst its members, which has translated into 3.3 million members since its inception.

Community Contact Information
Esther Speck
Director, Sustainability and Community
Mountain Equipment Co-op
Vancouver, British Columbia, Canada

What Worked?
MEC has remained relevant, even as more competition has entered the marketplace, year over year by consistently meeting the needs of its members, and by producing and offering high quality gear at affordable prices. All of MEC’s decisions and operations are geared toward this member-centric mentality and they do this by:

• Knowing their members - Because each customer is also a member MEC has access to the retail data associated with each member. This allows MEC to better understand their customers purchasing needs, focusing the business towards what their members want.

• Providing a ‘rock solid guarantee’ - MEC has one of the best warranty and return policies in the outdoor clothing and equipment industry. Its policy is unique in some parts of Canada such as Halifax where one interviewee noted that retailers are not willing to give refunds on returned purchases.

• Slow conservative growth – As a co-operative there is no pressure from shareholders to maximize the company’s profits, which gives MEC the ability to be financially conservative growing the company slowly and as needed.

• Passion for the outdoors – MEC is a values-based organization, which hires people that share the same culture of sustainable outdoor recreation. The staff's knowledge and experience about the MEC gear and the activities in which MEC members engage, ensures that MEC offers high quality gear while matching members with gear that suits their needs.

• Consistency and trust – MEC has converted its focus on its members' needs into offering consistent products over the life of the co-operative. The reliability of MECs products generates a large amount of trust and brand loyalty, making MEC one of the top Canadian retailers of outdoor recreation gear.

What Didn’t work?
To purchase goods from a co-operative generally you must join the co-operative, and this is the case with MEC: purchasers must buy a life-time membership at a onetime cost of five dollars. For some consumers, the fee is a barrier to purchasing MEC's products. In extreme cases, individuals refuse to become a member, while most see it as merely an obstacle to overcome in order to fulfill their purchase. The relevance of being a member of a co-operative is often lost on the average person and they do not know how to engage with MEC. The consumers' mentality is geared towards the more common private business model. To these individuals, MEC is simply a store. This is common within the general public and there are many misconceptions regarding the significance co-operatives play and could play within Canada. The general picture of a co-operative is that of small, inefficient and often marginal business. When compared to corporations, many view the co-operative model as inferior and not as competitive in the marketplace. By their nature, co-operative models are not self-promotional; they are created in order to serve their member needs and are not an entity like a corporation. Also MEC does not use traditional advertising or marketing techniques, relying heavily on word of mouth. Because of this, MEC has a strong presence in western Canada where MEC was started, but is weaker in eastern provinces like Quebec and Nova Scotia where MEC is new. With 3.3 million members, MEC also struggles with engaging all of its members. As with many democratic organizations, it is sometimes the group that makes the most noise that gains the most attention. There are historical and cultural tensions also at play within the co-operative that can make change challenging. One interviewee highlighted the resistance from a small group of long-time members when MEC tried to give its gear a more aesthetic quality. This group argued aesthetics would take away from the quality of the products and delayed this change.

Financial Costs and Funding Sources
Co-operatives are privately funded, relying on a group of individuals (members) to pool their resources together to raise sufficient operating capital. These individuals also need to be willing to receive a return-on-investment in a form that is not purely financial, realizing they are investing in both themselves and their communities.

At its inception in 1971, initial funding for MEC came from the six founding members and was run voluntarily for the first three years. By 2010, MEC has grown to 3.3 million members with total sales reaching $261 million (Mountain Equipment Co-op, 2011b), making MEC Canada’s largest supplier of gear for self-propelled outdoor recreation. The only external source of funding comes from the five dollar lifetime share in the co-operative, which must be purchased in order to buy gear.

As with all co-operatives, no surplus profits are retained at the end of the fiscal year since any remaining surplus is paid back to members in the form of patronage return. This is one of the challenges of the co-operative business model. Profits are either shared among member owners based on how much the member uses the co-operative or invested back into the co-operative to improve the services provided to the members, and to sustain the business. Because of this, MEC is financially conservative, growing slowly and taking few risks. This can be challenging when the business is moving through different stages of growth. It does, however, create space for creative solutions and capital remains local benefiting the communities in which MEC operates.

Research Analysis
This research involved a literature review of journal articles relating to the co-operative model, documents from the company, and interviews with eleven individuals associated with MEC, using a semi-structured questionnaire. Interviewees included a representative sample of front line employees, middle and senior managers, and board members. The interviews were open-ended conversations about MEC itself, co-operative models in general, and the role they play in the Canadian economy and in the implementation of sustainable development.

Detailed Background Case Description
MEC is a Canadian-owned and operated provider of equipment, service and expertise for self-propelled, wilderness-oriented recreation. The co-operative was founded in 1971 with six members and $65 of operating capital with the goal of provided climbing gear for climbers in the Vancouver, Canada area who were looking for reliable gear at a reasonable cost (Mountain Equipment Co-op, 2011b). To this day, MEC’s mission is still to provide reliable gear at a reasonable cost. By staying true to its mission, MEC has grown to be Canada’s largest supplier of gear for self-propelled outdoor recreation, which in 2009 saw sales reach $262 million across their 14 stores across Canada, while employing 1,500 staff and serving 3.3 million members (MEC Accountability report, 2009).

The Cooperative model
A co-operative is an organization that is owned by the members who use its services. All co-operatives must adhere to the seven co-operative principles:

1. voluntary and open membership;
2. democratic member control;
3. member economic participation;
4. autonomy and independence;
5. education, training, and information;
6. co-operation among co-operatives; and,
7. concern for community.

MEC’s commitment to these seven principles has meant that the organization integrates environmental, social and economic concerns into the bottom line of their business, focusing on a long-term business view and the value it provides to its members beyond return-on-investment. Novkovic (2006) argues, however, that this integration of environmental social responsibility into business practices is not unique to co-operatives, and any investor-owned business can and does incorporate environmental and social responsibility and business ethics into its operations, calling into question the role these co-operative principles play in defining the unique co-operative advantage. Others argue that the degree of integration of environmental and social responsibility into traditional business entities is more shallow than deep (Dale, 2001; Dale, submitted; Roseland, 1999). This case study demonstrates that adherence to, and the open and transparent commitment to the principles of the co-operative model at its very inception make this unique to the co-operative model. Moreover, it also led to an early alignment to and business leadership for more sustainable community development, defined as a process of reconciliation between the environmental, social and economic imperatives (Dale 2001; Robinson & Tinker 1997).

It is also clear that being a co-operative does not necessarily guarantee the application of the co-operative principles to business practices, without strong commitment and leadership around their implementation throughout a business. However, it does make it more likely given the public declaration and commitment to these principles and their transparency, coupled with its governance structure. This is because co-operative principles are present right from the inception of the organization and form the foundation of the co-operative business model, placing the pursuit of economic goals secondary, to ensure that the aims of the co-operative are accomplished. This is in contrast to most investor-owned businesses where the focus is on maximizing profits first while other goals and aspirations are secondary and often flexible, allowing them to be reoriented to suit the needs of the investors and markets (Gertler, 2004).

All of the individuals interviewed recognized the importance of the co-operative values and principles to MEC. These values are the foundation for the business and are imperative to helping the business focus on why it is here now and in the long-term, while honouring the social contract the organization has with its membership. Embracing the co-operative values and principles has also ensured that MEC operates transparently, building trust with its members.

Governance Structure
MEC is classified as a first tier co-operative, meaning that the co-operative provides services directly to the members. Because of this, 100% of MEC’s business is with its member owners. Currently there are 3.3 million member owners making MEC the fourth largest democratic entity in Canada, after the governments of Canada, Ontario and Québec (Canadian Co-operatives Association, 2008). Each member is entitled to one vote to annually elect members to a lay board consisting of 9 directors who serve on the board for a three year period.

Due to the size of its membership, one of the challenges for MEC has been engaging this diverse community in the election process. In 2009, 32,056 votes were casts or 1.07% of the membership. Membership engagement is a predominant problem with large consumer co-operatives like MEC (Cole, Herbert, McDowall & McDougall, 2010). One reason is that many MEC members only buy memberships as a prerequisite for purchasing goods. Many of its members do not understand, therefore, what it means to be part of a co-operative, engaging with the organization only when the product they want is available at the lowest price. Because of this lack of awareness, MEC is often mistaken for buyers’ clubs like Costco, where a membership is also required to purchase goods. The difference being that Costco members have no direct say in how the company is operated.

There are also unique challenges associated with having a representative democracy governance structure. Since MEC’s management does not hand pick their own directors, the board may lack business skills and experience needed to govern the organization (Bond, Carter, & Sexton, 2009). MEC’s diverse member base creates challenges to getting the skills needed to run the organization. MEC recognizes, however, that an active democratic process requires time and energy, and an ongoing educational process. Therefore, MEC strives to clearly communicate to its members which skills sets are currently required at the board level while investing in board training when necessary as well as engaging external expertise when needed.

Because of the diversity of perspectives, decision-making through consensus also means that the cooperative model, in general, sometimes responds more slowly to business innovation. Co-operatives also run the risk of being politicized by groups within the membership taking the organization in a direction that is not necessarily best for the business. There are historical and cultural tensions at play within MEC that can make change challenging. One interviewee highlighted the resistance from a small group of long-time members when MEC was trying to give their gear a more aesthetic quality. This group argued aesthetics would take away from the quality of the products and delayed the change. Once these challenges have been navigated, decisions are produced that members, who are both investors and consumers, can relate to and fully support allowing MEC to produce goods and services that are better received by the market and to move ahead quickly on initiatives (Lotti, Mensing, & Valenti, 2006). The results of this democratic decision-making process often yield trust, greater commitment and the facilitation of shared knowledge (Birchall & Ketilson, 2009).

Finally, the directors are a key link between the members and the rest of the organization, therefore the trust generated between managers and members is essential to accommodate the flattened hierarchies in which MEC and other co-operative models operate (Jones & Kalmi, 2008). The board, and therefore the organization, tend to approach decisions with a focus on the co-operative values, putting pressure on managers in different ways than corporations. This dynamic between the board and management can be a challenge if the managers do not understand what it means to be a co-operative. This is particularly a challenge as the co-operative grows and there is the need to hire managers from outside the organization who may not have an awareness of the values that guides the co-operative's operations. Alternatively, board members need to be aware of the nature of the retail industry. As a retail business, MEC needs to provide goods and services to their members otherwise the co-operative will not have any value for its members and become obsolete. This gap between managers and members is common in co-operative organizations, and highlights the challenges of balancing the business and social functions of a cooperative organization in an environment where competitive corporations are the norm (Novkovic, 2006).

Sustainable Development
MEC understands that everything they make, say, or do has an environmental, social or economic impact on the planet. This understanding has been present since its inception and drives MEC’s commitment to making and selling products with people and the planet in mind. According to one interviewee, this dedication has resulted in 75% of MEC’s operations having been integrated with sustainable development principles. Through the interview process, it was also clear that as an organization MEC is curious about possibilities, creative in its approaches and dedicated to its core value of helping people enjoy self-propelled, wilderness-oriented recreation by providing equipment and advocating for the environment. The following priorities highlight the key areas where MEC feels it is positioned to make a difference in regards to sustainable development.

1. Product Sustainability
Manufacturing products is where the biggest impact on water, materials and energy occurs for MEC. In order to reduce the environmental footprint of their products and, therefore, its impact on the environment, MEC started directly sourcing textiles from mills that are partners. As reported in MEC’s 2009 Accountability Report, 21% of their directly-sourced mills had become Bluesign System Partners producing around 390,000 out of 1,920,000 yards of fabric. MEC's goal is to have 70% of their mills become Bluesign partners, by 2012. In addition to the application of health and safety standards for the textile industry, MEC also offers products that contain at least 50% organically grown cotton or recycled polyester, or are completely PVC-free.

2. Greening Operations
MEC understands that leading by example is a powerful tool for change. To ensure that its day-to-day operations have as small an impact on the environment as possible, MEC strives to reduce the environmental impacts of the transportation of its products and the operation of its buildings. Some of the ways MEC is minimizing its impacts is by searching for sources of alternative and low impact energy to power its stores while moving towards zero waste, by considering how much fabric is left on factory floor, and the garbage that leaves their stores.

Although considered to be at the leading edge of sustainable operations, three of the individuals interviewed expressed MEC’s desire to go even further and to be an innovator in greening its operations. One way MEC is doing this can be seen in their newest building in Burlington, Ontario. Not only is the building designed to meet LEED Gold certification, it has also been designed to be disassembled and repurposed at the end of the building's lifecycle. This is part of MEC’s Green Building Systems development, which is an evolution of the LEED process. MEC believes one of the limitations of LEED is that it only captures a snapshot in time, usually before the building is operating. The intention of MEC's Green Building System is to consider the entire life of the building and its possible uses over time, and to incorporate these considerations into the building design.

3. Improving the human condition in our factory communities
The forces behind current human conditions in factory communities are complex and driven by flaws in our economy and society. MEC recognizes that it has a part to play in this system and are committed to making change through its ethical sourcing policy. As part of this policy, MEC has audited 75% of their active MEC-brand factories to understand how these factories' business and labour practices relate to MEC’s Supplier Code of Conduct. Based on this audit, the majority of infractions were found to be health and safety related. However, 229 black code violations were found in 21% of factories. These violations consist of practices that impede audits, involuntary overtime, or withholding passports for migrant workers (MEC Accountability Report, 2009).

To resolve these violations, MEC believes in building trust, empowering workers and factory managers, and building alliances with industry (Mountain Equipment Co-op, 2011c). According to one interviewee, building alliances within industry is an important part of the MEC process as it is a relatively small organization within the global marketplace and by itself has little influence. "Empowering workers and factory managers is also critical as we need to understand what the local workers needs and priorities are without projecting our own western views." By empowering these individuals, MEC is fostering social capital in the communities giving them tools to take action for themselves.

4. Advocacy
Advocacy is a critical part of MEC’s success as a business and in furthering sustainable development issues. MEC understands that to be part of the community in which it operates and plays, it has a responsibility to protect that space. MEC’s vision for this is that “Canada will be home to the world’s most comprehensive network of parks and protected areas and sustains the world’s most outstanding outdoor playground. Self-propelled outdoor activity will be a primary feature of Canadian culture and lifestyle (Mountain Equipment Co-op, 2011a).” To do this, MEC has developed a network of partnerships with conservation and outdoor community groups such as 1% for the Planet and The Big Wild while founding Leave No Trace Canada. Advocacy is an essential part of taking a leadership role to inspire others to accelerate change towards a sustainable world.

One of the challenges MEC faces with being so active in its communities is what two interviewees called the halo effect, where members make the assumption that MEC is doing more than it really is. To counter this, MEC ensures that it is open and transparent with its members, communicating and educating them about what MEC is engaging in. This transparency can also mitigate the possible erosion of trust capital that can be caused by the green washing that is occurring in the marketplace.

Role in Canadian Economy
As with any business in Canada, MEC provides goods and services and jobs to the Canadian economy, and like any other business there needs to be a demand for these goods and services. In many instances, this demand is created by producing goods and services that are more convenient or better priced than what is currently available (Novkovic, 2006; Zeuli & Cropp, 2004). For MEC, this means being committed to providing high quality gear for outdoor adventuring for its members. MEC also feels that its role is also to model a different way of doing business. Everything MEC does is put under the context of MEC’s vision and values, which has a strong sustainable development component, instead of the lens of profit maximization. Since MEC is not solely focused on the bottom line, it is able to foster collaborative connections with other organizations and the communities in which it operates. This gives MEC, and other co-operatives, access to social and economic capital that it does not have and creates opportunities to innovate through collaboration.

 MEC's different way of doing business has also fostered high employee loyalty in a business that is seasonal in nature and in an environment with a traditionally high employee turnover rate. MEC's employees tend to be individuals who participate in outdoor recreational activities, bring a passion for the outdoors to their jobs and symbolize the MEC culture. These employees are not necessarily experts in sales, business development, purchasing or other typical business skills. MEC feels these skills, however, can be learned unlike the passions that they bring with them for the outdoors. This authenticity is transferred to the sales style on the floor of every MEC store. By hiring people who use the gear, MEC stays close to its grassroots, allowing it to meet the needs of its members consistently year over year while avoiding fads or trends in the marketplace. Keeping members interested in your products in a competitive marketplace is a major challenge for a retail co-operative like MEC and it is this employee engagement that helps foster strong relationships between MEC and its members (Birchall & Ketilson, 2009; Herbert, Cole, Hardy, Lavallee-Picard, Fletcher, 2010; Lotti, Mensing, & Valenti, 2006).

MEC is conscious of its overall growth strategies since no profits are retained at the end of the fiscal year; profits are shared with their members and invested back into the organization. Lack of a financial cushion creates challenges for retail co-operatives such as MEC. Because consumers have choice, MEC cannot simply increase prices to cover its sustainable practices. However, this also creates slower growth cycles, which when combined with the longer-term view of business that co-operatives take provides a balance to the drive for continual growth seen in our current economic paradigm. Slower growth cycle combined with a consensual decision-making process has also allowed MEC to sustain itself since its inception.

Challenges of the Model
One challenge to the co-operative sector, and to MEC in particular, is the lack of co-operative brand. Since MEC was created as a tool to serve its member needs and is not an entity like a corporation, MEC is not focused on marketing campaigns promoting its brand or recruiting customers. MEC relies solely on word of mouth. Unfortunately, when compared to countries like Italy and Spain, Canada (with the exception of the province of Quebec) also lacks a strong co-operative network to promote the co-operative brand and its advantages. As a result, there are many misconceptions about the co-operative model in Canada (Lotti, Mensing, & Valenti, 2006) and co-operatives are often assumed to be small- to medium-sized, local affiliations not able to compete in the wider marketplace. This is ironic given that MEC is the largest supplier of gear for self-propelled outdoor recreation in Canada and the fourth largest democratic entity in Canada with 3.3 million members.

Two of the individuals interviewed suggested, and Christianson (2007) argues as well, that a lack of awareness is also prevalent in all levels of Canadian government and because of this, government does not actively promote co-operatives as a viable business model to the Canadian public, which limits the potential impact co-operatives on the Canadian economy. Many of the policies and legislation pertaining to business in Canada, such as how capital is classified, the classification of dividends versus patronage payments, and tax incentives for investing in co-operatives do not recognize the unique nature of co-operatives and limit MEC’s ability to be innovative with regards to financial arraignments with its members (Brown, 1997). In addition, the co-operative business model is also not taught in Canadian business schools further compounding a lack of awareness. By not fully including co-operatives in the economic equation, we limit our options for creating a diverse and healthy economy.

Many of MEC’s customers are interested only in the retail experience and are not concerned about MEC’s co-operative structure or values. One of the individuals interviewed pointed out that if you examine MEC’s membership and where they shop after MEC, their next biggest stop is Canadian Tire. So, like any other business MEC needs to provide a level of engagement with its members/consumers, which others are not able to provide. However, as indicated by another interviewee it is this ability to combine business with environmental and social concerns that does capture some consumers and draws them back to MEC. This individual stated that consumers come for the MEC brand and products, but many keep coming back because of MEC’s values and commitments.

Another challenge faced by MEC is that of scale: what is an optimal scale? MEC is a large company with 14 stores across Canada and 3.3 million members. With such a large member base, which spans multiple generations and backgrounds, MEC needs to engage its members and anticipate changes in their needs. Unfortunately, as a retailer MEC has limited opportunities and reasons for engagement with its members because its products and services are not as essential to the daily lives of the members as say a worker or a financial co-operative. A lack of engagement may potentially move MEC away from the co-operative's original purpose, and create a threat to organizational integrity. This question, however, is not unique to the co-operative business model, especially those companies concerned with sustainable development.

Overall, MEC is an alternative business model to the current competition-driven model, while interacting with space, place and time in ways that complement and bring balance to the corporate business model (Gertler, 2004). Connected and committed to the prosperity of the communities in which it operates, MEC accounts for the environmental, social and economic costs of their activities, breaking down the silos between profit and non-profit sectors (Dale, 2001; Levi & Davis, 2008), allowing their business to drive sustainable development initiatives, while producing quality goods and service.

Strategic Questions

1. In what ways can MEC help promote the co-operative business model within Canada?
2. What government policies would be helpful for strengthening the co-operative sector in Canada?
3. What makes the co-operative principles so important to the success of MEC?
4. Given that sustainable development recognizes ecological limits what is the role of an organization like MEC in no-growth economy?
5. In what ways can MEC increase its role in the global community to help create sustainable factory communities?
6. What are the challenges for MEC in balancing the need to use our natural environment for recreation and the need to keep it wild and undisturbed?
7. In what ways can MEC help society create innovative solutions addressing the ecological, social and economic imperatives?
8. How does this governance structure deter members from demutualising MEC, turning it into a private business?

Resources and References

Birchall, J. & Ketilson, L. H. (2009). Responses to the global economic crisis: Resilience of the cooperative business model in times of crisis [Brochure]. International Labour Office, Sustainable Enterprise Programme. Geneva.

Bond, J.K., Carter, C. A. & Sexton, R.J. (2009). A study in cooperative failure: Lessons from the Rice Growers Association of California. Journal of Cooperatives, 23, 71-86.

Brown, L.H. (1997) Organizations for the 21st century? Co-operatives and “new” forms of organization. The Canadian Journal of Sociology, 22(1), 65-93.

Canadian Co-operatives Association. (2008). Review of Canada’s service sector. Retrieved April 25, 2011, from, http://www.coopscanada.coop/assets/firefly/files/files/pdfs/GovSubmissions/
Service_Sector_Presentation_29jan08_EN.pdf.

Christianson, R. (2007). Co-operative development in a competitive world. Retrieved July 21, 2010 from http://www.wind-works.org/coopwind/Co-operative%20Development%20in%20Competitive%20World%20Christianson.pdf

Cole, L., Herbert, Y., McDowall, W. & McDougall, C. (2010). Co-operatives as an antidote to economic growth. Sustainability Solutions Group.

Dale, A. (submitted). Introduction. In B. Duschencko, P. Robinson & A. Dale (Eds.), Urban sustainability: Reconciling place and space. Toronto: University of Toronto Press.

Dale, A. (2001). At the Edge: Sustainable Development in the 21st Century. Vancouver: UBC Press.

Gertler, M. E. (2004). Synergy and strategic advantage: Cooperatives and sustainable development. Journal of Cooperatives, 18, 32-46.

Herbert, Y., Cole, L., Hardy, K., Lavallee-Picard, V. & Fletcher, A. (2010). Literature review: Cooperatives and the green economy. Sustainability Solutions Group.

Jones, D. C. & Kalmi, P. (2008). Trust, inequality and the size of co-operative sector: Cross-country evidence. Annals of Public and Cooperative Economics, 20(2), 165-195.

Levi, Y. & Davis, P. (2008). Cooperatives as the “enfants terribles” of economics: Some implications for the social economy. The Journal of Socio-Economics, 37, 2178-2188.

Lotti, R., Mensing, P. & Valenti, D. (2006). A Cooperative Solution. Strategy + Business, 43.

MEC Accountability Report (2007). Reach: 2007 accountability report. Vancouver, Canada

MEC Accountability Report (2009). Accountability performance: 2009 interim report. Vancouver, Canada

MEC Financial Report (2009). Cosolidated Financial Statements. Vancouver, Canada

Mountain Equipment Co-op. (2011a) MEC Community Contributions. Vancouver, Canada. Retrieved April 25, 2011, from, http://www.mec.ca/Main/content_text.jsp?FOLDER%3C%3Efolder_id=1408474396038943

Mountain Equipment Co-op. (2011b) Our Co-op Roots. Vancouver, Canada. Retrieved April 25, 2011, from http://www.mec.ca/Main/content_text.jsp?FOLDER%3C%3Efolder_id=1408474396039423

Mountain Equipment Co-op. (2011c) What We're Doing. Vancouver, Canada. Retrieved April 25, 2011, from, http://www.mec.ca/Main/content_text.jsp?FOLDER%3C%3Efolder_id=2534374302883563

Novkovic, S. (2006). Co-operative business: The role of co-operative principles and values. Journal of Co-operative Studies, 39 (1), 5–16.

Robinson, J. & Tinker J. (1997). Reconciling ecological, economic and social imperatives: a new conceptual framework. In T. Schrecker (Eds.), Surviving Globalism: Social and Environmental Dimensions. London: Macmillan.

Roseland, M. (1999). Natural Capital and Social Capital: Implications for Sustainable Community Development. In J. Pierce & A. Dale (Eds.), Communities, Development and Sustainability across Canada (pp190-207). Vancouver: UBC Press.

Zeuli, K. A. & Cropp, R. (2004). Principles and practices in the 21st century. Milwaukee, WI: University of Wisconsin, Milwaukee.

Chris Strashok, Research Associate, Canada Research Chair in Sustainable Community Development, Royal Roads University

Ann Dale, Canada Research Chair in Sustainable Community Development, Professor, School of Environment and Sustainability, Faculty of Applied Social Sciences, Royal Roads University

Published January 7, 2011

Case Summary
The Co-operators Group Limited (CGL) is a Canadian owned and co-operatively run business and a national insurance and financial services provider. Through various products, it insures over 847,000 homes and 1.3 million vehicles, covers more than 41,000 farms and 120,000 businesses, protects over 665,000 lives, insures more than 267,000 employees, providess travel insurance to more than 965,000 Canadians and visitors to Canada, and provide creditor insurance to 1 million Canadians
(The Co-operators Annual Report, 2009). The co-operative business model is based on representative democracy and a model of co-operation, rather than competition. This ‘alternative’ model has allowed CGL to be competitive in the Canadian marketplace for over 60 years, while integrating sustainable development into its business lines, addressing the environmental, social and economic imperatives simultaneously.

Sustainable Development Characteristics
This case study demonstrates two key features of sustainable development—an alternative governance model, that is, a co-operative business model, and its attention to one of the most critical issues, climate change. The latter has created challenges for the insurance industry in responding to accelerating impacts. Environmental, human and economic costs associated with extreme weather events are increasing in frequency and severity year-over-year and, in 2009 alone, CGL saw these events generate 5,884 losses resulting in an estimated $55.8 million in claims.

The Co-operators has made climate change a priority by aligning its business practices with the Natural Step’s four sustainability principles and adopting the following goals to:

The biggest opportunity for CGL to change customer behaviour are the external products it offers to clients. By designing unique products such as its hybrid vehicle discounts, Enviroguard Coverage™, Socially Responsible Investments, Community Guard and Envirowise Discount™, CGL promotes more sustainable development choices to its customers.

The co-operative governance structure in and of itself has also been a key factor for embedding sustainable development principles into the organization’s operations. Operating as a co-operative means that the organization is guided by following seven co-operative principles:

1. voluntary and open membership;

2. democratic member control;

3. member economic participation;
4. autonomy and independence;
5. education, training, and information;
6. co-operation among co-operatives; and,
7. concern for community.

Thus, commitment to these principles ensures the company integrates both the social and economic imperatives of sustainable development with environmental concerns. As a group, CGL and its member owners have been able to create a network of support where knowledge and experiences around sustainable development can be shared and innovation can flourish. One board member put the intentions of CGL best, “we want to be a catalyst for change in our sphere of influence, be creative in developing sustainable underwriting and claims management and work towards anticipating the future to meet our member and client needs”.

Critical Success Factors
The success of CGL's model can be attributed to several factors: its deep commitment to the seven co-operative principles; strong leadership; its connection to community, and participation in and fostering networks of co-operatives. Since its inception, The Co-operators has been able to flourish due to committed leadership who had experience and a foundation in the co-operative model. From this experiential base, the organization has had the focus and forward thinking to invest in the development of its employees, fostering strong leadership within itself virtually uninterrupted throughout the entire life of the organization. CGL's commitment to co-operative principles ensures it integrates both economic and social concerns into the bottom line of its business, focusing on long-term business strategies and the value it provides its members beyond a purely economic return on investment. By working on behalf of its member owners, and not ambiguous shareholders, business decisions also take into account what effect they have on the communities in which CGL operates. This includes sometimes maintaining a presence in ‘non-profitable’ locations coupled with a commitment to tailor products for specific community needs. This collaboration ensures the company remains close to its grassroots. In addition to strong leadership, The Co-operators has benefited from the experience and support of the Saskatchewan Wheat Pool (prior to its demutalization) and farm-based prairie co-operatives, as well as stable access to economic capital (The Co-operators, n.d.(a)). The experience and guidance provided by these organizations was vital for CGL’s capacity to transition from the struggles of a start-up company to its current dominant place as one of the top insurance providers in the Canadian economy.

Community Contact Information
The Co-operators Group Limited 
Guelph, Ontario, Canada
Email: the_cooperators_foundation@cooperators.ca

What Worked?
The Co-operators membership consists of forty-seven different organizations throughout 7 different regions across Canada. This diverse representation of businesses from across Canada ensures that a wide diversity of perspectives and critical on-the-ground information are incorporated into the governance of the company, creating a unique opportunity for direct feedback for continuous creativity and innovation. With a smaller member base, the challenges of member engagement are reduced and CGL has been able to create a closer and more intimate relationship with its owners. It also works hard on operating transparently while building trust within the community. The Co-operators takes this trust seriously and measures it externally. Monitoring this trust building has helped to keep the organization true to its original vision and purpose, and according to one interviewee, also being able to operate without fear of internal surprises or scandal is a refreshing way of doing business. This contributes to loyal employees and high retention rates, and value is placed on creating more than just a business connection but also a relationship with their employees. As one individual stated, they get to “live their personal values at work”. Finally, since the co-operative business model is based on serving the needs of the members now and in the long term, CGL is not constrained to providing only short-term financial returns on members’ investments. This focus on longer-term financial and social prosperity, combined with the democratic process used for making business decisions, results in decisions that members relate to and fully support, thus allowing the organization to move ahead quickly on creative and innovative initiatives once decisions have been made.

What Didn’t work?
Although founded and owned by strong co-operatives and co-operative associations, there is still not a strong co-operative network established within Canada helping to promote the co-operative brand or advantage. By their nature, co-operative models are not self-promotional; they are created in order to serve their member needs and are not an entity in and of itself, like a corporation. Therefore, co-operatives spend their time serving their members and not actively advertising their co-operative business model to the general population. This is compounded by the misconception within the general public regarding the significance and of the role co-operatives play and could play within Canada. The general picture of a co-operative is that of small, inefficient and often marginal business. When compared to corporations, many view the co-operative model as inferior and not as competitive in the marketplace. Democratic structures also tend to change slowly and have a hard time being nimble when making business decisions. However, by taking the time to make a well informed decision based on consensus and member input, more integral decisions are made with full commitment from all levels of the organization, allowing the organization to move quickly on the implementation of these decisions once taken. There may also be links to enhanced innovation, although more research needs to be conducted about this relationship. Finally, The Co-operators is a large company employing 5,102 staff members and 487 agents (The Co-operators Annual Report, 2009). As new employees are hired and as employees are located farther away from the head office, it becomes more difficult to ensure equal awareness and commitment to the co-operative values of the company. There is a continual need for management to expend time and energy on providing education to staff, to ensure they understand the foundational meaning of a co-operative business model, so that everyone works towards the same vision, goals and objectives.

Financial Costs and Funding Sources
Co-operatives are privately funded businesses, relying on a group of individuals (members) to pool their resources to raise sufficient operating capital. These individuals also need to be willing to receive a return on investment in a form that is not purely financial, realizing that they are investing in both themselves and their communities.

At its inception, in 1945, the initial funding for The Co-operators came from the Saskatchewan Wheat Pool, farm-based Prairie co-operatives, and the farmers that volunteered their time to sell the insurance (The Co-operators n.d.(a)) and, by 2009, their investors have diversified to include forty-seven organizations representing agricultural, services, financial services, retail/consumer, health and labour sectors, dispersed all across Canada. Their success in finding individuals supportive of the co-operative model is due to strong commitment to the co-operative principles, and this stable access to capital is one of the reasons for CGL's longevity. As a result, in 2009, CGL’s net income was $55.5 million and its annual total revenue was approximately $3 billion, while holding more than $36.9 billion in assets, making it one of the top three insurer providers in Canada.

As with all co-operatives, profits are either shared among member owners based on how much the member owner uses the co-operative or invested back into the co-operative to improve the services provided to the members, and sustain the business. In this way, the surplus profits remain local benefiting the communities in which The Co-operators operates. There needs to be a balance between providing a return on investment to the member owners and maintaining the financial viability of the business over the longer term.

Research Analysis
This research involved interviews with nine individuals associated with The Co-operators, using a semi-structured questionnaire, a literature review of journal articles relating to the co-operative model and documents from the company. Interviewees included a representative sample of front line employees, middle and senior managers, and board members. The interviews were open-ended conversations about The Co-operators itself, co-operative models in general, and the role they play in the Canadian economy and in the implementation of sustainable development.

Detailed Background Case Description
The Co-operators is a Canadian-owned and operated multi-product insurance and financial services provider started in 1945 when a group of Saskatchewan wheat farmers pooled their collective resources to start an insurance co-operative, providing life insurance for themselves and others in the community. By 1975, the Saskatchewan group joined together with a co-operative from Ontario, created by farmers looking to insure the transportation of their livestock, creating the foundation for the formation of The Co-operators Group Limited (CGL), in 1978 (The Co-operators, n.d.(b)).

The company has evolved into one of the top national insurance and financial services providers, which, in 2009, generated a net income of $55.5 million and an annual total revenue of approximately $3 billion, while holding more than $36.9 billion in assets. CGL employs 5,102 staff members and is supported by 487 agents in 651 retail outlets. Through its various insurance products, CGL insures over 847,000 homes and 1.3 million vehicles, covers more than 41,000 farms and 120,000 businesses, protects over 665,000 lives, insures more than 267,000 employees, provides travel insurance to more than 965,000 Canadians and visitors to Canada, and provides creditor insurance to 1.0 million Canadians (The Co-operators Annual Report, 2009).

The Cooperative Model
A co-operative is an organization that is owned by the members who use its services. All co-operatives must adhere to the seven co-operative principles:

1. voluntary and open membership;
2. democratic member control;
3. member economic participation;
4. autonomy and independence;
5. education, training, and information;
6. co-operation among co-operatives; and,
7. concern for community.

The Co-operatives commitment to these seven core values has meant that the organization integrates both economic and social concerns into the bottom line of its business, focusing on a long-term business view and the value it provides to members beyond return on investment. Novkovic (2006) argues, however, that this integration of social responsibility into business practices is not unique to co-operatives and any investor-owned business can and does incorporate social responsibility and business ethics into their operations, calling into question the role these co-operative principles play in defining the unique co-operative advantage. Others argue that the degree of integration of social responsibility into traditional business entities is more shallow than deep (Dale, 2001; Dale, submitted; Roseland, 1999). This case study demonstrates that adherence to, and the open and transparent commitment to the principles of the co-operative model at the very inception of an organization make this unique to the co-operative model. Moreover, it also led to an early alignment and business leadership to more sustainable community development, defined as a process of reconciliation between the environmental, social and economic imperatives (Dale 2001; Robinson & Tinker 1997).

It is also clear that being a co-operative does not necessarily guarantee the application of the co-operative principles to business practices, without strong commitment and leadership around their implementation throughout a business. It does, however, make it more likely given the public declaration and commitment to these principles and their transparency, coupled with its governance structure. This is because co-operative principles are present right from the inception of the organization and form the foundation of the co-operative business model, placing the pursuit of economic goals secondary, to ensure that the aims of the co-operative are accomplished. This is in contrast to most investor-owned businesses where the primary focus is on maximizing profits with other goals and aspirations secondary and often flexible, allowing them to be reoriented to suit the needs of the investors and markets (Gertler, 2004).

All of the interviewees recognized the importance of the co-operative values and principles for The Co-operators. These values are the foundation of the business and are imperative to helping the business focus on why it is here now and in the long-term, while honouring the social contract the organization has with its membership. Embracing the co-operative values and principles has also ensured that CGL operates transparently, building trust within the community.

Governance Structure
Classified as a 3rd tier co-operative, CGL is the co-operative and the holding company owning 100% of the stock for The Co-operators group of companies. This organizational structure is a legal requirement as co-operatives are not allowed to sell insurance and means that the The Co-operators clients are not member owners like most traditional co-operative organizations.

 CGL is owned by 47 member organizations reflecting the agricultural, service, financial services, retail/consumer, health and labour sectors (see Figure 1). Ten percent of its business is with member owners while the remaining ninety percent is with clients who may or may not be members. These member organizations appoint delegates, approximately one hundred and ten individuals, to act as their liaison with the company. Distributed throughout 7 different regions across Canada, these delegates review operations and provide input into the direction of the organization. They also form the pool of potential board members from which the regions elect twenty-two individuals to the board of directors for CGL.



Figure 1 – Membership by sector

Being a 3rd tier co-operative has meant having a relatively small membership base for an organization of this size. Because of this, The Co-operators has been able to relieve some of the tensions that are generally part of representative democracies (Cole, Herbert, McDowall & McDougall, 2010). It has the benefits of having a big enough membership to have diverse perspectives and ideas, while still being small enough to have a more intimate relationship with their members.

There are, however, unique challenges associated with representative democracy due to this governance structure. Since The Co-operators management does not nominate its board of directors, the board can potentially lack the required business skills and experience needed to govern the organization (Bond, Carter, & Sexton, 2009). This is a minor issue according to all of the interviewees, and CGL recognizes that an active democratic process requires time and energy, and an ongoing educational process. Therefore, as one strategy to deal with potential lack of skills, board education and engagement are key policies of the organization and new board members are not left working in a vacuum.

Also because of the diversity of perspectives and some sectors that are traditionally more conservative, decision-making through consensus means that the co-operative model, in general, can sometimes respond more slowly to business innovation. Once decisions are made, however, decisions are produced that members, who are both investors and consumers of the co-operative, relate to and fully support them allowing the organization to produce goods and services that are better received by the market and move ahead quickly on initiatives (Lotti, Mensing, & Valenti, 2006). The results of this democratic decision-making process often yields trust, greater commitment and the facilitation of shared knowledge (Birchall & Ketilson, 2009).

The trust generated between managers and members is essential to accommodate the flattened hierarchies in which The Co-operators and other co-operative models operate (Jones & Kalmi, 2008). Historically, this has not always been the case and The Co-operators has gone through some growing pains. Earlier boards were initially wary of the managerial level, as many of the managers did not have knowledge of the co-operative business model or did not necessarily share the same strong commitment to the co-operative's core values. Traditionally business management expertise had come from outside of the organization where co-operative values are not widely known nor understood, while the prevailing attitude of board directors was that managers were there only to do what the board directed. As Novkovic (2006) explains, this division between managers and members is common in co-operative organizations, and highlights the challenges to balancing the business and social functions of cooperative organizations in an environment where competitive corporations are the norm.

The board and internal staff relationship has subsequently evolved and become more nuanced over time as its members realized the important role managers play in running the day-to-day activities of the business. Equally, managers have come to understand more fully the co-operative business model and its competitive advantages. To further invest in this relationship, CGL has also started to develop leadership initiatives from within the organization, such as their Building Understanding and Influence for Leadership Development program (BUILD), to address the need for greater managerial competence (The Co-operators Sustainability Report, 2009).

Sustainable Development
CGL realized that before they were able to promote sustainable ways of doing business externally, it would need to get its own organization in order. In 2006, sustainable business practices were first discussed throughout the organization. Since then CGL has:

With the understanding that if you do not measure it there is no point in doing it, each of these policies is outlined in The Co-operators 2009 Sustainability Report [report no longer available for download]. Each initiative is attached to specific goals providing a clear and accurate direction the business is taking. One interviewee noted that because this report contains vetted information that is reliable and accurate, staff at every level of the organization feel more informed and engaged, enabling them to become champions as well as senior management. This engagement encourages staff to look at their own individual sustainability actions and change their own behaviour while contributing to the overall goals of the organizations. An interviewee also noted the benefits of this self-reflection, stating that they probably would not have considered making these changes on their own accord.

Since the resources used and the waste generated by the insurance industry has a relatively small environmental footprint, the biggest opportunity for change is in the external products it offers to its clients. By designing unique products such as its hybrid vehicle discounts, Enviroguard Coverage™, Socially Responsible Investments, Community Guard and Envirowise Discount™ The Co-operators are promoting more sustainable lifestyle choices to their clients.

CGL has also taken their long-term view of doing business and applied it to developing the future generation of leaders within Canadian communities through the initiation of their IMPACT program. Started in 2009, the program is designed to empower youth and provide them with the tools and information they require to make a difference while also giving them an opportunity to create supportive networks amongst themselves. To provide ongoing support for these youth in their sustainable development projects, The Co-operators Foundation – Impact! Fund was created, which to date has provided a total of $83,685 to 13 students.

The Co-operators also reaches out, supports and mentors other co-operatives throughout Canada. In 2009, CGL supported the growth of seven co-operative organizations providing grants through their Co-operative Development Program (The Co-operators Sustainability Report, 2009). By creating strong relationships and perpetuating mutual cycles of reciprocation, a stronger co-operative sector evolves, opening up markets and connections to other networks for CGL and its members while building a stable and loyal customer base (Brown, 1997; Majee, 2008; Novkovic, 2006).

Role in Canadian Economy
As with any business in Canada, CGL’s role is to provide goods and services and jobs to the Canadian economy, and like any other business there needs to be a demand for these goods and services. In many instances, this demand is created by producing goods and services that are more convenient or better priced than what is currently available (Novkovic, 2006; Zeuli & Cropp, 2004). For CGL, this means being committed to providing stable and equitable financial coverage to all communities in Canada, even to areas, usually rural, that are deemed un-profitable by its competitors. This commitment comes from recognizing the complex value of communities and the need to serve these under-served individuals, therefore, fundamentally integrating the social imperative into their business bottom line. By being able to see past the initial outlays in the cost of operating in these communities, these opportunities are viable to The Co-operators, because the benefits go beyond a purely economic bottom line and contribute to the social mandate of the co-operative principles. This demand is also created by being flexible enough to design and customize products for different sectors within the Canadian economy such as their Community Guard offered to voluntary and non-profit organizations.

Co-operatives are also community based businesses, ranging in scale from a neighbourhood to a nation. Being a business operating at a national level means all of the profits generated by CGL stay within Canada and that Canadians are employed. This locally based business model also allows The Co-operators to be closer to the needs of the communities in which they operate giving them the ability to address market failures more quickly (Jones & Kalmi, 2008) and get resources into the communities that need and use them. This community engagement helps foster strong relationships between CGL, its members and its clients (Birchall & Ketilson, 2009; Herbert, Cole, Hardy, Lavallee-Picard, Fletcher, 2010; Lotti, Mensing, & Valenti, 2006).

Finally, because profits are shared with its members, The Co-operators has to be conscious of their overall growth strategies. This slower growth cycle combined with a longer-term view of business provides a balance to the drive for continual growth seen in our current economic paradigm. This slower growth cycle combined with a consensual decision-making process has allowed The Co-operators to sustain itself and avoid getting caught up in trends and bubbles that have often occurred in the overall global economy, since its inception.

Challenges of the Model
One challenge to the co-operative sector and to CGL in particular is a lack of co-operative brand. Since CGL was created as a tool to serve its member needs and is not an entity unto itself like a corporation, The Co-operators is not focused on marketing campaigns promoting the co-operative aspect of the company. Unfortunately Canada (with the exception of Quebec) also lacks a strong co-operative network, especially when compared to countries like Italy and Spain, to help promote the co-operative brand and advantage. As a result, there are many misconceptions about the co-operative model in Canada (Lotti, Mensing, & Valenti, 2006) and co-operatives are often assumed to be small- to medium-sized local affiliations that are not able to compete in the wider marketplace. This is ironic given that CGL is one of the top insurance companies in the country.

Two of the interviewees also revealed, and Christianson (2007) argues as well, that this lack of awareness is prevalent in all levels of Canadian government, and because of this, government does not actively promote co-operatives as a viable business model to the Canadian public, limiting the potential impact co-operatives could have on the Canadian economy. Due to this lack of knowledge, many of the policies and legislation pertaining to Canadian businesses, such as how capital is classified, the classification of dividends versus patronage payments and tax incentives for investing in co-operatives do not recognize the unique nature of co-operatives and limits CGL’s ability to be innovative with regards to financial arraignments with their members (Brown, 1997). In addition, the co-operative business model is also not taught in Canadian business schools further compounding this lack of awareness.

One way that The Co-operators is working to counter these perceptions and to educate individuals, and giving people the skills needed to operate co-operatives is through the funding the Master of Management: Co-operatives and Credit Unions degree at the Sobey School of Business at Saint Mary's University in Halifax, Nova Scotia. In addition, The Co-operators has also partnered with the University of Guelph to launch The Co-operators Center for Business and Social Entrepreneurship program
(The Co-operators Sustainability Report, 2009).

Another challenge faced by CGL is that of scale, that is, what is an optimal scale? It is a large company employing 5,102 staff members and 487 exclusive agents (The Co-operators Annual Report, 2009). As mentioned earlier, as new employees are hired and many are located farther away from head office, not everyone in the organizations is as aware of or shares the co-operative values as easily as those in head office. This can potentially move the organization away from the co-operative's original purpose, creating a real threat to organizational integrity. This is a question, however, not unique to the co-operative business model.

Overall, The Co-operators introduces an alternative business model to the current competition-driven model, while interacting with space, place and time in ways that compliments and brings balance to the corporate business model (Gertler, 2004). Connected and committed to the prosperity of the communities in which they operate, CGL accounts for the environmental, social and economic costs of its activities breaking down the silos between the profit and non-profit sectors (Dale, 2001; Levi & Davis, 2008) allowing its business to drive sustainable development initiatives, while producing quality goods and service.

Strategic Questions

1. In what ways can The Co-operators help promote the co-operative business model within Canada?
2. What government policies would be helpful for strengthening the co-operative sector in Canada?
3. What makes the co-operative principles so important to the success of The Co-operators?
4. Given that sustainability recognises ecological limits, what is the role of an organization like
   The Co-operators in a no-growth economy?
5. How will The Co-operators balance rapidly increasing claims from climate-related damages with the co-operative principle of supporting communities?
6. In what ways can The Co-operators help society create innovative solutions addressing the ecological, social and economic imperatives?
7. How does this governance structure deter members from demutualizing The Co-operators, turning it into a private business?
8. Do you see an instance where the company has not yet achieved full integration of sustainable development?

Resources and References

Birchall, J. & Ketilson, L. H. (2009). Responses to the global economic crisis: Resilience of the cooperative business model in times of crisis [Brochure]. International Labour Office, Sustainable Enterprise Programme. Geneva.

Bond, J.K., Carter, C. A. & Sexton, R.J. (2009). A study in cooperative failure: Lessons from the Rice Growers Association of California. Journal of Cooperatives, 23, 71-86.

Brown, L.H. (1997) Organizations for the 21st century? Co-operatives and “new” forms of organization. The Canadian Journal of Sociology, 22(1), 65-93.

Canadian Co-operatives Association. (n.d.). Co-op facts and figures. Retrieved December 12, 2010, from http://www.coopscanada.coop/en/about_co-operative/Co-op-Facts-and-Figures.

Christianson, R. (2007). Co-operative development in a competitive world. Retrieved July 21, 2010 from http://www.wind-works.org/coopwind/Co-operative%20Development%20in%20Competitive%20World%20Christianson.pdf

Cole, L., Herbert, Y., McDowall, W. & McDougall, C. (2010). Co-operatives as an antidote to economic growth. Sustainability Solutions Group.

The Co-operators Annual Report. (2009). We are evolving: The Co-operators Group 2009. Ontario, Canada.

The Co-operators Sustainability Report. (2009). Making an impact: The Co-operators 2009 sustainability report. Ontario, Canada.

The Co-operators. (n.d.(a)). 1940s. Ontario, Canada. Retrieved December 12, 2010, from http://www.cooperators.ca/static/pdf/en/History_1940s.pdf

The Co-operators (n.d.(b)). The Co-operators Group. Ontario, Canada. Retrieved December 12, 2010, from http://www.cooperators.ca/static/pdf/en/CooperatorsGroupEN.pdf.

Dale, A. (submitted). Introduction. In B. Duschencko, P. Robinson & A. Dale (Eds.), Urban sustainability: Reconciling place and space. Toronto: University of Toronto Press.

Dale, A. (2001). At the Edge: Sustainable Development in the 21st Century. Vancouver: UBC Press.

Gertler, M. E. (2004). Synergy and strategic advantage: Cooperatives and sustainable development. Journal of Cooperatives, 18, 32-46.

Herbert, Y., Cole, L., Hardy, K., Lavallee-Picard, V. & Fletcher, A. (2010). Literature review: Cooperatives and the green economy. Sustainability Solutions Group.

Jones, D. C. & Kalmi, P. (2008). Trust, inequality and the size of co-operative sector: Cross-country evidence. Annals of Public and Cooperative Economics, 20(2), 165-195.

Levi, Y. & Davis, P. (2008). Cooperatives as the “enfants terribles” of economics: Some implications for the social economy. The Journal of Socio-Economics, 37, 2178-2188.

Lotti, R., Mensing, P. & Valenti, D. (2006). A Cooperative Solution. Strategy + Business, 43.

Majee, W. (2008) Cooperatives, the brewing pots for social capital! An exploration of social capital creation in a worker-owner homecare cooperative. Milwaukee, WI: University of Wisconsin, Milwaukee.

Novkovic, S., 2006. Co-operative business: The role of co-operative principles and values. Journal of Co-operative Studies, 39 (1), 5–16.

Robinson, J. & Tinker J. (1997). Reconciling ecological, economic and social imperatives: a new conceptual framework. In T. Schrecker (Eds.), Surviving Globalism: Social and Environmental Dimensions. London: Macmillan.

Roseland, M. (1999). Natural Capital and Social Capital: Implications for Sustainable Community Development. In J. Pierce & A. Dale (Eds.), Communities, Development and Sustainability across Canada (pp190-207). Vancouver: UBC Press.

Zeuli, K. A. & Cropp, R. (2004). Principles and practices in the 21st century. Milwaukee, WI: University of Wisconsin, Milwaukee.

Professor Ann Dale, Canada Research Chair in Sustainable Community Development, Trudeau Fellow (2004), Royal Roads University, School of Environment and Sustainability
Published December 15, 2010

Case Summary

Sustainable community development is beyond any one sector, any one discipline and any one government to implement. Its problems and thus its solutions lie in trans-disciplinary, integrated approaches to its achievement. It demands unprecedented ways of collaborating and novel social innovation, and new models of governance. This case study examines one such model, a loose consortium model of private sector energy providers, former public policy experts, political and civil society leaders that came together in the belief that the right conversations around climate change were not happening. Given its resources, the most critical of which appears to be human capital, particularly diverse champions, QUEST has made significant progress in advancing public policy, addressing knowledge gaps, connecting decision-makers and accelerating momentum at the national and provincial levels through a variety of activities.

Sustainable Development Characteristics

Energy is the foundation of all human activity and indeed, all life. Our heavy reliance on non-renewable energy sources is now being intensely debated, with predictions about peak oil and the end of oil as we now know it. Regardless of these predictions, it is only common sense to move as quickly as possible away from non-renewable energy sources to renewables, and to develop transition strategies to accomplish this end. Sustainable energy strategies and energy security are a critical component of integrated community planning for communities everywhere in Canada.

Meeting Canada’s climate change and clean air goals will require large reductions in energy consumption in all sectors of the economy. One way to meet this imperative in the shorter term is through an integrated, community based approach, by using energy more efficiently, by matching the type of energy with its use, managing surplus heat across applications and sectors, converting waste to energy, as well as integrating on-site renewable sources of energy with existing energy grids.

Critical Success Factors

There are several critical factors that contributed to the success of QUEST; leadership, partnerships, space, timing and form. The leadership of the Canadian Gas Association (CGA) provided critical infrastructure from the beginning for the very powerful partnerships that were brought to the table. These stakeholders included diverse players and actors all germane to the issue, including former civil servants with a deep understanding and appreciation of the national picture, and private sector actors very experienced in influencing government agendas. In addition to getting the ‘right’ stakeholders together, having the ‘right big idea’ was a powerful convening factor to align government program people, with private sector interests that created the right ‘time’ to move the agenda and enhance knowledge sharing. The right idea, that is, the need for an integrated strategy for land, water, transportation and energy, created momentum and traction to continue to identify people who could bring more influence to bear on the issue at hand. The self-organizing safe space created through this unique public/private sector partnership facilitated peer-to-peer learning, trust and respect, allowed the actors to work more openly with one another and to identify ways to go around structural barriers.

Community Contact Information

Tonja Leach
Coordinator
QUEST - Quality Urban Energy Systems of Tomorrow
350 Sparks Street, Suite 809
Ottawa, Ontario
K1R 7S8
Email: tleach@questcanada.org
Tel: 613. 748-0057, x322
Website: www.questcanada.org

What Worked?

QUEST created a safe space for decision-makers, and the private and public capital sides to come together to discuss areas of mutual concern and to try to work out the tensions between energy suppliers and the lack of a ‘bigger energy picture’ in Canada and to try an develop a national conversation. Its success factors are the diversity of players that have been brought together at the table, it is definitely not your ‘usual suspects’ and keeping that character in the conversation as it moves forward. Another key factor was that the timing was right, as well as its absence of formal structure that allows it to transcend traditional solitudes, silos and stovepipes (Dale, 2001). And finally, its focus on sustainable energy provision and trying to identify and fill the gaps makes it value-added to existing institutional actors and political decision-makers, as is its continually expanding and inclusive outreach.

What Didn’t Work?

QUEST straddles an ENGO/association model, thus, there will always be gaps between the integration of its direction with current political agendas. The scale of its work across the country could be accelerated with greater funding over a longer term, for example, at least five years. Although the decentralized model appears very effective in terms of both augmenting engagement and side-stepping federal/provincial/municipal barriers, there may be a need for regional networks at some point. There is also the need to ensure that the vision continues to evolve dynamically as more and more partners join the network and provincial caucuses are built, or else, intellectual and ethical coherence may be lost.

Financial Costs and Funding Sources

In the first three years of its existence, seed money was provided by the Canadian Gas Association (CGA), the Canadian Electrical Association (CEA), the Canadian Petroleum Products Institute, Imperial Oil Foundation, the Canadian GeoExchange Coalition, the Canadian Association of Petroleum Producers (CAPP) and the Federal Government (Natural Resources Canada and Transport Canada). In addition, the Department initiated a two year secondment for one of its employees to CGA, on leave without pay¹ . Subsequent core funding was obtained from Natural Resources Canada, as well as continuing private sector funding and leadership.

The Federal Government also supported the first QUEST workshop in the amount of $10,000.00. A multi-year contribution agreement was subsequently established with the Federal Government to fund ongoing work, in addition to private sector sources.

Research Analysis

This case study was prepared using in-depth personal interviews with a majority of the members of the original planning group, the current Chair of QUEST, and two members of its regional caucuses, as well as employees from the founding organizations, the Canadian Gas and Canadian Electricity Associations, over a period of a year and a half, and federal government officials. In addition to exploring the detailed background of the organization, all interviewees were asked to comment extensively on why they think the organization has worked and what novel governance factors are emerging, especially for sustainable energy and sustainable community development. In addition, the author participated in a planning meeting prior to the third QUEST workshop held in Quebec City.

Clearly, QUEST was an idea with the right people in the place at the right time. The original diversity of initial planning group was instrumental in bringing together diverse expertise and practice that could influence the system at multiple levels, “reinforcing one another in weird and wonderful ways”. CGA had also previously been involved in the citiesplus initiative, and therefore, had experienced the power of networks to facilitate peer-to-peer learning. Such learning is considered crucial for knowledge mobilization as research shows that cities learn by copying other cities, that big cities learn from medium sized ones and they learn from smaller ones, and that when faced with a difficult dilemma, 80% of senior city officials turn first to their colleagues, not to research results (Seymoar et al., 2009).

Key features of QUEST is that it is tightly focused and principles based, while at the same time, its organization is “fluid and fuzzy”, and the QUEST process itself models integration of both product and process. This fluid structure facilitates a unique flexibility which allows for emergence and evolution of the process and adaptive learning. The alignment of private sector interests and the public sector policy agenda has increased its capacity to influence political and bureaucratic decision-making, and timing has been crucial. By deliberatively looking at the ‘blurred space’ where no-one else is talking, it created a new public policy discourse at the local level where none previously existed. QUEST has created an unusual space, with solid intellectual and technical foundations, that the private and public sectors are able to share freely, with a high degree of trust and openness, and a “whole bunch of people own it”. Diverse stakeholders are actively engaged in the process and QUEST continues to expand and diversify its networks, increasing vital connections. It is an amplifier, is very aware of the need for validating individual efforts and its unique private/public alliance. Its funding by both public and private commitments ensures a functional diversity around a common agenda, and its “inclusive text” contributes to wider and wider community engagement.

The framing of the issue, collectively deliberated by the tri-sector partnership, was critical to generating its positive momentum across the country. This framing built a ‘space’ that is positive and constructive, where common ground could be discovered, and mobility or traction is generated that leads to further conversation, rather than the more traditional polarized debate starting simply with energy supply.

QUEST has dynamically evolved, and its process of iterative learning where each workshop fed back into the design of the next has ensured increasing degrees of relevancy and value-added to local communities. Clearly, the stars were aligned, as it is essentially “a bunch of old ideas that had been around a long time” that were strategically coalesced by key leaders from all three sectors. QUEST is a novel model that also allows private sector partners to see what the future may be, and where government plays a role through a distributed network of stakeholders creating the conversation, and governments are a participant, not an owner of the process.

Detailed Case Background Description

On July 12, 2006, the Canadian Electricity Association (CEA) and the Canadian Gas Association (CGA) issued a press release confirming that reducing energy demand growth through energy efficiency and demand side management (DSM) shows considerable potential to help ensure a sustainable energy future in Canada. Its study, the first of its kind in Canada, Demand Side Management Potential in Canada: Energy Efficiency Study, confirmed “the need for greater coordination on energy efficiency policy and program development between governments, utilities, regulators and other stakeholders”, declared Mike Cleland, CGA President and Chief Executive Officer².

Prior to the announcement, in May 2006, a small planning group comprised of Shahrzad Rahbar, Senior Vice-President of the Canadian Gas Association, Ken Ogilvie, head of Pollution Probe and Mike Harcourt, former head of the Federal Government’s Task Force on Cities, came together to discuss the lack of integrated community energy planning in Canada, and the lack of a comprehensive demand side management strategy in Canada. There was general disagreement with the lack of leadership by the Federal Government and the belief that the wrong conversations were being conducted with respect to climate change. There was also an interest in stimulating non-siloed academic research that brought the right people together. The seeds for QUEST, Quality Urban Energy Systems of Tomorrow, were sown, and following a first workshop in Niagara-on-the-Lake, in 2007, QUEST was formalized at a second workshop in Victoria, in November 2008. In March, 2009, Ken Ogilvie³, prepared a policy paper on potential organizational models that included an environmental scan of the field, identified who the key stakeholders were, and what the potential involvement of the three levels of government should be, which became the basic operating document for moving forward. At this time, the core planning group agreed that CGA would continue provide core support and leadership.

Initially, QUEST existed as an idea nationally, and is now focused provincially and on the need for developing community processes in order to achieve integrated energy planning and efficiency. Over time, QUEST evolved into a collaborative of key players across Canada from industry, the environmental movement, governments, academia and the consulting community that encouraged all levels of government, industry and citizens to support an integrated approach to providing energy services in communities. Best characterized as a consortium model, it has no formal structure, although the core group (the Canadian Gas Association, the Canadian Electricity Association, the Canadian Urban Institute, and Chair, Mike Harcourt) provides some foundational direction. Its mission is to foster integrated, community-based approaches, which address energy end-use and reduce related greenhouse gas and air pollutant emissions.

QUEST's vision is that by 2050, every community in Canada will be operating as an integrated energy system, and accordingly, all community development and redevelopment incorporates an integrated energy system. This vision builds on progress that has been made on energy-efficient appliances, eco-efficient buildings, district heating systems, renewable energy technologies, waste heat utilization, waste recycling and landfill gas capture, net zero energy homes, green roofs, and other innovations that have paved the way for radical changes in the way quality energy services can be provided to Canadians. The vision calls for greater integration of these innovations in community-wide energy systems that significantly reduce overall energy consumption.

The QUEST principles flowing from this vision are to:

The Chair of QUEST is Mike Harcourt⁴, and it is currently governed by an advisory board of 12 to 14 people. Its supporters include BC Hydro, the Canadian Centre for Energy Information, CEA, CGA, Canadian GeoExchange Coalition, Canada Green Buildings Council, Canadian Petroleum Products Institute, Canadian Urban Institute, Federation of Canadian Municipalities, Government of British Columbia, Natural Resources Canada, Ontario Power Authority, Pollution Probe, and Transport Canada. To date, given its resources, the most critical of which seem to be in-kind human capital, QUEST has made significant progress in advancing public policy, addressing knowledge gaps, connecting decision-makers, and accelerating momentum at the national and provincial levels through a variety of activities.

November 14-15, 2007, in Niagara-on-the-Lake, Ontario, a workshop was convened of over 60 key players from the energy industry, the environmental movement, three levels of government, academic and the consulting community to discuss options for reducing the environmental footprint of a growing community. The conveners were the Canada Green Building Council, CGA, CEA, the Canadian Energy Efficiency Alliance, the Federation of Canadian Municipalities, Industry Canada, Natural Resources Canada, the Ontario Power Authority and Pollution Probe. This first QUEST event worked toward the development of a long-term energy plan integrating the buildings, transportation and industry sectors, and the results are published in the March 2008 whitepaper.

Subsequently, three annual QUEST workshops were held—Victoria, B.C., November 24-26, 2008; Quebec City, October 25-28, 2009, and Halifax, Nova Scotia, October 12-14, 2010. Throughout the course of the three workshops, QUEST's programming has become more targeted and directed towards community needs. For example, topics at its last (fourth) workshop included moderated discussions on accelerating ICES adoption: hard policy options; gaining public acceptance to ICES-soft policy changes; early ICES success stories; mobilizing private capital; and, understanding and addressing capacity. With each workshop, knowledge among the core group has advanced, and learning from each workshop has provided a critical feedback loop for the planning and organization of the next year’s event. From the first two workshops, the conclusion was that if the agenda is left too open, the discussion centres too much around the options, rather than concentrating on the shared learning on how to implement an integrated energy system at the community level. Consequently, with respect to the third workshop, it was more targeted and focused towards the nuts and bolts of energy planning and efficiency, and two academics were brought in to help design the workshop to restructure the issues, focusing specifically, on what are the critical pieces for integration?

Critical mass has been building from one workshop to another, and often participants are the catalyst for forming the provincial caucuses. All events are by invitation only under the guidance of the core advisory group of QUEST. There is a limit of 80 people for each workshop in order to enhance discussion. Travel is reimbursed for non-government and academic participants, and industry and government participants pay their own way.

As part of its publications strategy, QUEST publishes white papers, discussion papers, presentations and reports, in addition to quarterly newsletters. Recently, its first major report was published entitled, The capacity for integrated urban energy solutions (ICES) policies to reduce urban greenhouse gas emissions. This report, prepared by one of the country’s leading energy experts, Mark Jaccard, along with input from some of the leading Canadian energy, land use and transportation experts, looked at what would happen by integrating these solutions using data from four communities—the Greater Toronto Area, Ontario; Winnipeg, Manitoba; Dawson Creek, British Columbia and Fort McMurray, Alberta, and scaled up its findings to the national level. Two QUEST white papers have also been released, March 2009 and March 2008, and one discussion paper, November, 2008.

Key presentations by QUEST members have been made to the House of Commons Standing Committee on Natural Resources for its study on the contribution of integrated approaches for providing energy services in Canadian communities; Harcourt to the Calgary Chamber of Commerce; Harcourt to Premier Selinger; Environmental Commissioner of Ontario; Alberta Utilities Commission; National Energy Board Energy Futures 2010 Conference; Federation of Canadian Municipalities Provincial Committee; Harcourt to the Canadian Energy Research Institute and the Community Energy Association; Ogilvie and Rahbar to the Finance Committee of the House of Commons; Cleland and Ogilvie to the Council of Energy Ministers, to name a few. Additional QUEST presentations have also been made at the Union of British Columbia Municipalities Annual Conference and at the Association of Municipalities of Ontario Connections Conference.

There are now regional caucuses in place across the country. Caucuses are active in British Columbia, Ontario, Nova Scotia, are emerging in Quebec, and New Brunswick has expressed interest. Each caucus has defined their own priorities. For further information, please refer to the QUEST website. QUEST is hoping to facilitate caucuses in all provinces and territories in the future.

QUEST has sharpened its focus to encompass informing policy development; building knowledge to address ‘silos’ and connect the dots between the players; operationalization in all provinces, that is bringing the key players together; “micro-matchmaking” that is project related (technology, financing options, management skills), providing access to resources and ideas normally outside of any one community’s resources; and, finally networking. One of its strategies for organization has been to identify and to address gaps, to create a synergy between events, and continue momentum for change. Essentially, QUEST is leading a social learning process coupled with increasing community engagement around social innovation concerning energy planning and energy efficiency.

Strategic Questions

1. In what ways do you think the right people coming together at the same time in the right place was critical to the success of QUEST?
2. How important was individual leadership to its success and in what ways?
3. What critical skills did key individuals bring to the organization?
4. Would QUEST benefit if it was institutionalized, and what institutional form should it take?
5. What benefits do former civil servants and ‘recovering politicians’ bring to the table, if any?
6. Are there key precursors to the success of QUEST?
7. Are there emerging elements of a new governance model here?

Resources and References

Dale, A. (2001). At the edge: sustainable development in the 21st century. Vancouver: UBC Press

Seymoar, N-K., Mullard, Z., and Winstanley, M. (2009). City to city learning. Vancouver: International Centre for Sustainable Communities

1 Previously, Natural Resources Canada had established MOUs with CGA and CEA to formalize collaboration on DSM and energy efficiency. This led to the establishment of a federal/provincial/utilities DSM working group, under the Council of Energy Ministers. This set the stage for the emergence of QUEST.

2 Former Assistant Deputy Minister, Energy Policy, Natural Resources Canada

3 Ken Ogilvie, then head of Pollution Probe, had previously been the Executive Director of the Canadian Environmental Advisory Agency, involved in the formation of the New Directions Group, and a member of the National Round Table on the Environment and the Economy.

4 Mike Harcourt who refers to himself as a recovering politician, has variously been a street front lawyer in the Downtown Eastside, Mayor of the City of Vancouver, and then Premier of British Columbia, to name only a few of his many accomplishments.

Nathalie Dechaine and Chris Strashok
Published February 1, 2010

Case Summary

The Capital Regional District (CRD) of Victoria, British Columbia, Canada is characterized by a mild climate, rich in diverse biotas that are in some cases, endemic solely to the region. Its temperate climate makes the region a desirable place in which to live, but also open to the introduction of alien invasive species that threaten its indigenous biological diversity.

While local governments recognize the associated costs and risks of doing nothing, they do not have the capacity, knowledge or political will to act on this problem of isolation from community resources, not the least of which is human capital. The extent of the problems of alien invasive plant species cannot be addressed by the few formal small ecological restoration projects currently being conducted within the CRD. In response, volunteer groups have approached local governments or have initiated invasive species removal from public lands independently.

Two case study restoration projects were examined: Mount Douglas Park and Mill Hill Regional Park. This study explores several tools and processes that mobilize social capital to engage in ecological restoration to sustain local indigenous biological diversity. In particular, the role of bridging social capital to increase access by volunteer groups to augment access to resources by local government is examined, on the assumption that the creation of novel collaborative partnerships is a critical way to sustain native plant diversity in the region, and elsewhere in Canadian communities.

Sustainable Development Characteristics

Natural areas in the urban environment are important for several reasons. Ecologically, they sustain all living beings, as well as human social and economic systems. Natural areas contribute to conserving vital ecosystem services on which we all rely. For example, they provide services such as food, water, timber and fibre; the regulation of climate, floods, disease, wastes, and water quality; cultural services such as recreation, aesthetic enjoyment, and spiritual fulfillment, and; supporting services such as soil formation, primary production, photosynthesis, and nutrient cycling (Millennium Ecosystem Assessment 2005; Daily, 2000). Natural areas also provide close neighbourhood access to nature for people living in the city while increasing social integration and interaction among neighbours through restoration projects (Chiesura, 2004).

Critical Success Factors

The continued success of ecological restoration projects in the CRD of Victoria and application to other natural areas is dependent upon several key steps being in place—enhanced collaborative approaches, education, increased access to resources (including indigenous plants), maximizing volunteer capital, and changing policy and legislation.

Community Contact Information

Nathalie Dechaine, M.A., B.A.
Victoria, British Columbia, Canada
Email: nathaliedechaine@hotmail.com

What Worked?

The Mount Douglas Park and Mill Hill Regional Park restoration projects had varying levels of formal government involvement, financial and volunteer support, therefore, what worked for each case study was very different.

When a governmental agency leads a project such as the Mill Hill Regional Park restoration, it stands a much greater chance of continuing over time given government stability. In government-run projects, core funding is provided to pay for deliberate planning and coordination for the project such as expertise and volunteer recruitment and training support. Government-run projects are more traditionally scientific and deliberate in their approaches. The coordinator of the Mill Hill Regional Park project recognized that ecological restoration in and of itself impacts the ecosystem and that some risk to the surrounding environment must be managed to facilitate the project’s outcomes. Because of this, the Mill Hill Regional Park restoration project reserved certain tasks in sensitive environments for paid staff, but the possibility still existed that paid workers trampled nearby native vegetation, causing collateral damage and soil disturbance, as much as a well-trained volunteer might.

In the community-based projects, like Mount Douglas Park, community involvement is the driver for these projects and, therefore, volunteers work more independently. With direction from the District of Saanich staff, guidance and access to resources, the community was resourceful and effective at engaging social capital to conserve urban biological diversity. This flexibility and mobilization of community social capital allowed this group to work on multiple projects at one time while reaching out to schools, members of the public and university programs designed to educate local residents about ecosystems, their value and their vulnerability.

What Didn’t Work?

The unofficial work by caring community members poses challenges for restoratoin projects in terms of both public safety and environmental concerns. When citizens lack the requisite knowledge necessary to be effective and safe in their efforts, and take matters into their own hands, negative public perception of ecological restoration can be potentially fostered as plant debris is left on-site, looking unsightly and invasive species can be spread further when not disposed of properly.

Financial Costs and Funding Sources

The funding for these two restoration cases are different. Mill Hill Regional Park receives substantially more funding and focuses on only one project, while Mount Douglas Park has several different projects, one of which is overseen by District of Saanich staff, but most are overseen by volunteer coordinators.

Since the restoration project in Mill Hill Regional Park is funded by the federal government through the Government of Canada’s Habitat Stewardship Program, reporting requirements are such that CRD Parks formally records and documents aspects of the project to meet the federal funding requirements. This is an effective incentive to keeping the information well-organized and conducting monitoring.

In Mount Douglas Park, while the Garry Oak Restoration Project (GORP) has formal administratrive oversite of the project by District of Saanich staff, and includes a restoration plan, site inventories and monitoring, very little information is formally documented, however, in the volunteer-led restoration projects either by the community groups or by the District of Saanich. Consequently, it was difficult to directly compare costs with those associated with the Mill Hill Restoration Project.

Research Analysis

Two case studies involving ecological restoration projects in the CRD of Victoria were selected--the Mount Douglas Park restoration explores projects initiated by a government agency, while the Mill Hill Regional Park restoration explores a community-based approach. There are several restoration projects underway in the former including riparian, Douglas-fir forest and Garry oak ecosystems. The latter has only one project that is focused on the Garry oak ecosystem. Both case studies differ in their access to resources, and are compared and contrasted for similarities and differences. By comparing and contrasting these case studies, the intent was to assess under what conditions community volunteers can assist in restoring native ecosystems by removing introduced invasive plant species, and how government agencies can work with this potential to realize their own goals and objectives. Thirteen people were interviewed and data was analyzed for opportunities and barriers to bridging community social capital and governmental agencies.

Detailed Background Case Description

The CRD of Victoria, British Columbia is characterized by a mild climate, and rich in diverse biotas that are in some cases, endemic solely to the region. The region's temperate climate also makes it a desirable place in which to live, but also a climate in which alien invasive species can prosper. Invasive plants are considerred one of the major threats to the biological diversity in this area.

The CRD is located in both Coastal Western Hemlock (CWH) and Coastal Douglas-fir (CDF) biogeoclimatic zones. This case study focuses on the portion of the CRD that falls within the CDF zone which consists of a small strip along south-eastern Vancouver Island, extending to the Gulf Islands. Although it is one of the smallest biogeoclimatic zones, it has the highest number of species at risk per unit area of any zone in B.C. (Holt 2001 as quoted in British Columbia Ministry of Environment, 2006).


(Source: Data Warehouse, Province of British Columbia 2009)

As its name implies, the predominant forest type in the CDF zone is Coastal Douglas-fir. Garry oak ecosystems, however, which are endemic to Canada and one of the country’s most endangered ecosystems, are also found here. This zone is best typified by its Mediterranean climate, which is caused by the rain-shadow effect of the Olympic and Vancouver Island Mountains. This climate is unique to only 1% of Canada (Schaefer, 1994). Mild, wet winters and dry summers, with a mean annual temperature that ranges from 9.2 to 10.5 degrees Celsius allow unique plant assemblages to grow in this part of Canada. The Coastal Douglas-fir biogeoclimatic zone currently contains 261 plant and animal species and 36 ecosystems that are provincially listed as at-risk (British Columbia Ministry of Environment, 2009).

Within this zone, the CRD is largely developed and makes up 13 incorporated Municipalities and three large unincorporated electoral areas: Saltspring Island, Southern Gulf Islands and Juan de Fuca, and extends from the Gulf Islands to Port Renfrew. The CRD also has a relatively large parks system set aside to protect natural values including biodiversity. The total amount of natural areas in protected area status in the CRD now approximates 24,000 ha or over 10% of the land base (Capital Regional District, 2009). These parks and other protected areas vary considerably in their roles and capacities to protect natural area values. Some parks provide intensive recreational opportunities that keep people and their community healthy and active. While others are larger, less developed and protected areas that have a greater role in conserving the biological diversity represented in this region.

The two restoration projects studied are in Mount Douglas Park and Mill Hill Regional Park, two ecologically similar parks. Mount Douglas Park is located in and managed by the District of Saanich. There are several restoration projects underway in Mount Douglas Park in various habitats; riparian, Douglas-fir forest and Garry oak ecosystems. The Garry Oak Restoration (GORP) in Mount Douglas Park is the one project overseen by the District of Saanich staff while the remaining projects in the park are coordinated by volunteers associated with the Friends of Mount Douglas Park Society and varying restoration objectives.

CRD Parks manages Mill Hill Regional Park. It is located mostly in Langford with a small section occurring in View Royal. There is only one restoration project in Mill Hill Regional Park that is focused on the Garry oak ecosystem and only on relatively few invasive species such as Scotch broom and Daphne laureola. This project is overseen by CRD Parks’ Environmental Conservation Specialist. The Mill Hill Regional Park project is funded in partnership with CRD Parks and the federal government through the Government of Canada’s Habitat Stewardship Program.

Invasive species are second only to land alienation in the threats they pose to natural ecosystems and biodiversity (Land Trust Alliance of B.C., 2009; Murray and Pinkham as quoted in Polster 2004). The impacts of invasive plants on ecosystems are complex. Invasive plant species compete with native plants for resources and become dominant over other native species (Coastal Invasive Plant Committee, n.d.), change soil nutrient regimes, and can modify the successional trajectory of ecosystems (Polster, 2004). Since plants exist near the bottom of the food web, changes to their composition structure and function can affect subsequent levels in the food web. While the physical competition of invasive plants with native plants may be obvious, the full extent of indirect impacts may be yet unrealized (British Columbia Ministry of Forests and Range, n.d.).

Human activities within the portion of the CRD of Victoria located in the Coastal Douglas-fir (CDF) biogeoclimatic zone have modified 80% of this area to such an extent that the natural ecosystems are no longer present (British Columbia Ministry of Environment, 2006). Further to this, Austin et al. (2008) identifies six major stresses that continue to threaten the species and ecosystems in the region:

1. species disturbance ( ecosystem conversion, human-caused disturbance of natural ecosystems for human use);
2. ecosystem degradation (structural changes to natural systems from activities such as forest harvesting or water diversion);
3. alien species (human dispersal of species outside of their native range);
4. environmental contamination (toxins released into natural systems);
5. species changing their behaviour due to human activities; and,
6. species mortality (directly killing individual organisms).

In the United States, the assessed annual damage costs from introduced plants and animals for the year 2000 was set at $137 billion, and is considered an underestimate (Perrings et al., 2002). In the CRD of Victoria, private and public land managers currently incur the costs of dealing with these introduced plants without a central reporting agency so the economic impact of invasive plants are largely unknown for this region. The economic costs of introduced species are largely externalized to the environment, public agencies as well as private citizens and businesses.

Economically, natural areas add value to a locale through increased aesthetic and property values. A study of properties in the Lower Mainland and south Vancouver Island found that residential property values increase by 15-20% when adjacent to green areas and that people who live near greenways tend to live in their houses longer than those who do not (Quayle and Hamilton 1999, as quoted in Habitat Acquisition Trust, 2004). Thus, natural areas increase the economic and the social wealth of communities because less homeowner turnover rates results in more stable neighbourhoods.

Socially, ecological restoration provides a positive opportunity to engage the public in experiential knowledge about native ecosystems and biodiversity at the landscape level, as well as providing a sense of hope to counter some of the negative impacts humans have on the natural environment. This coming together over a specific cause helps to build further social capital. While the ultimate goal of rehabilitating natural areas is indeed ecological, the social benefits and motivations of people living in the area will ultimately enhance the success of environmental restoration initiatives. If environmental goals are considered without managing the social framework in which the issues arise, it is unlikely these objectives will be sustainable in the long term. By understanding and connecting to the ecology and by directly participating in these efforts, these connections extend to individual private properties and with one another, fostering greater respect and cooperation in both the ecological and social contexts.

Conclusions

Participants in the study recognized that it was not just the invasive species growing in protected areas that posed a problem, but also poorly regulated importation and cultivation of invasive species as horticultural plants, and a lack of public awareness and/or due care with regard to the impact of invasive species growing on public lands, and especially private lands. They also reported that the spread of invasive species is exacerbated by development for two main reasons: as more people move into an area they plant, transport and dispose of garden ornamentals close to natural areas; and, as more people recreate in natural areas, they or their animals serve as vectors to accidentally spread alien invasive plants within and between natural areas.

All of the participants recognized the ecological values of restoration with the main goal of increased biodiversity, restored ecological capital and its link to enhanced community resilience (Dale, submitted). Some interviewees believed that ecological restoration was an inherently value-based activity that held an ethical responsibility for nurturing the ecosystems in which they lived. More than half of the participants also extended the goals and values of ecological restoration to include restoring the human connection with each other and with the natural environment. These participants noted that by working together on a shared goal you build connections with each other, bringing community together, and reintegrating community with an awareness of the impacts on their place and actions. By building these community networks, many interviewees observed that this also helped to gain the support of the surrounding community. By increasing awareness and education in the community around the importance of urban biodiversity, greater local agency (Newman and Dale, 2005) is engendered, changing the current trend of ambivalence and apathy. In turn, this further empowers the volunteers and gives meaning to the idiom ‘think globally, act locally’.

There are risks, however, associated with performing ecological restoration activities that need to be considered and accounted for, such as collateral damage, public misperception, uncoordinated priorities and scale of restoration, as well as lack of knowledge and changing human attitudes. For example, some challenges that arose for the District of Saanich during their project were the following.

Small, medium and large English holly (Ilex aquifolium) trees are being cut down in Mount Douglas Park. This practice does not, however, produce the desired results as the holly re-sprouts from the base and some of the debris left behind contains many ripe berries which the birds eat and disperse around the Park and other surrounding areas. Also, as the cut portions of the holly trees dry out, in some cases the trees are left upright or leaning and they potentially serve as ladder fuel. Ladder fuel is forest litter that can serve to elevate ground fire to the upper canopy in the event of a fire.

In another case, a concerned citizen cut and piled large amounts of Scotch broom adjacent to the Little Mount Douglas GORP site. The manner in which the broom was cut left large sharp stems on which park visitors could easily be injured. The broom pile smothered the plants, mosses and lichens under it while there is evidence that chemicals that leach out from dead broom can alter the soil in the immediate area, exacerbating erosion and stifling natural recovery.

Also, in certain situations invasive plants may be the only thing preventing erosion, and in some cases, animals have adapted to using the invasive species as habitat. By removing invasive species there may be unintended harm to the ecology in the existing area. Interventions in dynamic and complex systems that we do not fully understand (Weddell, 2002, Dale, 2001) often have unintended consequences, even ones designed for restoration. Even though the efforts of the individuals may be well intentioned, the approaches tend to favour one species or one ecosystem over another without consideration of the overall system dynamics. These ecosystems also operate on time scales that are hundreds and thousands of years old. How can you judge if what has been done is of help or destructive? There needs to be a long-term vision and plan when conducting ecological restoration.

In order to sustain biodiversity in the urban environment, engaged citizens and the private sector need to work collaboratively together in novel partnership arrangements, formal and informal, with all levels of government and public institutions. There are several tools that are available to build the capacity needed to conserve biodiversity in the CRD: collaboration, education, increased access to resources, and changes to policy and legislation.

Integrated and collaborative approaches are a means to increase capacity, leverage existing resources, share information and increase bridging social capital. It also helps to address the issues associated when small groups are working in isolation. Local governments could actively stimulate research partnerships by engaging the research community and graduate students to examine and compile best management practices bridging knowledge gaps and increase access to intellectual wealth by disseminating this information through a central repository that can be accessed by communities.

Education and awareness campaigns help to highlight the need for all of society to participate in reducing the financial, ecological and social costs of invasive species. Education campaigns were key components to the success of both the Mount Douglas Park and Mill Hill Regional Park restoration projects helping to change public attitudes to participating in ecological restoration. Participation increased awareness about local ecology, invasive species and reinforced the roles that each approach contributes to building knowledge and ameliorating biodiversity.

Increased access to resources—financial, ecological and human capital is a critical success factor. Lack of money was seen to be one of the largest obstacles for conducting and sustaining ecological restoration projects. Both case study restoration projects had support from various levels of government in the form of funding and access to physical resources, which helped to make these projects successful. Other forms of funding also need to be examined such as: tax levies on development, establishing not-for-profit organizations for ecological restoration, working in partnership with businesses and the emerging carbon market. Diversifying the sources of funding for restoration projects will help make them more successful and sustainable.

Making use of volunteers was a strategy employed by the projects to overcome the lack of funding for paid staff. Volunteers still require, however, investment in training, coordination and support, so there must be at least one designated position to manage the volunteers in a way that is consistent with the ecological restoration goals of the management agencies, if mutually beneficial goals are to be achieved.

Access to native plants was also cited as a major barrier. Access to indigenous plants propagated with local genetics can be facilitated by greater collaboration between the community groups, academia, non-profit societies and governmental agencies. For example, native plants could be propagated through existing programs such as the Restoration of Natural Systems at the University of Victoria or in the educational horticultural programs at Glendale Gardens, clear examples of research-community partnerships.

With respect to policy and legislation, there are very few legal tools that exist to specifically address invasive species that are not associated with preventing agricultural harm. This means that if a species is not listed under that legislation, there is very little legal authority for invasive species removal, which makes it difficult to garner support for performing ecological restoration projects, impeding efforts before they even begin.

Even when legal tools exist, changes need to be made to reflect a more dynamic framework that is responsive to addressing new alien invasive species, particularly if they are dangerous or pose serious economic and or ecological risks.

These tools, the knowledge gained from each project, and the mobilization of local social capital have the potential to help directly in ameliorating the threats posed by invasive species. The challenge will be for governments to manage community-driven demand into effective opportunities for action and integrated decision-making framework optimizing volunteer capital.

Strategic Questions

1. What are the legal provisions for invasive species in other municipalities and provinces?
2. Emerging carbon markets is mentioned as a possible funding source. What are some other unique funding sources that could be used to finance ecological restoration projects?
3. What are some of the challenges of trying to apply a conservation paradigm to dynamic ecosystems? Is this the right thing to do?
4. What role can governments and their policies play in supporting urban biodiversity in this community and other communities?
5. Is social capital really necessary for dealing with urban biodiversity?
6. How can communities deal with invasive species on private lands?
7. What are some of the other threats to urban biodiversity and how can they be addressed?
8. How can governments honour volunteer capital and ideally, contribute to enhanced local social capital?

Resources and References

Austin, M.A., Buffet, D. A., Nicolson, D.J., Scudder, G.E., & Stevens, V. (Eds.). (2008). Taking nature’s pulse: The status of biodiversity in British Columbia. Victoria: Biodiversity BC.

British Columbia Ministry of Environment. (2006). Develop with Care: Environmental guidelines for urban and rural land development in British Columbia. Section Five-Regional Information Packages, Vancouver Island Region. Retrieved June 9, 2009 from: http://www.env.gov.bc.ca/wld/documents/bmp/devwithcare2006/develop_with_care_intro.html.

British Columbia Ministry of Environment, (2009). Conservation Data Centre. BC Species and Ecosystems Explorer. Retrieved July 27, 2009, from http://a100.gov.bc.ca/pub/eswp/.

British Columbia Ministry of Forests and Range (n.d.). Retrieved June 9, 2009 from: http://www.for.gov.bc.ca/hfp/biocontrol/index.htm.

Capital Regional District, (2009). State of Environmental Indicators Report Update. Retrieved June 14, 2009 from: http://www.crd.bc.ca/rte/statereports/2006/documents/RTESOEIUpdatefinaltext.pdf.

Chiesura, A. (2004) The role of urban parks for the sustainable city. Landscape and Urban Planning. 68, 129–138.

Coastal Invasive Plant Committee, (n.d.). Retrieved June 06, 2009 from http://www.coastalisc.com.

Daily, G.C. (2000). Management objectives for the protection of ecosystem services. Environmental Science and Policy 3(6), 333-339.

Dale, A. (2001). At the edge: sustainable development in the 21 century. Vancouver: UBC Press.

Dale, A. (submitted). Diversity: Why is the human species so bad at difference? Journal of Urban Studies.

Habitat Acquisition Trust Manual. (2004). Protecting Natural Areas in the Capital Region. Retrieved February, 13, 2009 from: http://www.hat.bc.ca/attachments/016_HATManual.pdf.

Land Trust Alliance of British Columbia (2009). Credible conservation offsets for natural areas in British Columbia. Summary Report by Brinkman, D., & Hebda, R.J., Edited by Penn, B. Retrieved June 21, 2009 from: http://www.landtrustalliance.bc.ca/docs/LTABC-report09-web2.pdf.

Millennium Ecosystem Assessment. (2005). Ecosystems and Human Well-being: Biodiversity Synthesis. Retrieved June 13, 2009 from: http://www.millenniumassessment.org/documents/document.354.aspx.pdf.

Newman, L. and A. Dale. 2005. The role of agency in sustainable local community development. Local Environment, 10(5): 477-486.

Perrings, C., M. Williamson, E. B. Barbier, D. Delfino, S. Dalmazzone, J. Shogren, P. Simmons, P. and Watkinson, A. 2002. Biological invasion risks and the public good: an economic perspective. Conservation Ecology. 6(1): Retrieved January 20, 2009 form: http://www.consecol.org/vol6/iss1/art1.

Schaefer, V. (1994). Urban Biodiversity. In L.E Harding & E. McCullum (Eds.). Biodiversity in British Columbia: Our changing environment. (pp. 307-318). Vancouver: UBC Press.

Weddell, B.J. (2002). Introduction: Balance and flux. In Conserving living natural resources in the context of a changing world. (pp.1-8). Cambridge: Cambridge University Press.

Lee-Anne Walker and Chris Strashok
Published January 27, 2010

Case Summary

Water quality and quantity is critical to every aspect of life. Monitoring our water supply and its health is of concern to many Canadian communities. Citizen groups in the Columbia Basin, in southeast British Columbia, Canada, are actively gathering water data and monitoring the health of local rivers and streams. These watershed groups are forging a new governance model for citizens to better understand their watersheds and use this knowledge to take a more active role in the decision-making process to ensure water sustainability in their communities. Community-based water monitoring (CBWM) is one activity that can be used to bridge citizens’ involvement with decision-makers in a partnership of shared responsibility for planning and managing a sustainable water system.

What is unclear is how do decision-makers perceive the efforts of these community-based water groups; are they valued, appreciated or respected?  Is there interest in sharing information between communities and decision-makers and a willingness to collaborate on decision-making? If so, where are the entry points in the water governance process for citizens to participate effectively?

Sustainable Development Characteristics

For the purpose of this research, it is assumed that water sustainability is achieved when there is a renewable and economical water supply, and human activities are environmentally benign to the water resource. To accomplish this, a series of value-based choices about water happens. Historically, all three levels of government, federal, provincial and municipal, are involved; hence, water governance is as complex and diverse as the geopolitical boundaries and governmental jurisdictions it crosses. With this government structure, fragmentation of water legislation, policies and practices occurs, creating challenges to meeting water sustainability goals. If goals are not met, the results can range from degraded water quality, exposure to waterborne diseases, as well as inadequate financial resources to resolve issues, and weak standards.

It is clear that water governance in the Columbia Basin, and elsewhere in Canada, can not be shaped by government agencies alone, but needs to include the cultural norms and values of the people who live and work in the region. Governments and community members are increasingly recognizing that non-government actors like citizens, non-government organizations, and business are essential to effective water management. Thus, the need for connection and collaboration between community-based organizations, like the ones found in the Columbia Basin, which are monitoring water quality, involved with water education and outreach, and restoration efforts, along with the decision-makers making and enforcing policy around water, is fundamental to sustainable community development.

Critical Success Factors

For a system to make the kind of transformation required to implement sustainable development, power and authority must be linked and distributed among the various stakeholders. By bridging the existing bonding social capital, a community can facilitate effective information generation-sharing, decision-making and accountability, and the distribution of resources and wealth (Doppelt, 2003). In the Columbia Basin, there is some evidence that this is being achieved and that effective bridging social capital between community water monitoring groups and decision-makers is being generated. Both the Lake Windermere Project and the Christina Lake Stewardship Society initiatives are examples of when groups are connected and the inclusion of multiple values, knowledge and interests of different stakeholders come together to create a co-management framework. With this framework, there is a space created that allows for sharing of knowledge, agreement on parameters for monitoring, and the publication and dissemination of knowledge to the wider community.

Community Contact Information

Lee-Anne Walker, M.A., B.A.
Fernie, British Columbia, Canada
Email: fernienature@shaw.ca

What Worked?

The Lake Windermere Project (LWP) emulated a positive working relationship with the District of Invermere. Working together, LWP data was incorporated into the Lake Windermere Official Community Plan and guidance document for shoreline development. This group was also able to update the BC Ministry of Environment (MoE) water quality objectives with the district's support in the form of a boat, fuel, delivery and pick up service, access to water intakes, and in-kind office space.

Similarly, the Christina Lake Stewardship Society was able to build relationships and networks by coordinating an annual tour of the lake on a barge called the “Tintanic”. These tours brought together regional district directors, planning committee members, MoE representatives, and Selkirk College staff to discuss lake ecology, issues and joint concerns. These meetings enabled all of the individuals involved in water stewardship to understand that they all share the common goal of protecting water resources while building a foundation of trust and respect for each other.

What Didn’t Work?

This case study revealed four key areas where community-based action groups need to be more strategic. Managing and analysing the collected water data is difficult for both community groups and decision-makers. With each group working independently to collect their own data sets, there are few resources available to compile and analyse the data, keep the data current and disseminate the information to other decision-makers and communities. This reinforces the argument that community groups and decision-makers need to work in a partnership with shared responsibility for planning and managing a sustainable water system.

Local water management knowledge is also in jeopardy since few of the groups have viable succession plans to replace the current leadership. They are challenged to find volunteers, especially since the population is seasonal, and in some cases, many of the full-time residents have had to relocate due to increasing property values and taxation rates. Decision-makers have similar problems due to the nature of government, with a subsequent loss of continuity between citizen-based groups and the decision-makers.  With some rapid changes in civil servants, citizen-based groups have had to continuously re-establish their credibility and legitimacy to new staff.

There are various levels of trust and respect between community-based water groups and decision-makers. A lack of trust in the region can be traced back to past perceptions of one another, poor communication, and weak networks between the two groups. By allowing these perceptions to persist, relationships between these two working groups will languish limiting the available social capital needed to protect the region’s water systems. There are also various monitoring and reporting protocols used by both community groups and decisionmakers involved. This complicates the communication issues and networking capabilities between the different water monitoring groups, further eroding the much needed social capital to facilitate a new governance model.

Financial Costs and Funding Sources

From 2005 to 2009, the Columbia Basin Trust (CBT) provided $36,594.66 in funds to support the Columbia Basin Watershed Network and the water-monitoring pilot carried out by some of the community-based water groups. These funds were used to facilitate various symposiums that helped to connect organizations and build strong networks between citizen groups involved in water stewardship, restoration and planning activities (CBT website, 2009).

Government agencies have also provided year-end funding contributions, grants and assistance for accessing outside funding sources. They have also loaned equipment, provided less expensive access to lab services, printed brochures, provided office space, paid facilitators for joint meetings, provided in-kind expertise, as well as agency staff support. In-kind support, particularly expertise, including scientific, is often as valuable to community-based groups as financial support.

Research Analysis

This case study was drawn from interviews with eight community-based water groups and sixteen decision-makers to examine how citizen-generated data might be integrated into planning and decision-making for water sustainability in the Columbia Basin. Two distinct interview sets were conducted. They were structured by a set of predetermined open-ended conversations regarding water management, social capital and governance models. The key difference between the two groups is that one has legitimate power and authority directly over water, while the other has the capacity to make personal decisions, but also wishes to influence long-term, community-based water planning and management leading toward sustainability. The intent was to learn about how community-based water monitoring can be used to bridge citizens’ involvement with decision-makers in a partnership of shared responsibility for planning and managing a sustainable water system.

Detailed Background Case Description

Water is intrinsic to sustainable community development, the human imperative of the 21st century (Dale, 2001). Sustainable development involves choices by people of what to sustain (nature, resources, cultures) and what is to be developed (people, economy, society) (Kates et al, 2001). It is a series of value-based choices, in this case placed on water.  Community-based water groups are investing countless hours and personal resources to make the following activities happen in this region through the following activities that include:

·        bringing in grant dollars into the community to do restoration activities that employ local individuals and students;

·        catalysts for community involvement and engagement which have changed community behaviour e.g. through Stewardship Centres;

·        participating in fish surveys;

·        offering living laboratories outside for water education/community awareness and conservation programs;

·        participating in processes resulting in improved industrial models and standards;

·        sponsoring community stream and lake clean ups and celebrating water stewardship events;

·        members of local Advisory Planning Council for Official Community Plans and affect operations e.g. cosmetic bylaws, setbacks for snow removal, divert compostable waste from landfill;

·        participating in watershed planning and implementation strategy;

·        acting as watchdogs advocating for compliance of legislation, socially unacceptable harm to water, receive anonymous tips from residents, advocate for government to clean up abandoned mine sites and monitor mine decommissioning;

·        managing long term water monitoring projects that produce enough data to show trends to base decision making judgements;

·        riparian restoration and tree planting;

·        producing annual reports on water results;

·        reviewing permit applications for development, variance applications, foreshore alterations and monitor tenures e.g. marina, forest practices;

·        producing community brochures and signs; and,

·        operating a Stewardship Centre providing a central location for dissemination of information and a staffed phone.

This monitoring also increases citizen appreciation, understanding of the issues and value for the resource, and community literacy around a critical resource. Understanding of water science, governance frameworks, and the required sustainability solutions has resulted in a community of people formulating a vision for the future and a desire to take action towards more proactive planning and managing for a sustainable water future. In addition, decision-makers in the ColumbiaBasin see value in getting citizens involved, creating a virtuous feedback cycle.

Governance

Good water governance in the Columbia Basin will be shaped by the cultural norms and values of the people who live and work there. The United Nations Development Program (UNDP, 1997) lists five characteristics of good governance that can be applied to water governance:

 UNDP Five Good Governance Principles

 These five principles recognize that instead of the old-style patriarchal, hierarchical approaches, sustainable governance sees all members, both internal to the organization and external stakeholders, as important parts of an interdependent, interactive system. To bridge the gap between interested citizens who want to be stewards of water with decision-makers challenged to manage the resource in a fragmented, cumbersome system, good governance will require active public involvement and transparency (Brandes and Nowlan, 2008). Water sustainability requires a completely new perspective inspired by the hydrological cycle itself.  We need to change our current straight-line ‘take-make-waste’ production to a circular ‘borrow-use-return’ system (Doppelt, 2003). 

Where Community-based Science fits in Sustainable Water Governance

Water governance is as complex and diverse as the geopolitical boundaries and governmental jurisdictions it crosses. Decision-making about water happens on many levels, from the terms and conditions of international water treaties to daily personal use, some being wasteful, others more sustainable. One of the greatest challenges in water governance is that the governments making decisions about the use and management of water simply cannot do everything, especially in times of shrinking financial resources. At best, citizen groups have the capacity to deal with their specific watersheds breaking off manageable pieces of work for themselves. In contrast, decision-makers have dozens of sub-watersheds under their area of responsibility. Presently, there is no definition or defining boundary about the scope of the watershed for the optimal scale in which water planning and management should occur.

Consequently, governments are increasingly recognizing that non-government actors like citizens, non-government organizations, and business are essential to effective water management, and value their services. Government, however, needs to go beyond the obvious tools of regulation, land purchase into protected areas and command and control strategies, to develop effective ways of listening, understanding, and interacting with interested communities of stakeholders leading to an integrated decision-making framework for sustainable water management.  New frameworks will need to work across spatial and social scales, link broad global concerns with local needs and development priorities, evolve and adapt based on social learning in order to cope with ecological and social complexities, be flexible and facilitating, and demonstrate concern for both social and environmental justice (Brown, 2003). Ultimately success in the human dimensions of watershed management relies on the dynamic interface between substantive water information, a clear, open, transparent and inclusive decision-making process, and strong networked relationships between formal and informal organizations founded on trust and credibility.

The relationship between decision-makers and community groups needs to be enhanced to formulate an effective water management plan in this area and elsewhere in Canada. Both community groups and decision-makers in the Columbia Basin observed conditions, which enabled this network of social capital to grow, and obstacles to strengthening relationships and integrating the work of community-based monitoring groups and decisions on the management of the resource.

Enabling conditions consisted of:

·     working together to share information/resources, training and other collaborative efforts;

·     actively inviting community groups to provide input into the planning process;

·     referring other agencies to community-generated data;

·     integrated approach to watershed monitoring and data management;

·     community understanding of the problem and targeted efforts in the right location; and,

·     channelling and acknowledging the dedication of citizen volunteers.

Some of the obstacles were: 

·      citizen access to government data denied;

·      lack of openness and willingness to deal with the citizen group;

·      identifying the ‘right’ people at the table for dialogue to be productive;

·      historical pattern of not involving community in the decision making process;

·      community groups are seen as partisan and obstruct development and are reactive; and,

·      conflicting or hidden agendas between the decision-makers and citizen-based groups.

The data revealed that there are often conflicting priorities between citizen-based monitoring groups and traditional decision-makers. Citizens are concerned with water quality, quantity and the relationship between healthy water and healthy communities. Decision-makers are concerned with the lack of integrated management, lack of historical data to guide future decisions and the decline in available government human and financial resources. These differing priorities have ultimately led to differing visions and indicators. Community groups want to use a holistic approach to protect water quality and quantity since healthy aquatic ecosystems are a large of part of water sustainability. Decision-makers, on the other hand, are mandated to see water users comply with laws, regulations, permits and licenses, and balance competing interests with societal objectives while making sure drinking water is safe, clean and reliable. Clearly, integration of these perspectives would lead to a more sustainable water management system in the long-term.

In spite of these differences, both groups see the current government model as an issue and community-based science is part of a growing trend reversing the age old reductionist view to a systems view of the world reintegrating science with society and the human experience (Bradshaw & Bekoff, 2001). This new governance model integrates social and biophysical sciences of the interactions between humans and their environment with the complexity of societal processes and relationships (Bradshaw & Bekoff, 2001). Community-based water groups are involved in what is referred to as civil, participatory, citizen, stakeholder, or democratic science (Backstrand, 2003), which denotes a wider vision of science that is developed and enacted by the citizens, as well as by conventional scientific collection, data gathering and monitoring. Shrinking financial resources have seriously eroded the ability of governments to act alone, thus, arguing for this new model of governance based on citizen-based science working in intimate partnership with government scientists.

To balance the three imperatives for water sustainability (human health, environmental integrity and economic prosperity valued by the interviewees) requires both political and personal will and vision from both decision-makers and citizens. Legislation and traditional water planning and management strategies appear to be ill-equipped to deal with the water challenges ahead. The citizens in this case study were willing and able to participate actively to shape a water sustainable future with a high degree of volunteer capacity; in fact, they are vital to achieving this desired future state.

Strategic Questions

1. What are the entry points in formal government decision-making for citizens to participate effectively in other communities?
2. What are some the governance challenges associated with this resource?
3. Besides integration and coordination with formal government decision-making, what else is needed for a community-based monitoring program to be effective?
4. What are the benefits to government of this new governance model. What are the costs?
5. What are some of the ways that social capital can be integrated with traditional scientific approaches to expand the traditional science-based model?
6. How can governments honour volunteer capital and ideally, contribute to enhanced local social capital?

Resources and References

Backstrand, K. (2003). Civic science for sustainability: reframing the role of experts, policy-makers and citizens in environmental governance. Global Environmental Politics, 3(4), 24-41.

Bradshaw, G. & M. Bekoff. (2001). Ecology and social responsibility: the re-embodiment of science. TRENDS in Ecology & Evolution 16(8), 460-465

Brandes, O. & L. Nowlan. (2008). Water and the new business-as-usual in B.C. Victoria Times Colonist. Retrieved April 27, 2009 from http://www.waterbucket.ca/wcp/?sid=44&id=527&type=single

Brown, K. (2003). Three challenges for a real people-centered conservation. Global Ecology & Biogeography 12, 89-92.

Columbia Basin Trust Watershed Network website. Retrieved April 29, 2009 from https://ourtrust.org

Dale, A. (2001). At the Edge: sustainable development in the 21^st century. Vancouver:  UBC Press. 

Doppelt, B. (2003). Overcoming the seven sustainability blunders. The Systems Thinker 14(5), 1-7.

Kates, R et al. (2001). Sustainability science. Science, 292, 641-642.

United Nations Development Program. (1997). Governance for sustainable human development: a UNDP policy document. Retrieved May 6, 2009 from http://hdr.undp.org/sites/default/files/reports/258/hdr_1997_en_complete_nostats.pdf

Chris Strashok
Published December 12, 2009

Case Summary

Our social behaviours are affected by the characteristics of the money system that we use. Some systems of exchange foster competition while others encourage cooperation. Becoming aware of how our money works allows us to make knowledgeable choices about the money systems we use (Lietaer, 2001). This awareness gives communities the ability to adjust incentives and the structures within which transactions and trades are made, changing patterns towards goals that are environmentally, socially, and economically sustainable (Centre for Social and Economic Research on the Global Environment [CSERGE], 2004).

This case study examines whether the Victoria Local Exchange Trading System (VicLETS) contributes to greater community resilience within the community of Victoria, British Columbia, Canada. It considers whether the economic effects of Local Exchange Trading Systems (LETS) generate the necessary economic diversity and self-reliance needed to increase a community’s resilience (Dale et al, in press). Also, does the social capital that LETS fosters create a greater sense of community connectedness and cohesion? Finally, does LETS change an individual’s patterns of consumption and waste?

Sustainable Development Characteristics

Our current economic system is based on a model of competition for scarce resources with the goal of perpetually growing the economy, often excluding individuals and communities. Ecologically, this economic competition often results in a weakening of environmental regulations to further reduce production costs (Capra, 2002; CSERGE, 2005; Glover, 1999; Helleiner, 2000). This model also encourages society to think only of short-term gains, making it difficult to create changes within our society that counter the social, ecological, and economic stresses society is currently facing (Capra, 2002; Dale, 2001; Greco, 2001; Homer-Dixon, 2006; Kennedy, 2001; Lietaer, 2001; Linton, 1996; Milani, 2000).

Local currencies can be created and used alongside traditional money systems creating greater diversity locally within our communities. This new money can exist in sufficient supply; it stays local and is created by the community members using it to facilitate community relationships and change consumption patterns (CSERGE, 2004; Greco, 2001; Helleiner, 2000; Lietaer, 2001; Meeker-Lowery, 1996; Milani, 2000; Schraven, 2001; Seyfang, 2001a; Seyfang, 2001b). These locally-based and controlled economic systems allow communities to shift the value away from money as an end in and of itself and back to the skills and services that the individuals and communities can optimize, creating strong social networks in the process. This economic diversity also gives the community an opportunity to focus on the regeneration of people, the community and all living systems by re-building local systems of provision. 

Critical Success Factors

Trust is essential in a LET system. For a trade to be successful, attention must be paid to the relationship between the trading partners as well as the item being traded, North (1999) calls this ‘relationship trading’. Although at first this process of relationship building can be slow and time consuming (depending on the size and distribution of the members), in the long run, strong bonds are created that contribute to a strong economic network (Liesch & Birch, 2000). The case study revealed that for an effective LET system, and in particular, the VicLET system, the following factors are critical—communication; trade avenues; and, access to paid resources.

Community Contact Information

Chris Strashok, MA., BSc.
Nanaimo, British Columbia, Canada
Email: c_topher@shaw.ca

What Worked?

Members were able to gain skills using VicLETS that opened up new employment opportunities. A culture of recycling and repurposing was fostered as items were redirected from the landfill and reintroduced into the community. VicLETS is also excellent at creating social capital by creating strong bonding social capital between VicLETS members, particularly for newcomers to the community. This cultivates a spirit of community where opportunities for creativity and spontaneity were introduced. Some interviewees even reported that they felt they were able to participate more fully in life, as a result of their membership.

What Didn’t Work?

Two of the negative effects of social capital outlined by Newman and Dale (2005) are visible within the VicLETS organization: the exclusion of outsiders and excess demands on group members.

Although the exclusivity derived from being a member forms a close knit network of individuals, it also limits trading only to the membership. This exclusivity makes it difficult for the money to move through as many individuals as possible within the community, thus reducing the economic gains of the system (Annen, 2003; Collom, 2005). This exclusivity also keeps the system small. By keeping the system small, the amount of goods and services available are restricted and may be dispersed over large areas (North, 1999). Businesses are also indirectly excluded from participating in LETS since the costs of trying to integrate a cash system with a LETS account are too high for most businesses. Requiring a membership, limited trading opportunities and the high level of effort it takes to trade make it difficult for LETS to scale up and significantly offer a viable alternative to the current economic system.

Running the system and recruiting new members is also left solely to a core group of volunteers putting excess demands on these individuals. Without adequate support, these core members tend to burn out, causing the entire organization to stop working.

Financial Costs and Funding Sources

Because social and ecological costs, normally externalized in the traditional economy, are taken into account for goods and services traded in a LETS and there is a  lack of quantitative measures for these contributions, it is difficult to determine the costs and benefits of participating in LETS. However, enhancing local economic diversity and providing an economic alternative, promoting self-reliance, building a network of social capital and cohesion, changing the scale at which economic, social and environmental decisions that affect the community are made, and cutting material consumption are vital to increasing the resilience of communities, making them capable of responding to external shocks and pressures of our globalized economy (Dale & Newman, 2006).

Research Analysis

Information from this study was obtained by interviewing 10 members of the VicLETS organization. The interviews were open-ended, semi-formal conversations about LETS, social capital and local consumption. The intent was to learn how VicLETS contributes to the economic and social capital of Victoria, as well as the community’s resilience.

Detailed Background Case Description

Money is one of the most useful inventions that humankind has ever made. It helped us overcome the limits of the barter system and allowed us to exchange goods and services across the world, while also specializing skill sets (Kennedy, 2001; van Arkel & Peterse, 1998). Now, not everyone has to build their own house, grow their own food and make their own clothes to meet the basic human needs of food, shelter and protection from the elements.

Currently the entire world, in spite of the many cultural and social differences, is organized around a common set of economic rules (Capra, 2002), created for the single purpose of making money while creating a state of scarcity and encouraging competition (Capra, 2002; Kennedy, 2001; Lietaer, 2001). The result is a system where people are competing for scarce resources with the goal of perpetually growing the economy, excluding individuals and communities.

Fortunately, there is room within our society for additional currencies to be created and used alongside traditional money systems to create balance within our communities. This new money can exist in sufficient supply, stay local and be created by the community members using it (CSERGE, 2004; Greco, 2001; Helleiner, 2000; Lietaer, 2001; Meeker-Lowery, 1996; Milani, 2000; Schraven, 2001; Seyfang, 2001a; Seyfang, 2001b). While these currencies may be less efficient from a purely economic point of view, they are more holistic because they incorporate social and environmental factors as well (CSERGE, 2004; Helleiner, 2000).

According to ComplementaryCurrency.org (n.d.) there are currently 139 community currency systems operating around the world. LETS are the most abundant community currency model within the 32 models operating world wide (ComplementaryCurrency.org, n.d.). LETS works as a cashless trading group that is usually run by the members on a volunteer basis. Members trade goods and services among themselves and report the transactions to a central administrator that debits the purchaser and credits the seller. There are usually no limits on these accounts and no interest is charged on negative balances or given to positive balances. In this system it is just as respectable to be on the minus side, indicating work created in the community, as the plus side, indicating work contributed to the community (Milani, 2000).

The LETS examined in this study is the Victoria Local Exchange and Trading System or VicLETS, located in Victoria, British Columbia, Canada. VicLETS has been operating since 1983 and members trade goods and services directly using ‘Green Dollars’. There are currently 47 member accounts open in the system who can publish offers and requests of goods and services on the organization’s website. The goal of this organization is to manage, facilitate and promote an alternative local economic system of trade and exchange.

At its simplest, a LETS is a mechanism for facilitating trade that also focuses on building community and social cohesion (Seyfang, 2001b). The main premise of a LETS is that there are many people in society that have needs and wants and the ability and desire to work, however, this supply and demand is not matched due the shortage of national currency available (Williams, 1997). A LETS puts the needs and skills of a community first and then provides a method of exchange to facilitate the bringing together of the two (North, 1999).

In order to create the capacity to deal with complex issues, communities need to foster diversity and self reliance for processes at multiple scales and build a buffer into the system. A LETS allows the community to create an economic buffer by keeping the community energy and social capital within the community. This local circulation of money (or energy) buffers the community from economic shocks by reducing dependence on distant places for goods and services, making the economic space more manageable (as compared to the global economy), and bringing the community together by encouraging cooperation among community members (Benefits of Localization, 2007).

In addition to strengthening the local economy, a LETS promotes the goal of creating strong social networks within communities. The sense of community is created through the trading process. As members meet personally to make transactions, they increase the number of their community contacts, and widen their social network. Personal contact allows members to recognize the abilities and diversity found within their community (Caldwell, 2000; Soder, 2008). This combination of strong social networks built on reciprocity and trust is identified as social capital (Dale & Newman, 2006; Newman & Dale, 2005; Newman, Waldron, Dale & Carriere, 2008; Soder, 2008). Generating social capital benefits VicLETS members through the formation of trust, new friendships and increased social interactions within their community. By creating a diverse network of people, organizations with strong social capital are able to draw on this resource to achieve their goals. However, this study shows that only linking social capital is generated within this community, limiting the effectiveness of the organization for making broader change within the community.

By refocusing our energies with tools such as LETS to build intentional local communities, information, knowledge and wealth are distributed throughout the community, giving the community members the ability to create wealth and share in the decision-making process (Doppelt, 2003; Lietaer, 2001). This is a significant step from an ecological standpoint since the supply of local currency grows only when it is matched by an exchange of real goods and services. This moves the focus to qualitative growth, rather than quantitative, and reconnects communities to the ecological constraints faced by our real economy (Helleiner, 2000; Milani, 2000; Seyfang, 2001a).

Finally, the adaptability and flexibility communities require to build resilience have been locked up in governance systems that centralize information in a command and control structure placing the decision-making powers in the hands of a few so called experts. Our monetary system is an example of this. The use of such a system has locked us into a model that places our focus on either economic sustainability or environmental sustainability, but not both (Lietaer, 2001). However, these do not need to be conflicting or mutually exclusive goals. A LETS allows communities to shift the pattern of governance away from a command-and-control model (central banks) to a combination of local, national and international community networks.

However in order for any LETS to be effective, and for trade to flourish the following aspects need to be addressed: communication; trade avenues; and, access to paid resources.

Communication in any organization is vital to its success and is a central element of community networks (Capra, 2002). In a LETS, it is this communication that sets the social structures allowing trade to happen, and creating social capital. The main avenues of communication in a LETS are through communal gatherings such as potlucks or trading circles. These gatherings are vital to the health of any LET system. Not only do they bring members together in one location to sell their goods and services, but they also facilitate face-to-face connections, which foster the creation of social capital through community connections.

There also needs to be avenues for trade to occur within LET systems. Potlucks and trade circles play a major role in facilitating trade, however, there needs to be avenues for trade outside of these events. Other useful tools that VicLETS puts to use are electronic bulletin boards located on the organizations website, and regular newsletters. These tools provide opportunities for members to advertise their goods and services, to share information, and create awareness around the group's skills and talents. Something that other LETS' groups have done is to highlight stories of successful trades, which helps to build trust within the system and shifts the perception that individuals can only do a job if they are part of an organized professional group.

Finally, there needs to be someone available to put time and energy into the VicLETS initiative. Since VicLETS is run on a volunteer basis this can be a challenge and usually leads to volunteer burn out. In order for VicLETS, and LETS in general, to thrive, there needs to be hired staff paid in either Canadian dollars or a mixture of community dollars and Canadian dollars. Making the positions paid allows individuals to commit more time and energy to the positions (Williams, 1997).

The LETS is one tool that communities can use to shape their own self-reliance and re-value human activities that are essential to building sustainable communities and ecological economies (Milani, 2000; Schraven, 2001). Imagine earning and spending community dollars at local businesses for providing valuable community services, using a LETS to reuse and recycle items while connecting with other community members, supporting local farmers while accessing fresh food, or creating space for local businesses to thrive. These are some of the possibilities open to communities when diverse networks of open, adaptable community currencies are applied. Resilience is created through relationships, relationships we make with each other and the relationships we make with our environment. “A local currency is not simply an economic tool; it is also a cultural tool” (Swann and Witt, 1995, pg 10).

Strategic Questions

1. How can small pockets of strongly bonded individuals contribute to sustainable community development?
2. How can the ‘agency’ of an organization like VicLETS be turned into the necessary action required to manage these local monetary structures and build bridging networks within the community?
3. How are consumption patterns being changed with a LET system?
4. A LETS is a governance structure that allows a community to control their money and trading relationships. What are some other governance structures that can be brought back to the individual level and how?
5. What are some of the ways that the money we use affects the daily decisions that we make?
6. How can businesses be engaged in local currency initiatives?
7. What are other ways that communities can foster community resilience?

Resources and References

Annen, K. (2003). Social capital, inclusive networks, and economic performance. Journal of Economic Behavior & Organization 50(4), 449-463.

Benefits of Localization. (2007) Retrieved February 25, 2008, from http://www.baylocalize.org/localization/benefits

Caldwell, C. (2000). Why do people join local exchange trading systems? International Journal of Community Currency Research, 4(1). Retrieved July 9, 2007, from http://www.uea.ac.uk/env/ijccr/abstracts/vol4(1)caldwell.html.

Capara, F. (2002). The hidden connections: A science for sustainable living. New York, NY: Anchor Books.

Centre for Social and Economic Research on the Global Environment. (2004). Bartering for a better future? Community currencies and sustainable consumption (EDM 04-10). Norwich, UK: Seyfang, G.

Collom, E. (2005). Community Currency in the United States: The social environments in which it emerges and survives. Environment and Planning 37(9), 1565-1587.

ComplementaryCurrency.org. (n.d.). Online Database of Complementary Currencies Worldwide. Retrieved January 12, 2009, from http://www.complementarycurrency.org/ccDatabase/les_public.html

Dale, A., Ling, C. & Newman, L. (in press). Community vitality: The role of community-level resilience, adaptation and innovation in sustainable development. Sustainability

Dale, A. (2001). At the edge: Sustainable development in the 21^st century. Vancouver, BC: UBC Press.

Dale, A. & Newman, L. (2006). Sustainable community development, networks and resilience. Environments Journal 34(2), 17-27.

Doppelt, B. (2003). Overcoming the seven sustainability blunders. The Systems Thinker, 14(5), 2-7.

Greco, T. H. (2001). Money: Understanding and creating alternatives to legal tender. White River Junction, VT: Chelsea Green Publishing Company.

Glover, D. (1999). Defending communities: local exchange trading systems from an environmental perspective. IDS Bulletin 30(3), 75-82.

Helleiner, E. (2000). Think globally, transact locally: Green political economy and the local currency movement. Global Society, 14(1), 35-51.

Homer-Dixon, T. (2006). The upside of down: Catastrophe, creativity, and the renewal of civilization. Canada: Alfred A. Knopf Canada.

Kennedy, M. (2001). A changing money system: The economy of ecology. Retrieved October 14, 2007, from http://appropriate-economics.org/materials/a_changing_economy.pdf

Liesch, P. & Birch, D. (2000).Community-based LETSystems in Australia:

Lietaer, B. A. (2001). The future of money. London, England: Random House.

Linton, M. (1996). The money problem. LETSystems - new money: An overview of LET-systems, local currencies and the future of money, Retrieved July 9, 2007, from http://www.gmlets.u-net.com/explore/problems.html

Milani, B. (2000). Designing the green economy: The postindustrial alternative to corporate globalization. Lanham, MD: Rowman & Littlefield Publisher Inc.

Meeker-Lowery, S. (1996). Community money: The potential of local currency. In Mander, J. & Goldsmith, E. (Eds.), The case against the global economy and for a turn toward the local (pp. 446-459). San Francisco, CA: Sierra Club Books.

Newman, L. & Dale, A. (2005). The role of agency in sustainable local community development. Local Environment, 10(5), 477-486.

Newman, L., Waldron, L., Dale, A. & Carriere, K. (2008). Sustainable urban community development from the grassroots: Challenges and opportunities in a pedestrian street initiative. Local Environment, 13(2), 129-139.

North, P. (1999). Explorations in heterotopia: Local Exchange Trading Schemes (LETS) and the micro-politics of money and livelihood. Environment and Planning D: Society and Space, 17(1), 69-86.

Schraven, J. (2001). The economics of community currencies: a theoretical perspective. Unpublished honours thesis, Oxford University, Oxford, England.

Seyfang, G. (2001a). Community currencies: Small change for a green economy. Environment and Planning A, 31, 975-996.

Seyfang, G. (2001b) Working for the Fenland Dollar: An evaluation of Local Exchange Trading Schemes as an informal employment strategy to tackle social exclusion, Work, Employment & Society 15(3), 581–593.

Soder, N. T. (2008). Community currency: An approach to economic sustainability in our local bioregion. International Journal of Community Currency Research, 12, 24-52. Retrieved June 30, 2008 from http://www.uea.ac.uk/env/ijccr/abstracts/vol12(2)soder.html

Swann, R. & Susan W. (1995). Local currencies: Catalysts for sustainable regional economies. Retrieved March 18, 2008, from http://www.appropriate-economics.org/materials/

Williams, C. (1997). Local Exchange And Trading Systems (LETS) In Australia: A new tool for community development? International Journal of Community Currency Research 1. Retrieved November 3, 2008, from http://www.uea.ac.uk/env/ijccr/abstracts/vol1(3)williams.html.

Greg MacLeod and Chris Ling
Published August 31, 2009

Case Summary

Three or four billion dollars leave Nova Scotia in investment every year; very little comes back. Practically none is invested outside of Halifax, a buoyant economy. Like most of Canada, private development and government institutions are concentrated in metropolitan areas. The economic and social challenges of smaller communities in Canada are a major problem. Unemployment levels in metropolitan Canada are around 7 per cent. In non-metropolitan areas it is around 20 percent.

Local models for community-based economic development are starting to emerge. The Banking Community Assets (BCA) Group, a community venture finance group located on Cape Breton Island in Nova Scotia, Canada, is one such initiative. The BCA Group was established in 1989 in response to the community’s need for economic development. Greg MacLeod recognized the need for such an institution and led its creation.

The overall purpose of the BCA Group is to generate employment in the local area by supporting businesses that have strong potential for success and that are committed to the local community. A primary consideration is BCA’s ability to repay investment. The organization raises money and invests in businesses that are locally-owned and controlled. Employees are encouraged to invest in and participate in local businesses as well, enlarging local ownership and commitment.

BCA is directly responsible for the creation of over 250 direct and 500 indirect jobs. Over a period of twelve years, BCA became a complex consortium that strengthened the network of community-owned businesses in the local area, as well as providing investment and support for small, privately-owned businesses. Compared to many socially-oriented funds, the BCA initiative is small. The Chicago Shore Bank (http://www.sbk.com/) is worth hundreds of millions and the Québec Solidarity Fund (http://www.fondsftq.com/) is approaching the billion dollar mark. The total BCA portfolio is barely $3 million. What is significant is that BCA is not located in a metropolitan centre. Rather it is located in a persistently troubled economy in transition. The resource-based economy of Cape Breton has been in decline with some of the highest unemployment levels in Canada (12.8% in December 2005 and 17.2% in March 2009 compared with a national average of 5.9% in 2005 and 8.0% in 2009 (StatsCan, various dates)). Venture finance companies and many key agencies of government regarded out-migration as the only “rational” solution for areas like Cape Breton.

BCA was not started by any large organization such as a government, a large labour union, or a corporate business complex. While the BCA founders would have welcomed such support, it simply was not there. BCA is an example of a handful of people accepting the challenge of setting up a community venture finance company with very little backing in an economically depressed area. Another noteworthy aspect is that the founders did not have expertise in finance. It was always a matter of groping along, experimenting with different structures. Eventually, through trial and error, a viable business corporation has emerged.

Each member of the BCA Group has a different governance structure.

BCA Holdings Ltd: is a not-for-profit company. The members are volunteers who are asked to join by the existing board. The members elect the board every year.

BCA Investment Co-Operative Ltd is a profit-making company. It sells common shares to investors every year. These member investors elect the board every year.

BCA Venture Capital is a regular profit-making company. It is wholly owned by BCA Holdings Ltd. The board of directors is appointed by BCA Holdings Ltd.

Initially, BCA waited for opportunities to develop and appear. The group soon found, however, that opportunities seemed to be quite scarce. Hence, a new organization was formed: Cape Breton Innovation Research Centre (CBIRC). This is a joint venture between Cape Breton University and a number of local business leaders who had been active in BCA. The basic idea is that the group seeks out new ideas for business and tries to implement them. 

The boards of both BCA Holdings Ltd and BCA Investment Co-operative have made legal management contracts with Cape Breton Innovation Research Centre (CBIRC), so that CBIRC is the operating arm or fund manager for the other two BCA companies.

The plan is that CBIRC will be the only company with staff as the Directors consider that a portfolio under $3 million cannot justify staff. Financial management is controlled by volunteer directors with the assistance of a qualified chartered accountant, who is retained on a fee-for-service basis.

Sustainable Development Characteristics

Community groups in many countries take on public service activities and rightly demand that the government provide financial support for such activities. Most grants provided by government last one year and require annual applications to be repeated. This involves many negatives for community groups. First, the process consumes a lot of energy; worst of all, such groups feel constrained to please government. Second, when governments entered the age of deficits and most grants were eliminated, many community activist groups were disbanded. This is disadvantageous for civil society and the building of social capital, particularly linking, that is, bridging and vertical, social capital, which has been identified as the most critical for communities to move from ‘getting by’ to ‘getting ahead’ (Dale and Onyx, 1995). This was the context in which the leaders in New Dawn (a Community Development Corporation in the Cape Breton region and sister organization to the BCA group) and BCA tried to make their organizations self-sustaining and independent of government favour and budget cycles.

A community-business corporation like BCA is similar to a conventional business from the point of view of most operations. For instance, it must generate enough money to pay expenses and must deal with management and control problems. Iit is profoundly different, however, in many senses. A few of those differences are the following:

1. The key motivation is community improvement with profit being a means, and not an end in itself.
2. The total BCA complex is not simply owned by shareholders, but operates as a trust in the interests of the local community.
3. It is localized, builds on the local community, and is normally not moveable and not subject to being “bought out.”
4. It depends upon a high degree of volunteer involvement.

A criticism of the modern business corporation is that it has no loyalty to any one community, and in an increasingly globalized world, operates more and more independent of place. It is an institution that is self-contained. National corporations have developed into multi-national or international corporations that are sometimes bigger than most national governments (and are subject to no one particular government). When the conditions in one country become less profitable, the modern corporation simply moves to another country.

A community business corporation is rooted in a particular geographic location; it is place specific and is resistant to buy-outs from outside corporations. It is a debatable question whether it is possible to have business corporations so tied to one geographic area and still remain competitive. Most large corporations will vigorously oppose such a structure in the interests of business flexibility. Corporations like Mondragon in Spain (http://www.mcc.es/ing/index.asp), and smaller ones like New Dawn and BCA in Cape Breton, have disproved the theory that successful corporations have to be place neutral, and indeed, may be a critical economic diversification strategy by local communities to counter-balance the effects of exogenous shocks imposed by the global market place. Because of these experiences, a new economic theory is evolving called “place-based development” (Hudson, 2000; Williamson, 2002)

Critical Success Factors

The board of BCA Holdings Ltd has agreed that any director elected to the board of BCA Investment Co-operative also sits as a board member on BCA Holdings. Upon the advice of investment specialists, both boards have agreed to maintain the management contract with CBIRC for a minimum period of five years. Existing directors of CBIRC have agreed to remain as directors for five years. These measures were intended to protect the BCA complex in its early years, and to ensure longer-term stability.

The development of the BCA model was built on learning from other successful examples of community development corporations such as Mondragon in Spain which integrated different elements of business: production, retail, research, university education, and finance.

The creation of a partly professional board contradicted the accepted wisdom in community development circles on obtaining widespread community representation in a “grass roots” fashion. Investors, however, do not have confidence in amateur boards. Most people want to know who will control the money. Greater credibility is established if successful, experienced business people are seen to be making the decisions. If a businessperson refused to invest at least $5000 in BCA, there were two possible reasons. If he or she could not afford it, that would indicate a lack of business acumen. If the person were successful and refused to invest, then that would indicate a certain ‘meanness’. The technique of asking people to “put up or shut up” was quite an effective way of identifying and selecting board members consistent with its values and operating principles.

Its investment strategy, based on simplicity and risk reduction:

1. the company must be commercially viable;
2. the company must be seen as improving the local community good in some sense;
3. the company must be locally owned and controlled by more than one owner;
4. the majority of investment is secured by real property; and,
5. only investments over $75,000 were considered, since a number of government-related agencies were already available to service small-scale loans.

Community Contact Information

Greg MacLeod
Director
Tompkins Institute
Cape Breton University

gregmacleod@ns.sympatico.ca

tel 562-2420 or 567-0000

This case study of the BCA Group by Greg MacLeod was made possible through a research grant from the Social Science and Humanities Research Council of Canada. For more detailed information and bibliographic references please consult the web sites: http://faculty.uccb.ns.ca/tompkins or www.ced.ca.

What Worked?

The role of investor ‘angels’: Angels are investors who have disposable wealth to invest, but do so out of more complex motivations; a special interest, which could be environmental, social or personal. The angel frequently becomes personally involved with the client enterprise and also contributes key human capital that contributes to future success. The return is some return on capital, but also the thrill of accomplishment.

When Enterprise Cape Breton Corporation (ECBC) offered an interest-free loan of one-half million dollars and BCA needed to raise one-half million dollars within six months to access it, word was spread through its informal network (without a prospectus BCA was not permitted to advertise). Presentations were made to various organizations. People were buttonholed on the street and invited to invest. Within six months, BCA had raised more money than was required and commenced negotiations with ECBC.

Since BCA did not have an operating grant of any kind, operating capital was a problem. The board strictly forbade any expenditure of capital for operating expenses. All operating expenses had to come from earned income. In this, Cape Breton University (CBU) provided support. Through co-operation between CBU and the local community college, BCA was given free physical space to begin operations. Some students were engaged and volunteers used to get the system operational at minimal cost. The first part was subsidized by the Tompkins Institute of CBU at a level of perhaps $10,000 per year for two years, another type of ‘angel’ investor.

In practice, applicants to BCA usually had secured conditional agreements for loans and investments. A typical business may have a commitment from a bank, from a government agency, some personal money, and then an additional amount to complete the package. In the case of the Ingonish Ski Group, for example, they had a commitment from a government agency for $800,000 to purchase a new ski-lift if they could find a private investor willing to invest $150,000. BCA Holdings acted as the private investor and thus levered $800,000 with $150,000. Investment packages are usually made up of a number of blocks. Thus a group like BCA can mean success or failure in the completion of the investment package.

BCA’s structure is unique. This may be a result of the diversity of resources from which it was created, although none of the strong, established community business groups agreed to join the group. Many such ideas that appear simple and logical encounter tremendous resistance from inertia and the comfort of established structures.

What Didn’t Work?

Early in the development of exploring community investment vehicles, there were many avenues pursued that did not prove successful, some of which included the following.

1. 1987 New Dawn Enterprises had formed a “local investment committee” to seek means to finance new ventures. After much consultation with accountants and the Securities Commission, the member dropped the idea as being too complicated. 
2. In spite of much discussion with community-based development groups, the group could not break down divisive parochialism, referred to in French, as “l’esprit de clocher”. For example, the group tried to convince fishermen and small fish companies to join in an umbrella company called Bras d’Or Sea Products, but was unsuccessful.
3. In 1989, a company called Folktech was developed to introduce computer-assisted procedures to various community-based groups in Cape Breton. Most groups did not see the relevance of this kind of technology so the project was shelved.
4. Attempts to develop a complex of collaborating and co-operating community businesses in Cape Breton and the Atlantic region were not successful. Community groups were happy to send delegates to conferences and join networks of various kinds, but they were not ready to co-operate commercially. Many of the community economic development groups saw themselves as fulfilling the function of advocacy or popular education, preferring to leave commerce to business persons, instead spending a lot of energy in seeking government grants to support their administration.
5. Co-operators Insurance was approached to become partners in setting up a community investment company. After a number of meetings, Co-operators funded a study that examined financial initiatives across Canada such as Solidarity Québec. The result pointed out the good sense of such a venture. Co-operators eventually, however, declined to join the enterprise, following which Credit Union Central in Halifax was approached. The argument was made that the BCA approach was a continuation of the credit union movement, whose pioneers had preached about the need to control local capital for local development. In the end, the Central board declined to join since they saw their mission as focused on domestic finance and not business development.

It was extremely difficult for BCA to entice investors with no tax advantage whatsoever, showing the importance of strategic government policy designed to build existing capital in a community, not destroy it (Dale and Newman, 2008).

Financial Costs and Funding Sources

The three initial founders each contributed $5,000 to create an operating kitty of $15,000. A small board was organized and they asked their friends to lend money to the fund with an interest rate of four percent. This increased the fund to $50,000 in the fund. A few months later they heard that the local federal agency had offered $500,000 to the local Chamber of Commerce if they could match it in setting up a local venture capital company, which the Chamber declined. Immediately, the BCA Group applied to receive the $500,000. The federal agency would lend the money to BCA if BCA could raise $500,000 matching money within six months. BCA managed to achieve the goal and finally, along with 100 conditions, the federal agency lent the money to BCA Holdings.

In 1999, the provincial government initiated a programme called the Community Economic Development Fund Programme. According to this programme, a community group could set up an incorporated company and sell shares for local investment. For money invested up to $50,000, the investor could receive a 30% tax credit. The shares are also eligible for RRSP funds. This was very attractive since it meant a reduction in income tax for investors. Since BCA Holdings was not for profit, the group organized BCA  Investment Co-operative. The same people were in both organizations, but now there were two BCA companies. Between 1999 and 2000, BCA Investment Co-operative raised $1.2 million.

BCA Holdings Ltd is designed for low-risk investments since investors receive no tax credits. In general, investors who place amounts of $25,000 and more receive 5 per cent return, and for lesser amounts the return is 4 per cent.

BCA began to raise funds in January of 2000 for the BCA Investment Co-operative, and investors purchased $730,000 in common shares. In the first seven months, ten proposals were examined. The proposals covered a wide diversity from high tech to food products. Most of these initial proposals were declined because of too many unknown factors as BCA is not a lender of last resort and takes great care in choosing investments that their board understands and sees as having good long-term prospects.

Investors may invest in the BCA group in different ways: 

1. Make a loan to BCA Holdings and receive regular interest at 4% or 5%. BCA has never missed a payment to such investors.
2. Buy preferred shares in BCA Holdings and receive a dividend at 4%. Since the income tax rate is lower for dividends this is equivalent to 7%.
3. Buy common shares in BCA Investment Co-operative and receive a 30% provincial tax credit as well as a dividend beginning in year two.

Institutions and businesses prefer the first two methods since they do not receive tax credits.

For the 30% tax credit, investors are allowed a maximum of $50,000 per year. Some board members will invest $100,000 and divide it between two fiscal years. The BCA accepts anything from a minimum of $1,000 up from supporters. BCA's success is dependent upon a lot of small individual investors contributing to a larger pool of capital for local community development.

Research Analysis

The new interest in setting up structures such as BCA can be attributed to the realization that the traditional systems are not working for the benefit of the many citizens and local economies. On one hand, centralizing globalization squeezes out economically weak people and economically weak communities. On the other hand, western governments have reduced their commitment to regional economic development and social programs in an effort to reduce deficits. After many failures in their attempts to establish economic equity, most governments have relegated the task to free market forces. Indeed, governments have tended to intervene to assist large corporations through tax systems, research grants and trade liberalization.

Social commentators such as Heilbroner (1992) are pessimistic, and see the destructive nature of the traditional economic and commercial systems. Drucker (1993) notes:

“The mega-state has all but destroyed citizenship. To restore it, the post-capitalist polity needs a “third sector”, in addition to the two generally recognized ones, the “private sector” of business and the “public sector” of government. It needs an autonomous social sector.”

Drucker sees the new community-oriented business sector as a counter-weight to the abuses of the free-market system. In his pioneer study of the Canadian voluntary sector, Quarter (1992) argues that the survival of democracy will depend upon citizen participation in new forms of social economy.

Traditional corporate enterprises such as General Motors, Fiat, Siemens, or Shell Oil tend to centralize more and more, closing out branch plants in small communities in order to increase profits. Banks also tend to close branches and replace them with banking machines. Venture finance companies normally locate in major centres and invest mainly within a radius of 100 miles. More than ever before, large corporations have become international, moving from country to country according to the level of economic enticements. The result has been high unemployment in many smaller communities.

Communities all over the world are attempting to form alternative business structures. Thus, we can speak of the “third way” or the “third sector.” These new business structures are not completely private because they take on a public mission to serve the common good of the society. They are not completely public, however, because they are not controlled by elected government bodies. Since these new kinds of community businesses share the purpose of public service with government, they should qualify for financial incentives and programs given to other similar organizations. This type of assistance is very important, especially in the start up of new ventures. It should not be the kind of “core funding” that made so many community groups weak and dependent. It should resemble the kind of financial assistance given to private for-profit companies. Many hundreds of millions of dollars in interest-free loans, and forgivable loans were given to companies in Canada during the last quarter of the century. For instance, the government of Nova Scotia gave $20 million to Michelin to encourage them to remain in the province during the 1990s. Much of the government assistance given to large corporations has been siphoned off into the global system where there are no direct place-based benefits. If such money were given to the many businesses in the community business sector, the potential growth and multiplier effects would have been enormous.

In spite of their widespread presence, traditional forms of social economy have not been adequate in the face of the enormous economic changes that took place during the last thirty years or so. The social economy has been mainly concentrated in the retail-consumer area and in domestic finance through credit unions. It has not been flexible enough to serve as an instrument for job creation and economic survival in marginal economies (Laidlaw, 1975).

A new and rising response to unemployment and marginalization in many communities is the formation of community business enterprises. The concept of community enterprise is distinct, however, from cooperatives that are ambiguous over their mission (Melnyk, 1985) seeing their primary goal as service to their member shareholders or employees. A community enterprise has a concern for the wellbeing of the overall community. Priority is given to the common good over the private good.

The community enterprise may or may not involve worker ownership, but it must always involve majority local ownership and control. A community business corporation must generate enough money to pay expenses, and must deal with the management and control problems faced by most businesses. The key motivation of a community enterprise, however, is community improvement, with profit being a means and not an end in itself. A community enterprise is not owned by shareholders or workers, but operates as a trust in the interests of the local community. A community enterprise is localized, builds on the local community, is normally not moveable, and not subject to being “bought out”. A community enterprise depends upon a high degree of volunteer involvement.

The most notable case of a successful community business is that of Mondragon in northern Spain. Although this multi-billion dollar social-economic initiative is employee-owned, it is not a traditional uni-functional worker-owned co-operative. It is called “The Mondragon Co-operative Corporation” and includes a multi-functional complex of integrated co-operatives. One of the major keys to the Mondragon success is its related “community finance company” (MacLeod, 1997).

What we are seeing is really a reformulation of the concept of a “business corporation.” Gower (1969) has pointed out that the mass sale of publicly-traded shares by large corporations has not made them more democratic and accountable. Rather, he says, shareholders have become only fictional owners of the company (Gower, 1969). He claims that company law in most western countries is in urgent need of drastic revision to recognize this new reality. He states that managers have taken control of most large corporations and there are doubts about whether they are acting in the best interest of shareholders or the public. Community business corporations are part of the response to the new reality, and that lawmakers and governments should adjust public policy to accommodate this reality.

The term “community business corporation” defines a class of businesses that are specifically set up for the purpose of improving the local community and creating jobs. They are multi-functional or multi-sectoral which distinguishes them from most co-operatives. Clearly, there is a necessity for organizing new kinds of business corporations to perform the task that the conventional, dominant corporations do not, and perhaps cannot do, particularly in smaller- and mid-sized communities.

Investment Policy Tensions

On the one hand, BCA directors were volunteers out to help the community. Many fledgling businesses that could not get support elsewhere saw BCA Investment Co-operative as a lender of last resort. The BCA Group could be viewed as a charity out to help create jobs. On the other hand, the executive committee members were business people. They were adverse to business failure and they did not believe in investing in a business they did not think would be successful. Much discussion went on between the social good and the business good. The unanimous conclusion was that the BCA would only invest in businesses that were likely to be successful, with a role to help make them so. The board thought that a generous investment policy might only create short-term jobs, and would not contribute to long-term sustainable community development. The directors very clearly opted for the long-term approach and the management team adopted strong criteria for investment approvals. BCA Directors sincerely thought that this was the best way to help build up a strong economic base in the community, and its long-term viability is testimony to this strategy. One of the strengths of the model, therefore, is the private-university-public leader partnership created through the diverse composition of its Board.

Sectoral Specialization

Most venture capital companies specialize in one sector. Some companies are focused on high-tech business; hence, they assemble a staff knowledgeable in that sector. Others may concentrate on mining, or pharmaceutics. The idea is that the staff and directors have sufficient knowledge about the field to make a serious decision on investment. This works fine in large metropolitan centres like Toronto or Montreal. In smaller communities, however, the market is too dispersed for such specialization. Thus, the BCA Group decided to function as a universal investor. With some experience, however, the BCA found that it was simply not knowledgeable about many sectors and, thus, could not make sound decisions.

Detailed Background Case Description

Large metropolitan cities often prosper in macro-economic terms. Yet, there results a growing underclass of individuals who are under constant threat of being marginalized. Part-time employment rises and wage levels drop. At the same time, social assistance is restricted, programmes for affordable housing terminate, and unemployment insurance is cut back. Individuals are at greater risk in the large centres while in the smaller areas, the community itself, as a socially viable unit, is being dismantled. In large urban centres, unemployed people have greater access to support services. Investment companies and government tend to favour larger centres over more rural centres, and of course, the diversity of employment options is much lower in smaller communities.

On the other hand, smaller centres often offer more personal support from peers and extended families to the unemployed, however, this does not necessarily result in increased employment opportunities. The unemployed person in the non-metropolitan area can count on a complex infrastructure of family and neighbourhood support and while there is no money to hire a plumbing contractor, a skilled neighbour will help fix the plumbing. It is not unusual for a group of neighbours and friends to help put a new roof on the house of a friend. The negative is that there is such little hope for new business development in the typical single-resource based economy community.

With a worldwide employment decrease in the resource-based economy, a huge gap has developed between the centre and the periphery or between the metropolitan and the non-metropolitan. This is especially serious since the non-metropolitan areas are usually where traditional cultures flourish and grow. The metropolitan centres usually conform to the world-wide patterns dictated by the market. It is called “massification” of culture. Rural and small town life in most countries has been a fertile soil for the production of a great deal of culture. Culture, tradition and social relationships have no place in macro-economic management. In community business they do.

Most governments have favoured metropolitan growth and centralization. They claim that this brings economic growth and higher income for the nation. In Canada, even small provinces like Nova Scotia have adopted a growth centre plan favouring concentration of industry and universities in the capital of Halifax emulating the growth pole of Boston-Cambridge, which benefited from spin-off growth caused by concentration of scientific resources.

As explained above, the information/global economy impacts on metropolitan areas and non-metropolitan areas in very different ways. Thus, while new community business structures are required in both cases and the principles are the same, the structures will be different. Small places have very little infrastructure, especially after the government resettlement programs which dominated the last fifty years. Government policies favouring the centralized metropolitan model have developed programs that support selected growth centres in every region. While the economy in a string of major centres across Canada prospered, smaller places faced a brain drain as well as a capital drain. Of course, this was true in most other countries from China to Mexico.

Activists in both large places and in small places have developed a common consciousness that the system is not working well for threatened individuals and threatened communities. In Canada, as well as the United States, community activists have increasingly begun to experiment with new forms of corporate business as an alternative to the dominant corporate system.

A small group associated with New Dawn Enterprises had been discussing the need for a community investment company for two years. Organizers were fearful of the risks and legal hurdles. In 1989, MacLeod invited two key people to his house and discussed the problem. The three decided to jumpstart the process with each contributing $5000 to create a kitty of fifteen thousand dollars. A small board was organized and they asked their friends to lend money to the fund with an interest rate of four percent. Soon they had $50,000 in the fund. A few months, later they heard that the local federal agency had offered $500,000 to the local Chamber of Commerce if they could match it in setting up a local venture capital company, which the Chamber declined. Immediately, the BCA Group applied to receive the $500,000. The federal agency  would lend the money to BCA, if BCA could raise $ 500,000 matching money within six months.

BCA managed to achieve the goal and finally, along with 100 conditions, the federal agency lent the money to BCA Holdings. This proved to be an extremely complicated affair, involving two law firms and an accounting company in a process which lasted several months. During the process, the organizers kept in close contact with the Nova Scotia Securities Commission, which provided useful guidance. Government development agencies, such as the ECBC, were simply not prepared for, nor accustomed to, dealing with an investment company not motivated by profit maximization, and that had extensive and diverse networks, partnerships and alliances throughout the community. A delegate from ECBC was invited to participate on the BCA board as a non-voting member. Although BCA avoided the grants approach, the free flow of information proved to be very productive.

The Atlantic Canada Opportunities Agency (ACOA) in Moncton was approached for some money to do a feasibility study for a regional investment company. The study formed the basis for BCA Holdings Ltd, incorporated in 1989. The name was intentionally conservative since most people are reluctant to invest money in a company that sounds overly romantic like “New Dawn” or “Shining Waters Housing”. This was a not-for-profit company under the Companies Act. The effect of using this legislation is that BCA is technically a corporation and philosophically a co-operative since each member has only one vote. BCA Venture Capital Ltd, a regular profit-making company, was then set up to act as a fund manager. Since the corporate structure does not allow dividends to be paid or fees to be collected by directors, the corporation does not pay income tax. There is a legal obligation to reinvest all monies earned in a manner to benefit the local community. While it is a corporate structure for public benefit, it is not technically a charity and thus cannot issue charitable receipts. In effect, the structure was developed to suit the circumstances and intentions of the supporters of the BCA. It had two divisions: 

1. a banking-trust institution (BCA Holdings Ltd, a not–for-profit); and
2. a venture management company which could act as a conduit for investment funds (BCA Venture Capital Ltd, a conventional profit company)

By March 1989 there was a committee of twenty people from a cross-section of community groupings. They agreed on the following mission statement.

“To establish a financially successful Cape Breton-based financial institution which will assemble capital primarily in Cape Breton Island and reinvest those funds in stimulating economic activity in Cape Breton Island.”

The board of directors of BCA was designed to include both community leadership and business expertise. Its first board included:

Jim Kehoe (president of a major construction company)

Steve Farrell (mining engineer)

Greg MacLeod (philosophy professor)

Cathy MacDonald (organizational consultant)

Eric Latimer (retired banker)

John Currie (owner of an engineering firm)

(John Eyking, a prominent farmer and community leader, was soon added.)

The development of the BCA model was built on learning from other successful examples of community development corporations such as Mondragon in Spain which integrated different elements of business: production, retail, research, university education, and finance. Mondragon has 160 employee-owned cooperatives, involving over 30,000 member owners, with sales grossing $3 billion dollars US in 1991. Mondragon cooperatives are twice as profitable as the average corporation in Spain with employee productivity surpassing any other Spanish organization. It has its own bank, a research institute, an entrepreneurial division, insurance and social security institutions, schools, a college, a health maintenance system and a health insurance cooperative. Of course, Mondragon has grown immensely with 100,000 workers in seventeen countries and sales are over 18 billion. It would be more useful, however, for community groups to look at Mondragon as it existed in the 1980’s.

The first challenge and opportunity arose as BCA was negotiating with ECBC for an interest-free loan. Reserve Mines is a small community between Sydney and Glace Bay, which formerly depended on the local coal mine. It happens to be the site of the first credit union in English speaking Canada, founded in 1933 by Dr. Jimmy Tompkins, the famous pioneer of community business development in Eastern Canada. With the closing of the local mine and outmigration, however, the credit union suffered from the general economic decline. In the early 1990’s their building was dilapidated and unusable, but the credit union could not get financing for a new structure. Eventually community leaders approached BCA in search of a solution. 

After much discussion, BCA proposed a joint venture. A new co-operative company was set up called Tompkins Development Ltd. BCA purchased land at the key intersection and proceeded with plans. BCA convinced the credit union group that it was better for them to collaborate and become tenants of a bigger structure. In this process, the business members of BCA convinced the committee of the importance of being business-like. For instance, Tompkins Development Ltd, the new company, had to sign a turn-key contract with BCA giving over full authority on key decisions, although consultation was ongoing. The fee for this service was five per cent. The building cost $500,000, so that the service fee brought in $25,000 as income. This was a key strategy for success: it is a serious mistake for community businesses to provide services free of charge. Providing services free of charge is heart-warming, but it detracts from financial sustainability.

BCA insisted on signing up 70% of the tenants before building, in spite of pressure from the credit union leaders. The traditional approach by community groups is to build, and then seek tenants. So, from the first, sound business techniques were part of the BCA style. “Sweat equity” is also an important element to note in the subsequent success of this project. It is not just about financial capital, but valuable in-kind capital, especially access to expertise and sharing the risk. Several board members had experience in construction so their advice saved money. Two strategies made the project viable: first, BCA acted as general contractor, saving ten to twenty percent of costs; second, BCA negotiated an understanding with the trade unions whereby union workers were paid the union rate of $22.00 per hour, but donated $5.00 per hour to the community project. The CBU faculty also helped with the engineering design and business professors developed the business strategy. With a traffic flow study, BCA was able to recruit Tim Horton Donuts as the anchor tenant, and the regional library, and the Nova Scotia Credit Union League agreed to rent space for historic displays. These tenants provided enough projected revenue to justify construction and pay the mortgage.

The depleted coal mining village of Reserve Mines had suffered from unemployment levels of over 40% for a long time. Hence, the addition of a sparkling, brick and glass building on the main corner was a major event. Besides the 25 construction jobs, the building has created approximately thirty permanent jobs in the local community. More than that, it has become a gathering point for local people, group and committees to socialize, gather and meet, creating space for building different types of social capital.

Tompkins Place set the tone for BCA. It deviated from many conventions. It included a so-called social business like a credit union and a traditional business like Tim Horton Donuts. Yet all the tenants paid rent that would retire the mortgage in twelve years and provide an equity base for Tompkins Development Ltd.

More Investments

As Tompkins Place was completed, more people took notice of the BCA Group. With $750,000 in the treasury the board began to consider various requests. While there were a good number of small projects where entrepreneurs borrowed money and repaid the loan, Appendix A provides a brief description of some key investments made by BCA.

Strategic Questions

1. To what extent does the BCA ensure the businesses they are investing them are themselves sustainable (and not just economically so)?
2. How replicable is this model to other communities?
3. Is there a relationship between space for social capital and economic revitalization?
4. Does place-based economic development contribute to sustainable community development?

Resources and References

“Community Business Works.” (1982). A report by the Calouste Gulbenkian Foundation report. UK Branch, London.

Dale, A. and L. Newman. (2008). Social capital: a necessary and sufficient condition for sustainable community development. August 11th,
doi:10.1093/cdj

Druker, P. (1992). Post Capitalist Society. [n.p.], Butterworth-Heinemann.

Gower, L.C.B. (1969). The Principles of Modern Company Law. London: Steven & Sons.

Heilbroner, R. (1992)   Twenty-First Century Capitalism, Toronto: House of Anansi.

Laidlaw, A. Outline of an Address presented to a Community Development Workshop for the Atlantic Provinces, Wolfville, Nova Scotia, January 29, 1975.

MacLeod, G. (1992). Mondragon. Community Business Series. Sydney, NS: Tompkins Institute.

MacLeod, G. (1997). From Mondragon to America: Experiments in Community Economic Development. Sydney, NS: UCCB Press.

Melnyk, G. (1985). The Search for Community: From Utopia to a Co-operative Society Montreal: Black Rose Books.

Quarter, J. (1992). Canada’s Social Economy: Co-operatives, Non-profits, and Other Community Enterprises. Toronto: James Lorimer & Co.

Richardson, B. (1997). “Corporations: How Do We Curb Their Obscene Power? “ Unpublished internet paper. <brich@magmacom.com>. 1 April.

Stiegler, B. (1999). Le Monde Diplomatique. Supplement sur l’Avenir 2000-2099. December.

Yearbook of Cooperative Enterprise. (1992). Plunkett Foundation.

Appendix A: Example projects

A&B MECHANICAL (INDUSTRIAL PLUMBING AND HEATING): In 1992 an old, established industrial plumbing and heating company went bankrupt. The owners were retiring and there was no one to take over. The workforce was highly qualified and they attempted to reconstitute the company. The big obstacle was capital. The workers simply did not have the personal assets so the banks refused financing. BCA was approached and provided the capital. The support was based mainly on the character of the employees who became shareholders. The workers were members of the Plumbers Union and agreed that all workers would receive the same union rate of pay regardless of their management role. The company began with five shareholder workers but the average number of employees was usually around 25; at times, there were 200 union members on the payroll of A&B Mechanical Ltd. This company recently carried out a million dollar expansion and now has a solid record in major contracting, an exceptional success.

BRAS D’OR LAKES INN. http://www.brasdorlakesinn.com/ St. Peters is a small village in the middle of Cape Breton. When the small hotel went bankrupt many people became concerned. This hotel, built of cedar, was the central building in the village. BCA attempted to work with a local First Nations Group located close to St. Peters. In the end, the native group backed out of the agreement. After so much expenditure of time, BCA decided to proceed on its own in the hope that other community partners would be found. BCA was especially encouraged to purchase this hotel by many people who feared that too many local businesses were being bought by outside companies. Since taking over the hotel BCA engaged a variety of managers but none were willing to make a long-term commitment. This seemed to be the kind of business best done as a “Mom and Pop” operation where management makes a long term commitment. After losing some money on this operation, BCA Holdings persuaded a number of individuals to purchase shares from BCA and to take responsibity for management and possible sale.

BCA organizers learned an important lesson in the case of the hotel. Community investment groups cannot manage what they invest in. A key consideration is that each client must have adequate management skills for successful implementation. BCA board members have always been happy to advise, but they know that they must limit themselves to that advisory role. After that lesson, BCA has been extremely reluctant to become involved in in some very worthy and wonderful community business projects because they judged that there was no long term management capacity in place.

CHER RADIO: CHER Radio was the last locally owned media outlet with other radio and newspaper companies owned by national chains. When this company went bankrupt, BCA made a purchase bid out of concern for loss of local access to the media. Outside monopoly control of commercial radio is unacceptable to many community people in Cape Breton. The previous owners had lost over one million dollars in this business so that the risk involved was considered high. Recognizing that an “orphan” radio station is at even higher risk, BCA made a special effort to assure strong management support. Thus a joint venture agreement was made with an Atlantic Canadian chain of broadcast companies. The Chain became a minority partner and provided technical expertise. Most community groups launching into business will find that management is a key challenge. Most university business schools do not encourage their best graduates to work in the community business sector.

EAST COAST ROPE: In late 1992, a high-tech rope manufacturing company went bankrupt in Cape Breton. In an extremely fast procedure, the Canadian Imperial Bank of Commerce called for the sale of the assets withing a few weeks. Directors of BCA Holdings expressed shock at the possible loss of the heavily subsidized company and offered to negotiate, but the bank refused to slow the process. Within weeks American Manufacturing Ltd. of Louisiana purchased the machinery and attempted to move it to the United States. The community was outraged and blocked the roadways to prevent the plant machinery from being moved. Local church groups maintained a vigil in front of the plant so that the American company could not take the machinery which was high tech and world classs. BCA Holdings put together a group to take over the plant under the name "East Coast Rope". BCA Holdings provided $ 250,000 and outside investors were recruited to put up $ 750,000. Care was taken to assure that 51% remained local. BCA Holdings wass the largest single shareholder.

Management is delighted with the high quality and strength of the rope being produced. Approximately 30% of the product is sold on the West Coast of Canada. Upwards of 35 people are being employed on a 24 hour basis. Although BCA encouraged the workers to become shareholders, the workers preferred to form a labour union. Most labour unions are not comfortable with the notion of worker ownership.

SYDNEY MINES COMMERCE PLACE. In 1999 the main street of Sydney Mines had become desolate with plywood on the windows of several empty stores. BCA purchased several of the dilapidated buildings on the key corner in [date]. Local clergy were contacted and a new community co-operative was formed. The clergy-led co-operative sold shares and a new building was built. In the Sydney Mines case as well as the Reserve Case, these new buildings brought a new sense of hope to these former coal-mining towns. New service jobs were brought into the area and the new buildings became a focal point for local socializing, again creating space for social capital formation. From an investment point of view the risk was not very high and the benefits were numerous.

It should be noted that, generally, banks and venture finance compaines are risk adverse for financing the ventures just mentioned. In a very real way, BCA has been an alternative to the conventional banking systems which simply don’t function well in stressed economies. BCA has invested and survived without any grants or tax credits of the sort available to Nova Scotians investing in government approved companies such as Toronto-based “Working Ventures”.

WENTWORTH CONDOMINIUM. A group of local community leaders purchased the old and abandoned Nazareth House to build a new, four story condominium. The building, located by the beautiful and historic Wentworth Park, was a symbol of the past and is now giving way to “The Wentworth Plaza”, a symbol of the future. This will be a modern four story condominium similar to what is available in Halifax and Toronto. It came to the attention of the BCA Group that retired people were leaving Cape Breton to buy and live in condominiums in other parts of Canada. They soon came to the conclusion that retired people with solid pensions would stay if good quality condo living were available. Also, they found that many retired Cape Bretoners in other parts of Canada would return if condominiums were available. Organizers noted that there was no shortage of affordable housing in the area for low and middle income earners – but there was a lack of high-end low maintenance accommodation for professional retirees. With prices ranging from $100,000 to $280,000, it seemed like a good deal to someone paying $400,000 in Toronto for equivalent accommodation. BCA Holdings and Tompkins Development Ltd bought the land, found an architect and recruited clients. At this point the community group found that it too difficult to raise the six or seven million required, and so they sold the project to a commercial company and it will be built by Joneljim Ltd. The project helped to provide some counter to an economic and brain drain of professional retirees, employed local trades people and helps revitalize the downtown and local tax base.

Canmac Economics Ltd. estimated the total direct, indirect and induced economic impacts of the project to be:

• Construction phase: generate $2.8 million in household income, employ 86.4 person years and add $3.62 million in GDP.

• Operations phase: generate on an annual basis $369,000 in household income, employ 15 persons and increase GDP by $506,000.

Appendix B: TRACK RECORD BCA GROUP

Although almost every community with a population over 50,000 has a business research group, there is none in Cape Breton. We are arguing that this is fundamental in the new economy. Thus we have set up the Cape Breton Innovation Research Centre which is part of the Tompkins Institute at Cape Breton University and is linked to the BCA Investment Group.

The present proposal by CBIRC has grown out of thirty years of experience by a team of people including both business leaders and university professors. The activity was organized through the Tompkins Institute at Cape Breton University. While we were not the only element involved,   our participation was essential for every one of the following projects. We have picked only the major projects as examples. CBIRC is an attempt to systematize the process we have used over the years. We wish CBIRC to become self sustaining and to be a partnership with faculty, BCA Group and local business leaders and with government. The outputs will be new business developments.

1970’s

1. Cape Breton School of Crafts - now the CB Centre for Design

2. New Dawn Enterprises now employing over 150 people with assets over 15 million

1980’s

1. New Deal Development on Northside ( est 1983)

   1. Golden Pond Housing Cooperative
   2. Apartment Building ( 2008- over one million)

1990’s

1. BCA Group which launched the following

   1. Tompkins Centre in Reserve Mines ( Tim Hortons)

   2. Bras d’Or Lakes Inn   ( rescued after bankruptcy)

   3. East Coast Rope ( which generated Polysteel)

   4. A & B Mechanical ( over 30 employees)

   5. Commerce Centre in Sydney Mines

2000’s

Through BCA Group

1. Wentworth Condominium (financed by BCA initially)

2. Laurentian Energy ( through BCA Investment Cooperative as largest single shareholder)   Includes Fabrication plant ( recent order $30 million) 

3. Northside Fish Plant..since sold to Louisbourg Fisheries

4. Cheesecake Plant..in process of re-opening

5. Wood Pellet Plant

Catherine McEwen and Chris Ling
Published May 21, 2008

Case Summary

In early Novermber 1999, Salt Spring Island residents learned that land developers had purchased 10% of the island, including large tracts of forest uplands, farmlands, and almost all the lands surrounding the near pristine waters of Burgoyne Bay. Within a week of purchase, the company began clear-cut logging the lands.  The new owners logged heavily, despite the community's repeated request to slow the rate of logging, and to use sustainable logging practices. By the end of 2000, over 400 ha of forest had been logged. This story concerns the efforts of the activist community on Salt Spring Island to protect their sense of place.  For the most part, it is a success story.  The land purchase is a result of extensive community involvement as well as involvement from many organizations such as Capital Regional District (CRD) Parks, Islands Trust, The Nature Trust of British Columbia, Forest Renewal BC, The Land Conservancy of BC, and North Salt Spring Water District.  Although much of the forest was logged, land was also bought for conservation. Burgoyne Bay protected area resides within a larger conservation area of 1800 ha of park, ecological reserve and community watershed lands.

 Photo© Howard Fry

Sustainable Development Characteristics

The conflict over land resources on Salt Spring Island is one of a clash between simple market economics as a more holistic consideration of the value of land. It also raises questions of private vs. public rights, responsibilities for land use, and the ability of local communities to determine the future of ecological resources that provide them with valuable natural and cultural capital.

The Texada Land Corporation is within its legal rights to log these lands as they see fit, subject to a few limitations relating to logging in creeks and avoiding extreme slopes, but there are very real long term concerns of the ecological integrity of watersheds and old and second growth forest, the contribution of the forest landscape to the island tourist based economy, and the previous recreation use island residents had had in these lands.

Critical Success Factors

1. Positive community vision.

2. Community cooperation, and cooperation with larger, external organizations.

3. Wide range of activism carried out by independent self organising affinity groups involving extensive research on options and players, direct action, arts events, rallies, media engagement, fundraising and lobbying.

4. The support of government and non-governmental organizations to provide funding and to act as purchasers and stewards for land.

5. The provincial and federal governments were in the midst of the Pacific Marine Heritage Legacy, which involved the purchase and transfer of lands for island parks. This meant there was money available for land purchase that would not have normally been present.

6. The Nature Trust of BC and Capital Regional District (CRD) also had ongoing campaigns of land purchase which contributed to the fund.

Community Contact Information

What Worked?

1. Continuous and varied community pressure.  Tactics of direct action and media events such as a “Lady Godiva” ride though downtown Vancouver did eventually, through pressure from their main investors, lead Texada Land Corp. to limit logging and allow the community time to raise funds for purchasing the land.

2. The involvement of government agencies and NGOs helped to provide funds for land purchases and the means to protect the lands for conservation.

What Didn’t Work?

1. The ability of public and community bodies to buy land for protection at market prices at market speed.

2. Government inaction at the federal and provincial levels, slow delivery on promises and policies to restrict private logging operations, and lack of enforcement on existing laws, led to the conditions under which private logging could operate with little ecological or social consideration.

Financial Costs and Funding Sources

1. Funding to support direct action activity came from private individual contributions, public contributions at the monthly community town hall meetings, and from donations made to the Green Party of British Columbia.

2. The Salt Spring Appeal of The Land Conservancy of British Columbia coordinated the fundraising to buy the Burgoyne Bay land, and played a pivotal role in negotiating land purchase of Burgoyne Bay provincial park lands.  The Save Salt Spring group raised money separately and applied its the funds to watershed land purchase.

3. A 475 ha region of land surrounding Burgoyne Bay was bought as provincial park. The Nature Trust of British Columbia, with financial assistance from Forest Renewal BC, purchased 280 ha of adjacent area.  The area contains the largest stand of Garry Oak woodlands in Canada. The North Salt Spring Water District purchased 130 ha of land within the Maxwell Lake community watershed. 

Purchase Overview

Funding: CRD Parks, TLC of BC/Salt Spring Appeal, and The Province of BC 
CRD Parks: $1.5 million

* Total contribution: $1.5 million
* $500,000 in 2001 
* $1.0 million over five years (i.e., 200,000/year from 2002 to 2006)

Much of the land purchased by the CRD has since been sold to the provincial government.

Research Analysis

The short-term time horizons and largely economic considerations of private landowners are likely to come into conflict with local communities, especially if the land they are operating in has significant value to those communities or if the area of land being modified is significant. In this case, the land on which logging was proposed had significant cultural and ecological value, as well as a history of recreation use and a significant value to the islands tourist economy.

These values provided the motivation to a concerned portion of the island community. Given strength from their beliefs about the value of the land, and from the cross section of community solidarity, as well as the sheer scale of the proposed logging operation, the community maintained a variety of activities to pressure the landowner and government agencies, and to preserve the profile of the campaign in the media. The strength of the vision around which this activity took place was key to the success of the campaign, and the social capital created in the process led to maintaining the pressure, and ultimately a significant degree of success.

Detailed Background Case Description

The Island Demographics

Lying within an archipelago of islands in the Strait of Georgia, off Canada’s southwest coast, Salt Spring Island is the largest and most populous of the Gulf Islands.  Geographically Salt Spring Island covers an area of 18,535 ha and has a population of over 10,000 people (Garvie. 2001). By virtue of its population size Salt Spring has the amenities of a small urban centre, such as educational, social, and health services and shops, despite its isolation as an island.  Most of these services are located in one centre, Ganges, with lesser centres offering gas and groceries near two of the BC Ferries terminals, at Fulford and Vesuvius.  The island economy includes tourism, agriculture, and the service industry, as well as telecommuters.  Salt Spring Island is a favourite vacation destination. The population swells with tourists and seasonal residents in the summer and the weekly Saturday market of local farmers and artisans draws as many as 3,000 visitors (Friends of Salt Spring Parks Society, 2003).

Although Salt Spring Island continues to have a reputation as a community of artisans, farmers and retirees, recent demographic analysis suggests a changing population profile.  Garvie’s (2001) report offers the most comprehensive and recent analysis of island demographics. Island population has increased approximately 50% every decade over the last 30 years. Population growth on the island during the ‘90’s increased at twice the rate (2.4%) projected.   The dominant age sector in 1996 was slightly older than a comparative BC average. A significantly high percent of the working sector is self-employed (34% compared with 14% in the Capital Regional District {CRD}). About half the income reported on the Island comes from non-employment sources (versus 31% in the CRD), including government transfer payments, corporate pensions, and investment income. Incidence of low income on the Island is significant, with 47% of the households reporting income of less than $30,000. In contrast to this, since the 1996 Census, buyers of high-end properties are noticeably more affluent than in the past.  Salt Spring Island has become a preferred address.

Land Ownership

In 1962, German Prince Johannes von Thurn und Taxis was visiting the area and purchased the land.  The lands became known as the Texada lands after the name of his company, Texada Logging Company.  Until the Prince’s death in 1999, logging activities were operated with a long-term harvest horizon.  The lands developed a history of use by island residents for hiking, camping, and hunting.  The uplands represented the largest continuous tracts of forest on Salt Spring Island, to the effect that the lands were unpopulated and relatively wild.

Prince von Thurn und Taxis was the second richest man in Germany with assets exceeding $2.5 billion. Following his death, these assets dwindled to $500 US, and the heirs to the Prince’s assets chose to sell the lands on Salt Spring Island, in addition to other land holdings on Vancouver Island.  Texada Land Corporation, owned by Rob MacDonald, and in association with Derek Trethewey, purchased the lands with the intent to log the land of its merchantable timber in two years and afterwards sell the land.

What was at Risk?

The Texada lands represent 10% of Salt Spring Island. The lands include: large areas of natural habitat and ecologically sensitive habitat; lands within the watershed of drinking water for Ganges, the island’s main centre; salmon bearing streams; and, the surroundings of a near-pristine marine bay.

“The south and west part of Salt Spring, within which the Texada lands fall, is one of the largest undeveloped areas in the southern Gulf Islands with over 6000 hectares of mixed public and private lands mostly under forest, park or agricultural zoning and use.  This area contains one of the largest continuous second growth stands of Douglas Fir in the Gulf Islands.  Otherwise Douglas-fir forests of the regions are fragmented, creating a loss of larger species that require greater tracts of land, as well as species sensitive to the forest edge. The two largest peaks of the Gulf Islands are in this region, as well as 18 km of undeveloped coastline and the highest concentration of sensitive ecosystems and rare and endangered species in the region.  Development has been slowed in this region because of its relative inaccessibility and the high costs of road development”. (Penn, 1999)

“Of Burgoyne Bay – the sheer physical beauty of the place is obvious – beneath the magnificence of Mount Maxwell an unpaved country road meanders through Douglas fir forest on one side, open fields on the other, to a sparkling bay where a tow-hold [sic] of industry flanks a sweeping bay fringed by forest. . . . The place is called Hwaaqwum (hwaw-kwum) “place of the sawbill duck” a name that described its most important resource. Saw-bill ducks were harvested by the hundreds (by First Nations) with large aerial nets during the summer and autumn months, speared, singed and dried for winter use.  Herring was raked in the bay and sea-mammals hunted.  The shoreline harboured rich clam beds and a stream with coho and chum salmon taken in summer and dried.  Further inland were clearings of red-clover and camas fields, cedar groves and berry patches.” (Arnett, 1999)

The land within and around Burgoyne Bay harbours historical and cultural values from thousands of years of human activity.  Although the area has had human impacts (e.g. land clearing for farming, log sorts on land and in the water), it has had relatively little modern development. The Burgoyne valley and bay retains an atmosphere embracing the cultural and spiritual values of local First Nations and the heritage of one of BC’s first inter-racial settler communities (Arnett, 2003).

Conservation and Development

“. . . three women are perched against the largest arbutus tree in Canada within an ancient Douglas-fir forest.  There are five species at risk living within 100 metres of this tree.  The whole slope is a high risk for soil erosion.  Under our community plan no one can log here, but under the Forest Land Reserve regulations, there’s nothing stopping anybody.” (Penn, 2000)

The Islands Trust Act was enacted through municipal legislation in 1974 with the specific focus “to preserve and protect” the unique natural features of the Gulf Islands.  The Islands Trust was created in the same year to oversee land-use regulations on the Gulf Islands.  On Salt Spring Island, two trustees are elected from the Island population to carry out the “preserve and protect” mandate.

Through the Islands Trust Act, island communities have each developed their own Official Community Plan (OCP) that effectively serves as a land use plan. Municipal by-laws are passed to support the OCP.  After years of public consultation and community advisory groups, the Salt Spring Island OCP was adopted by the elected local trustees in 1998.

The Forest Land Reserve Act (FLR) and Agricultural Land Reserve Act (ALR) are provincial legislation intended to preserve forest and agriculture land.  (FLR designation was removed from such lands after the period this case study covers). Priority on these lands is given to those activities that support forestry and agriculture, respectively.  Most of Texada’s lands lie in either ALR or FLR. 

BC’s Forest Practices Code applies only to forestry on crown lands.  Until April 2000, there were no regulations for logging on private lands.  As of April 1, 2000, a number of regulations came into effect for logging on private lands in the Forest Land Reserve.  These regulations focused on protection of riparian areas, slope stabilization and erosion prevention.  The regulations are considered by conservationists as weak and not adequate to protect small, ecologically-sensitive, forested areas.

In 1995, the British Columbia government had entered into an agreement with the federal government to commit $30 million to the Pacific Marine Heritage Legacy Trust for land acquisition for parks in the Gulf Islands.  The Salt Spring Island community reminded the government of this agreement, and urged the release of funds for land purchase on Salt Spring.

In June 2000, the community asked the federal government to buy Texada lands – especially Burgoyne Bay, which would double the area of the proposed Gulf Island National Park, and protect the largest Garry oak meadow in Canada. In July, the Capital Regional District (CRD), with an interest in buying 1000 hectares of the Texada lands for a regional park (they previously made land purchases with a vision for more regional parks in the forest area) left the negotiating table.  After four months of negotiations, valuations, and appraisals, the CRD could not reduce the value Texada had placed on the timber resource, making it unaffordable.

In September 2000, politicians from four levels of government endorsed a proposal to make Burgoyne Bay a national park.  The proposal was hand-delivered to Prime Minister Jean Chrétien with an autographed calendar, Salt Spring Women Preserve and Protect, 2001. In January 2001, the federal government considered a $140,000 biodiversity package for purchase of unique lands in British Columbia.  The SSI community lobbied Environment Canada to consider the Texada lands around Burgoyne Bay.

Community organizations believed privatization could, if handled creatively, be one of the keys to protecting BC’s forests in the next millennium, as it could allow sustainable forestry practices with a promise of a future.  The Islands Trust is one organization hopeful of this. The Cortes Eco-Forestry Cooperative and West Kootenay Harrop-Proctor Watershed Protection Society are two organizations (there are many) that received support from BC Forestry Minister as they pressed for community groups to buy private forest land and carefully harvest it, however, there are numerous examples of private land owners who do not consider the future long-term for the forest.  Texada Land Corporation is clearly focused on a short-term horizon (2 years).  It’s clear-cutting activities are 5 to 15 times the sustainable rate - on lands that represent 60% of the Island’s Forest Land Reserve.

Watershed Protection

In 2000, Texada Land Corporation confirmed plans to log Mount Maxwell’s secondary watershed area.  Since 1916, Maxwell Lake has been a drinking water source on Salt Spring and is currently the main water supply for almost half of north Salt Spring, including Ganges and its business community.  This watershed’s near-intact forest cover is unique on the island, and maintains the consistently high quality of Maxwell Lake water. Water quality in almost all other lakes on Salt Spring has deteriorated significantly. If the Mount Maxwell area is logged water quality may be threatened for five years into the future and the cost of protecting this land from logging would be less than the future cost of water treatment (Holman, 2000). Texada agreed not to log the secondary water basin during the wet, winter months when heavy machinery would increase sediment and create erosion (Wilde, 2000).

Although about 75% of Lot 9 is in a Development Permit Area (DPA) which precludes logging, the Water District feels that the only way to control access and agricultural activity is to purchase this lot.  Unless the Water District can pay for the value of the land plus the timber, Texada apparently intends to clear cut the 25% of Lot 9 outside the DPA, and most of its extensive holdings in the “secondary” watershed (Holman, 2000).

Vision & Networking

In 2000, Elizabeth White, Campaign Appeal Fund Coordinator in Penn stated “The vision of the land protected for ecoforestry, organic farm trusts, community watershed, and parkland is compelling and keeps me involved.” Organisers of the community action were advised early on by a resident life coach, Bruce Elkin, to create a vision. Assessing the details of the reality of the circumstances and focusing on the vision, one can start to move towards realizing the vision.  Knowing the reality requires research and investigation of the facts, actors and any leverage either party has. Thinking big and taking small steps to get results creates an energy that leads to building momentum.  And this momentum was clearly a feature of the Save Salt Spring cause.

The “cause” had organization, but it had no overall leader.  Instead, people worked within groups to which they had an affinity by virtue of their interests and skills, hence “affinity” groups.  These groups operated independently of other groups and also in concert with a shared overall aim – to stop the industrial scale clear-cut logging and save the land. One group met weekly to strategize and served as a coordinating body between the affinity groups.  One of these affinity groups was the direct action group.  Using non-violent, public disobedience as a tactic for stopping the logging and creating media attention, the actions of lockdown to logging trucks were among the bravest actions, as was the acceptance of arrest and a potential criminal record.

There were many affinity groups and their existence, as a characteristic of the organization of the cause, enabled a wide variety of community residents to join into the action in a creative and individual way.  Just as important as the independent actions of the affinity groups was the critical link between the groups.  This was achieved in large part by a few specific individuals who had the means to appreciate the foci of the various groups and were able to move between and among the groups. As with a systems approach, each affinity group was independent, but in relationship with other groups, and together defined the greater form or cohesive body of action to stop the logging and save the land.

Exposing Media

In order to gain significant mainstream media coverage community organizations carried out a number of revealing ‘stunts’ or art and cultural related protests. The first was a calendar:

“Women who have staged protests, blocked logging trucks and taken out ads in local newspapers to save Salt Spring Islands’ trees are now baring it all for the cause in a charity calendar.  The stripping strategy by the island’s “female eco-warriors” – the latest in a series of tactics by residents attempting to save Salt Spring’s trees – has barely raised an eyebrow in the community of 10,000.”  (Salt Spring women ardent tree buffs. The Globe and Mail, Aug. 17, 2000)

Exposing the body often flies in the face of social taboos. If done in “good taste” (and this is subjective) and for a good cause, society may enjoy its whimsical quality and its suggestion of eros, but it is a statement much greater than providing entertainment.  For those women who participate, it is a strong statement, provoked from their inner self and aligns with their sense of place.

If the calendar had raised the profile of the island and the cause of the community, then more flesh might yield more exposure and greater effectiveness:

“I have a Ph.D. and no one listens.  But if I take off my clothes and ride my horse through Vancouver, there are suddenly seas of media and people who show up to listen.” (Briony Penn quoted in Gulf Islands Driftwood newspaper, Jan. 24, 2001).

Briony Penn rode Lady Godiva-like around Howe Street, Vancouver’s finance section, and the office of Texada Land Corporation.  Upon her steed, she wore a long blonde wig with garland and flesh-toned panties while escorted by other bare-breasted eco-warriors and calendar women.

“In blasé worldliness, media, understanding all too well the prurient tastes of readers, listeners or viewers, will always pay more attention to naked flesh than naked truth. . . .  the bared female breast remains more persuasive, more powerful, than the disciplined female brain.” (Hume, 2001) 

Not to be outdone the ‘Hunks of Habitat’ set up a website in 2002, which proved successful in raising quick money when funds for the ongoing campaign were short. On the website, leaves were offered up for purchase: 100 leaves at $100 a piece covered a shortfall in fundraising covering the costs of the land transaction.  The last minute nature of this stunt precluded significant media coverage, although there was some in local environment and free papers.  All of these exposing events proved very successful in quickly raising significant amounts of money.

Activism and Rights

In February 2000, at least a dozen islanders were served notices of SLAPP suits, and the newspaper the Barnacle was served notice with libel. SLAPP suits – Strategic Lawsuits Against Public Participation – are civil actions aimed at enjoining people from defaming or interfering with a company carrying on its business.  SLAPP suits are a corporate strategy imported from the United States, although they have been eliminated from a number of states.  BC Premier Dosanjh had proposed to make such suits illegal in BC, but the bill was not passed before his NDP government lost to the BC Liberals (Pynn, 2000). A SLAPP suit is a Court injunction, therefore, non-compliance with a SLAPP suit, is viewed seriously by the Court; failing to observe the conditions of a SLAPP suit can result in imprisonment.

The Arts

The Arts, in all its dimensions, infused the actions for the campaign, if they weren’t in themselves the event.  Community rallies and monthly town hall meetings were often opened with a new song recently composed by a resident musician or the Raging Grannies, with playback theatre, or poetry. Road blockades often were accompanied with drumming or chanting.  Designing buttons and bumper stickers, photographing and filming community actions and those of the company’s logged land, and sign painting were foundational to community actions. Most of these creations arose spontaneously and were an individual or group of individuals’ personal contribution to the campaign and the cause. Music concerts were staged on the Island and in Vancouver, featuring big-names recording artists such as Randy Bachman, to raise funds for land purchase. 

Theatrical performances were staged in Victoria and Vancouver against Manulife Financial, the company financing Texada Land Corporation. Another event, Salt Spring Island, Where Art Meets Nature, started as an art auction, and blossomed into nearly a fortnight of talks and presentations featuring such renowned environmentalists as David Suzuki, Robert Bateman and Bristol Foster (Parkes, 2000). A documentary film, “Ah the Money, the Money, the Money: Battle for Salt Spring”, is directed by island resident Mort Ransen for the National Film Board of Canada and aired on CBC TV's The Nature of Things.

Texada Land Corporation’s response

After one year of operation, the company was over half-way to meeting its goal of clearing the land of its merchantable trees within two years. In January 2001, an island resident discovered flagging tape on the trees in the old growth forest in Burgoyne Bay, although Texada Land Corporationhad given the community its word that it would not cut old growth forest:

“We will be harvesting second growth timber only; old growth trees will be left in place,” (Texada Land Corporation, Code of Principles, unpublished, Nov. 25, 1999).

One islander, Nina Raginsky, made a proposal to Texada Land Corporation to stop cutting the trees and allow the community to raise the money to purchase a conservation covenant to protect the old growth trees (>100 years old), in tandem with the more visible protests described above.  Texada Land Corporation agreed to halt the logging and allow time for the community to meet conditions for land purchase, and also placed a moratorium on further logging until the end of February and outlined conditions to be met in order for community land purchase to be possible.

On November 30, 2001, a deal was reached between all parties to purchase 665 hectares of lands surrounding Burgoyne Bay.

Land included in the deal covers an area from Mount Maxwell to the south shores of Burgoyne Bay as well as the slopes of Mount Sullivan, Mount Tuam and Bruce Peak. The landscape is mixed Douglas fir, Garry oak and arbutus forest with scenic rocky bluffs and lush valley-bottom groves of red cedar and ancient Douglas firs. Burgoyne Bay itself is the largest undeveloped bay and estuary left in the southern Gulf Islands. It contains significant conservation, recreation, wildlife, fish, and historic values. Two salmon streams run into the bay, which has about 2 km of sensitive tidal flat with extensive healthy eelgrass beds. It is also adjacent to the proposed Marine Conservation Area in Sansum Narrows.

Other now protected areas include: Maxwell Lake community watershed purchased by the North Salt Spring Water District totalling 127 hectares (317.5 acres) for $1.14 million, and 282 hectares (705 acres) on Burgoyne Bay purchased this spring by The Nature Trust of BC for $3.5 million. The Nature Trust bought the 282 hectare area of prime Garry oak meadow from Texada Land Corporation with funding from Forest Renewal BC's private forest biodiversity program.

Timeline of events

Organizations involved

-      Texada Logging Company (heirs to estate of Prince Johannes von Thurn und Taxis)

-      Texada Land Corporation (Rob MacDonald)

-      The Land Conservancy of BC (Bill Turner)

-      Mortgagers – Manulife Financial, & Princess Gloria Von Thurn und Taxis (one of the estate's heirs)

-      Capital Regional District (CRD) Parks

-      Provincial government – BC Parks, BC Forestry (Forest Renewal BC)

-      Federal government – Environment

-      Islands Trust Committee

-      The Nature Trust of British Columbia

-      North Salt Spring Waterworks

Resources and References

Arnett, C. PLACE – The Final Frontier. Unpublished document, 1999.

Arnett, C.  Appendix 1 – Cultural and Historic Values of Hwaqwum – Burgoyne Bay, Salt Spring Island, BC.  In:  Friends of Salt Spring Parks.  Burgoyne Bay Background Report. Unpublished report prepared for BC Parks, Salt Spring Island, BC, 2003.

Friends of Salt Spring Parks Society. (2003).  Burgoyne Bay Background Report – March 31, 2003.  Unpublished report prepared for BC Parks, Salt Spring Island.

Garvie, E. (2001). A Window of Opportunity:  Economic Profile of Salt Spring Island – 2000.  Unpublished report prepared for Human Resources Development Canada, Salt Spring Island, BC.

Holman, G. (2000). Private profit versus the public good. Green Island Vision Newsletter, Issue #1, July 7, 2000, published by the Green Conscience Fund.

Hume, J. (2001). Naked flesh still outdraws naked truth.  Islander.  Feb. 4, 2001.

Penn, B. Background information about the Texada Lands. Unpublished documents, 1999.

Penn, B. (2000). A Strange Year on Salt Spring – For 12 months developers have been logging Salt Spring Island.  Could nude island women bring chainsaws to a halt? Monday Magazine.  November 2-8, 2000, Vol. 26, Issue 44.

Parkes, A. (2000).  Art and nature meet on Salt Spring. The Barnacle newspaper, Oct. 24, 2000.

Wilde, A. (2000). Rally urges watershed protection. Gulf Islands Driftwood, July 26, 2000.

Dr. Chris Ling, Post Doctoral Scholar, Royal Roads University
Dr. Ann Dale, Canada Research Chair in Sustainable Community Development, Royal Roads University
Published April 18, 2008

Case Summary

This case study describes the creation and the first project of the Trust for Sustainable Forestry, a small not-for-profit trust created to develop small, ecologically sensitive communities in protected, but working forest environments.

The case identifies a number of key lessons, including the importance of partnerships, a potential drawback of community consultation and the possibility of creating planning zones that support a creative and multifunctional land use model that integrates ecological, social and economic imperatives.

View from the Ecovillage development site

Sustainable Development Characteristics

For any project to be considered sustainable, it must integrate decision-making for all three imperatives of sustainable development – ecological, social and economic (Dale 2001, Robinson and Tinker 1997). It perhaps must also be measured against likely alternatives and what would have been the result of business as usual. 

Financially, the project is funded by the return on investment obtained through the sale of the ecovillage plots – thereby enabling further investment in other sustainable development initiatives elsewhere and the preservation of the remainder of the forest for sustainable forestry. Its contribution to the economic imperative is the development of opportunities for local employment, and manufacturing products from locally sourced materials. The ecological imperative is integrated by the principles of eco-forestry based on a systems approach to the identification of timber resource that can be taken from the forest without reducing the ecological integrity of the forest ecosystem. The creation of live-work opportunities and the retention of resources and employment opportunities locally within the community meet the social imperatives of community development.

It is certainly more sustainable than two other likely alternative scenarios – the clear cutting and loss of the ecological and economic forest resources all together, or a low density rural development, which while possibly retaining some limited ecological functionality would have removed the possibility of the development of sustainable economic activity.

Critical Success Factors

The crucial elements that ensured the success of this project were:

1. the presence of a small number of key individuals with the vision and the ability to invest in the idea;
2. the creation of a new Community Land Stewardship zone in partnership with the local municipality that ensured the novel approach to development could be legally adopted; and,
3. novel multi-sectoral and multi-disciplinary partnership with public-private-not for profit on one hand and developer-business-activist-forestry partnerships on the other

Community Contact Information

1. Initial attempts at community partnership and consultation were unsuccessful due to an understandable scepticism and distrust of ‘developers’, a justified concern over dense development and what that meant for the sustainable management of water on the island, and an innate preservationist tendency in the community.
2. Despite project ideas and consultation with other municipalities, the model has yet to be tested in another locality.
3. In general, there are currently insufficient resources to take advantage of the opportunity presented by the current sell off of forestry lands owned by large timber companies on Vancouver Island and the Gulf Islands where private ownership of forestry land is much greater than elsewhere in Canada.

Financial Costs and Funding Sources

The initial investment to purchase the Everwoods site came from a small number of wealthy individuals led by Ann Mortifee, a well-known singer and musician. It is anticipated that the return on the investment from the first project, and the activities of the Living Forest Community Company will enable the Trust to be self-sustaining in the long-term.

Research Analysis

The two strands of this case study that have important lessons for the adoption of sustainable community development solutions are the importance of key people (nodes and leaders) and partnerships on one hand, and the recognition of the potential for multifunctional use of the forest resource on the other hand – sustainable and securing the future of the environment for all of those uses. Also interesting, is the reaction of the community to the prospect of development, even a development that seems to present only benefits for the island community, perhaps unique to island and/or smaller communities rather than large urban centres, which may suffer from an over-acceptance of development. The question of scale and limits of development, as well as questions of under, over, and uneven development remain to be seriously addresses by Canadian communities (Newman and Dale, forthcoming).

The project wouldn’t have started without the leadership of a small group of community leaders with the skills, financial resources and vision to make the project happen, and access to resources outside the community. The community as a whole was not interested, at the time, in a development-led solution to the threat to the forested lands on Cortes Island, and as a result were stuck largely waiting on trusts and charities to take responsibility and ownership of the land – but support from such trusts proved not to be forthcoming, resulting in the sell off of forest land to holding companies largely interested in liquidating the assets of a forestry lot, and then selling the land for development. 

The intervention of the future membership of the Trust for Sustainable Forestry to purchase the land ensured that it was, at least temporarily, taken out of the hands of the asset liquidators. The Trust, however, had to make a return on their investment as it was made up of a small number of individuals rather than a large Land Trust that could raise the money from charitable donations. The Trust had to, therefore, explore methods by which a return could be made on their initial investment. Realistically, this meant liquidating the natural capital on the site – a solution that contradicted the reason for buying the land in the first place.

Key people with business acumen, knowledge of real estate development, environmental expertise and sustainable forestry expertise were on-board with the project, and these skill sets enabled the Living Forest Community concept to be developed, resulting in the preservation of a multiple-use forest.

Both successful and unsuccessful partnership attempts were made in the initial start-up of this project. A key unsuccessful partnership was between the Trust and the community living on Cortes. The goals of the Trust and the community were ultimately the same: a desire to preserve the forest and ensure the resources of the island are protected. However, the way in which the Trust aimed to achieve this goal was greeted with suspicion in the community, perhaps understandably in a province known for unsustainable forestry practices throughout the 70s and 80s.

On Vancouver Island, there is natural resistance to ‘development’ as island resources are limited, and there was no a priori experience or knowledge of the type of residential development proposed by the Trust. In addition, there was an expectation that forestry activity meant clear cutting (as evidenced by previous forestry practices) and, therefore, the project raised suspicions on two fronts. Paradoxically, this resulted in the community partnership being deadlocked. The threat to the land was considered by the Trust to be so imminent that they were prepared to bypass partnering with the community, in order to achieve results.

Once a community partnership is created, is it ever necessary to break it, and what, if any, precedent does this set? Ultimately, this is a question of priorities:  do we believe that democratic decision-making, and community cohesion is more, or less, important than taking swift action in the face of imminent threats. Of course, this ultimately depends on the validity of the concern, and the degree to which the project is in keeping with the vision and concerns of the community. It is also a question perhaps of a vision being ahead of the majority, as sometimes happens with visionaries and new models of governance that are at the edge. There is, therefore, a need for leadership that can demonstrate to the community the compatibility of their vision with the planned development.  Perhaps the failure of the partnership between the Trust and the community could be described as a failure of imagination of the part of the community, and/or a failure of communication on the part of the Trust?

The successful partnership with the municipality compensated for the failure of the partnership with the wider community. This success is probably owed to the more measured and considered approach to decision-making that is available outside of the potentially confrontational atmosphere of community meetings. The partnership with the municipality was vital in the success of the project as it facilitated introduction of the new form of zoning, the CLS zoning. Zoning restrictions have oft been blamed for hindering sustainable land use planning and sustainable urban growth (Dale and Hamilton 2007), and would have done the same here if the Trust had not worked in partnership with the municipality to create a suitable form of zoning. The nature and development of this partnership with the municipality will be explored in the next edition of this case.

What makes this project sustainable is the marriage of economic development, community development and the sustainable use of a natural resource, in essence, sustainable development. All this is kept in check by a process of local governance and oversight that will inhibit inappropriate moves away from this model.

At the root of this project, is the belief that economic activity, ecological functionality and the development of society can co-exist in the same area of land without detriment to ecological integrity of a particular ecosystem. Multifunctional land use is one of the suggested solutions to sustainable planning (Selman 2002, Ling et al 2007) and the type of development evidenced in this case study is an example. The creation of a novel governance structure, the local Trust, and the CLS zoning was vital in allowing it to occur. Alternative mono-functional land uses of clear-cutting, low-density residential development or preservation of the forest do not offer as many opportunities nor as stable or sustainable a future as this multifunctional approach.

Detailed Background Case Description

In many parts of Vancouver Island and the Gulf Islands, the major forestry companies are divesting land assets to maintain income levels by liquidating some of their capital: Globe and Mail, Oct 5, 2007.

The level of private, as opposed to Crown, ownership of forestry land on the east coast of Vancouver Island, and the Gulf Islands is unusually high as shown in this BC Government map. The foresty companies' land sales, therefore, affect the land around many communities, and is often at such a scale that it arouses intense local community opposition, such as seen in another case study examining the community response to logging on Salt Spring Island.

In recent years, a substantial amount of land in BC has been sold by the major forestry companies, often to small logging companies or developers, depending on the location and development potential. In a number of situations, this has resulted subsequently in brutal clear cuts, serious ecological damage, and unpopular developments.

In order to prevent this, communities and individuals have devised a number of strategies to oppose such land management changes – some have been covered in another case [link to Salt Spring case] – this case introduces another, initially more personal, example of local leaders influencing, and even controlling land management in the Gulf Islands of BC.

The Trust for Sustainable Forestry, based on Cortes Island, BC identified a potential threat to a 153-acre lot of forestry land for sale by a major logging company. Previous experience from the islands suggested that the land would be purchased by a private logging company, which would then clear cut the site and likely not use non-local labour as  local loggers do not have the industrial logging equipment necessary for clear cutting. So, not only would there be significant damage to the island's ecology, no local economic or social benefits to the community would result from the enterprise.

A few individuals raised money to buy the land in order to develop a sustainable forestry project based on two small, pre-existing, but disused mills found on the site. Their aim was to renovate these mills and then use the remainder of the lot for sustainable forestry to preserve both the social and economic heritage of the site, as well as maintain its natural capital. To pay for this, and to make the project financially sustainable as well as create opportunity to purchase more land elsewhere, part of the 153-acre lot was earmarked for development as an ecovillage, which would then be sold on the open real estate market as the ‘Everwoods’.

This new concept was to develop a closed system with people living on the land, using the forest resources and manufacturing goods from those resources. The development philosophy was to be ‘light-on-the land’ with a dense ecovillage development on the property, and a covenant placed on the remainder of the property to ensure it is managed for eco-forestry in perpetuity. This model of dense development meant that the overall density of the development was no more than the allowed maximum when the lot is taken in the whole, but the clustering of buildings reduces the footprint of the development compared with typical lot-based development. The primary focus was to use the residential development to fund the preservation and sustainable use of the forest.

As there existed a strong preservationist focus within the community, the Trust's new concept met initial and vocal resistance from the island community. In many cases, communities are locked in a cycle of pro versus no development, with the result that in other larger areas, development occurs piece-meal and on an ad hoc basis. The hope in this community was that these lots would be purchased by land trusts and conservation organizations to protect the forest with no development whatsoever. There was also a fear that the island did not have the water resources and services to adequately support more development.

In areas where action hasn’t been taken much more significant ecological damage, however, has occurred through clear cutting processes. The money is not available to buy up the lots for sale for preservation of the forest ecosystem, and so the Trust's form of sustainable development may be the a viable way of preserving forest systems on a large scale – as the business principle behind the process allows for continued investment in other locations based on the success of the first project. There are additional economic and social benefits to the Trust's model.

The 153-acre lot was split into two zones; one where 80 to 90% of the land was placed under a restrictive covenant in partnership with the Land Conservancy of British Columbia. A covenant restricts use of the land for sustainable forestry in perpetuity, with allowable cut limits and management practice limitations and includes the mill, and its operation. The remaining 10 to 20% of the land has been developed for residential use.

A number of development choices were made in both areas of the lot to reduce the impacts, and enhance the benefits of the development. This meant that a different type of zoning was created to allow for the style of development to occur that was substantially different from the typical low density development found on the island. The typical zoning requirements for low density single family homes designed to reduce development to a ‘sustainable’ maximum aimed at reducing the load on, specifically, water resources – but this results in a net development footprint that is much greater than the net development footprint of the ‘hamlet’ model developed for the project. This model is for a cluster (in this case 15) of homes with common infrastructure and a communal strata constitution that create cooperative living within the forest, minimizing the development footprint of infrastructure and services while optimizing the development potential of the 153-acre lot as a whole.

The process of raising money for the project, and ensuring responsible management, resulted in the creation of two entities, one a public-private partnership and the other a public one:  the for-profit Living Forest Communities Company, which handled real estate selling and marketing etc. and the non-profit The Trust for Sustainable Forestry, which co-holds the forestry covenant (with TLC) and also acts as the focus for the locating and purchasing of land for future projects. Profits from the former serve to repay the initial investments to buy the properties and to build up the Trust. To date, the return on investment on Cortes has led to the consideration of a new project opportunity at Shawinigan Lake in BC. Lessons learned from the initial steps of the Cortes project are to encourage the municipality to create an appropriate new zoning types based on the Community Land Stewardship Zone adopted on Cortes for the Everwoods project.

The current position of the community on Cortes will be examined in a future edition of this case study.

Strategic Questions

1. This project involved multi-sectoral, multi-disciplinary partnerships and instigated a multi-use/function landscape development. Is this complexity an inevitable result of an attempt for sustainably developed land us, and an essential component of sustainable development?

2. Are there tools and techniques that can be used to communicate more effectively to communities the benefits of sustainable development versus traditional development in situations of highly polarized views about development in general? 

3. Would this trust model be effective in other landscapes, such as grasslands/prairie ecosystems?

4. Would this model be replicable in other communities, and is it scalable?

Resources and References

Dale, A, 2001, At the edge: sustainable development in the 21st Century, Vancouver: UBC Press

Dale, A. and J. Hamilton. 2007. Sustainable Infrastructure: Implications for Canada’s Future. Final report prepared for SSHRC/Infrastructure research grant

Ling, C, J.F. Handley and J. Rodwell, 2007. Restructuring the post-industrial landscape: A multifunctional approach, Landscape Research, 32(3): 285-309

Robinson, J and Tinker J, 1997, 'Reconciling Ecological, Economic, and Social Imperatives: a New Conceptual Framework' in T. Schrecker (ed.) Surviving Globalism: Social and Environmental Dimensions, London: Macmillan p 71-94 

Selman, P. 2002. Multi-function landscape plans: a missing link in sustainability planning. Local Environment. 7: 283-294.

Moving to the edge

Merritt’s new commercial core is located at the northern edge of town, near a freeway access. Gas stations and fast food outlets were the first to be built; these were followed by ‘big box’ stores, culminating in a Wal-Mart. There has been a recent dispersion of businesses to a new landscape where shops are separated by roads and parking lots, reflecting a banal ‘suburban’ form lacking scale sensitive community connections.

Growth, rather than development, has meant moving outwards, and at first glance this is not unreasonable. Merritt seems to have ‘space’ to grow; and like many other communities, expansion means growing at the periphery. What has been sacrificed in the growth process are opportunities for thinking and developing in ways that would support a cohesive and vibrant town core and pedestrian-oriented form, perhaps at the expense of social capital. The community now also faces some very demanding water management problems, and in the long-term this may determine growth rates.

Conclusions

The ‘main street’ is usually the heart of any community. It represents where a community has come from and where it is going, is important for attracting investment, and as an integral place of social intersection, it also serves to reinforce or build bridging social capital. The state of a community’s core may also reflect the state of its social capital. Identity is reflected in the architecture, public buildings, retail space, and cultural institutions located in a centre, which in turn tells a community’s story. Downtowns are historically compact and represent a scale of interaction that is cost efficient to service, better planned than edge development, and less dependent on cars – in other words, sustainable.

Merritt, like many other North American communities, has succumbed to depersonalized retail architecture, and has lost many of its small community-based businesses. The centre now imparts an image of decline, poor building maintenance, and empty streets. While efforts at revitalization have occurred in the past, and are being considered once again, they are unlikely to succeed since the commercial life of the community has already bled to such a great extent to the edge. With this process comes the relocation of public life to private space. The ‘conversations’ with residents reflect three themes: the absence of strategic or planning thought; lack of integrated design that considers both place and social needs; and, a lack of civic leadership. These in turn mirror larger processes of privatization, neo-liberal economic policies, and attendant decline of public spaces.

The study of Merritt shows that social quality is not necessarily a requisite for economic development.  The town has grown and prospered with gaps in the quality of social capital, but the long-term potential for dealing with transition growth and a declining set of social indicators is certainly weakened without a strong social capital base. If the elements of spatial organization that help support social capital are weakened, then a community will find it even more difficult to adapt to new stresses, and will have trouble developing new opportunities, or upholding the fundamental social elements of community well being.

Like many other small towns, Merritt has yet to capitalize on the importance of place and spatial quality to social and economic wellbeing. Decision-makers must think creatively about how places help determine the qualities of social capital, how they can create ‘space’ for social relationship, how places can be created to enhance ‘positive’ social capital, and how they can be structured to facilitate the bridging of networks and enhancement of access to social and economic opportunity.  If the elements of spatial organization that help support social capital are weakened, or destroyed, then places where there is already a paucity of social capital will find it even more difficult to adapt to new economic stresses, develop new opportunities, innovate, or sustain the fundamental social elements of community well being. There is a need to look at the relationships between public policy makers and the private forces that increasingly determine the shape of places, and the lack of quality of place for building community.

Strategic Questions

1. How do the dynamic interaction of place, space and social capital characteristics interact to contribute to the creation and mobilization of community networks?
2. Is social capital really necessary for sustainable community development?
3. Why do communities consistently ignore or lose opportunities for facilitating sustainable development or enhancing social capital?
4. Given the dominance of edge development, is the geographical core of a community still important? Why should we worry about downtowns anymore?
5. How can a concept such as social capital be turned into positive planning action?
   

Resources and References

Dale, A. and J. Onyx. 2005. A Dynamic Balance: Social Capital and Sustainable Development. Vancouver: UBC Press

Hanna, Kevin S. 2007. Successful downtowns: experiences from Vancouver Island, Plan Canada, 47(1):36-39.

Hanna, Kevin S. 2005. Planning for sustainability, two contrasting communities. Journal of the American Planning Association, 71(1):27-40.

Newman, L. and A. Dale. 2006. Homophily and Agency: Creating Effective Sustainable Development Networks. Environment, Development and Sustainability, Springer (embargoed)

Newman, L. and A. Dale. 2005. The Role of Agency in Sustainable Local Community Development. Local Environment, Vol. 10(5): pp. 477-486

Wade Alcock, Michelle Bigg, Jodine Kraatz, and Shaun Quinn
Original report produced in 2002

Undergraduate project supervised by Ann Dale
Edited by Chris Ling

Published January 11, 2008

Case Summary

This study proposes various short-, medium-, and long-term recommendations on how to reduce greenhouse gas emissions in the personal transportation sector.  The recommendations were based on information gathered through extensive literature research and interviews, as a result of an undergraduate science research project, supervised by Dr. Ann Dale.  The interviewees were selected based on their expertise in the personal transportation field, and consisted of people from government, non-government organizations and educational institutions.

The study was sponsored by the Green Budget Coalition (GBC) in cooperation with Royal Roads University in 2002; this project was developed to identify the student perspective on opportunities for greenhouse gas (GHG) emission reductions from the personal transportation sector. The GBC is an alliance of 16 environmental and conservation groups, several of which have researched and produced numerous publications on transportation and greenhouse gas emissions reductions.

Sustainable Development Characteristics

While reducing harmful air pollutants has been the main focus for much of the air quality legislation impacting the transportation sector, greenhouse gas emissions are of greater concern as they contribute to global climate change. The impact of climate change on a global scale is predicted to have catastrophic effects on the earth’s ecosystem and its function.

Personal transportation represents the single largest contributor to greenhouse gas emissions in the country. This characteristic alone provides substantial opportunity for GHG emissions reductions in Canada. In addition to the benefits that GHG reductions may yield, simultaneous reductions of the various other auto emissions may also improve air quality.

Critical Success Factors

Short-Term

1. Encourage Canada Customs and Revenue Agency to support employers in providing tax-free transit passes.
2. Support provincial governments and transit authorities in utilizing cost-benefit analyses models for transit investment decisions.
3. Create a Sustainable Transportation Fund in partnership with other agencies and organizations.
4. Implement a green-tax on gasoline to raise revenues for ethanol production.
5. Implement a technology standard requiring all grades of gasoline to contain a minimum of 10% ethanol.
6. Utilize fleet vehicle purchasing power to drive the demand for alternative fuel vehicles.
7. Provide funding to Health Canada for a health-based anti-driving advertising campaign.
8. Encourage / require Canadian municipalities to establish growth strategies that incorporate urban growth boundaries and TDM systems.

• Mid-Term

1. Support natural gas refueling stations and promote the production and use of natural gas vehicles.
2. Initiate and support natural gas refueling stations and promote the production and use of natural gas vehicles

• Long-Term

1. Create a Sustainable Transportation Fund to ensure long-term funding for municipalities to invest in transit capital.
2. Establish a hydrogen fulled transportation system.
   

Financial Costs and Funding Sources

The federal government could apply a variety of economic measures to achieve the goal of reducing greenhouse gas emissions from the transportation sector.  In the short-term, a green-tax on gasoline would make drivers pay for the costs that they are imposing on society and promote alternative forms of transportation.  Revenue that is generated from the green-tax on gasoline could be redirected toward ethanol production and a technology standard could be implemented to ensure all grades of gasoline in Canada contain a minimum of 10% ethanol. As well, subsidies could be shifted from unclean energy resources in order to guide the energy market toward the desired sustainable alternatives such as hydrogen energy. The Canadian government must strategically plan and use its purchasing power to influence the market demand and price of alternative fuels.

Research Analysis

There are seven key areas of sustainable development that are the focus of any development of a personal transportation:

1.    Implement Environmentally Sustainable Transportation (EST): Federal government action on environmentally sustainable transportation (EST) could be accelerated, increased and further coordinated. This includes implementing a variety of strategies such as Transportation Demand Management (TDM) and employer-provided tax-free transit passes.

2.    Create A Sustainable Transportation Fund: A Sustainable Transportation Fund could be created by the federal government in partnership with other agencies and organizations under the guidance of a multi-stakeholder body to do the following: designate funds exclusively to support public transportation, investment in public transportation infrastructure, alternative urban design and alternative modes of transportation.  This long-term fund could provide support to successful applicants, enabling transit agencies and municipalities to plan and invest in long-term environmentally sustainable transportation solutions.

3.    Implement Urban Growth Boundaries: Municipalities need to be encouraged/ required to establish effective, yet realistic urban growth boundaries considering effective use of TDM strategies. This should reduce spatial expansion of the city by delineating the urban parameter.  Concentrating growth within urban centers may create population densities that are able to sustain viable and efficient transit systems.

4.    Create Efficient and Effective Transit Systems: Long-term funding must be made available to reduce transit capital and operational costs.  Additionally, plans could be developed to improve and expand transit services to meet increasing demands.  This funding could help enable municipalities and transit providers to invest in the most socially, environmentally and economically beneficial modes of transit.

5..      Alternative Fuels as an Option for Reducing Greenhouse Gas Emissions: In the short-term, government support to increase demand and reduce capital costs for the production of ethanol is essential and regulations requiring the use of ethanol-blended fuels must be established. The mid-term initiatives could prepare for the long-term objectives by supporting the development of natural gas refueling stations and promoting the production and use of vehicles fuelled by natural gas. In the long-term, a hydrogen fuelled transportation system and refueling infrastructure could to be established. A full life cycle analysis for all potential sources of hydrogen production and distribution could be conducted and integrated into a long-term objective plan. Government support for technological advancement through strategic planning, subsidies, tax breaks, and effective use of buying power may create an efficient conversion toward this sustainable alternative.

6.    Social Paradigm Shift in Canada to Promote Sustainable Transportation: A health-based anti-driving advertising campaign by Health Canada to promote the necessary paradigm shift in the attitudes and behaviors of Canadians may promote awareness of the connection between driving habits, air quality, and human health concerns. This attitude shift could reduce reliance on the personal automobile and support more sustainable modes of transportation. These measures could be implemented in the short-term to provide long-term benefits.

It is evident that a diversity of changes and incentives have be made in the personal transportation sector to protect the health of humans and the environment, to improve the quality of life in urban centers and to ensure community sustainable development in the future.

Canada is in a unique position globally to make changes in the personal transportation sector and can seize the opportunity to become a global leader in the reduction of greenhouse gas emissions in the transportation sector for the following reasons:

1. The need to make change is proven and undisputed, as the transportation sector in Canada is the single largest growing contributor to greenhouse gas emissions in the country. Canada has a skilled work force capable of developing and implementing new transportation technologies, including alternative fuel and alternative vehicle technologies that could be sold around the world.
2. The federal government has the regulatory capability and a multitude of economic incentives that could be used to reduce greenhouse gas emissions and promote environmentally sustainable transportation initiatives including TDM strategies and employer-provided, tax-free transit passes.
3. The federal government has the ability to influence, support and provide resources to municipalities that could encourage the implementation of urban growth boundaries and other planning initiatives that promote environmentally sustainable economic development.
4. The federal government could use the various tools to reduce greenhouse gas emissions in the transportation sector and help meet international obligations.
5. Educational campaigns by agencies such as the federal Department of Health to change individual attitudes toward driving are likely to be successful based on the success of campaigns aimed at changing people’s attitudes about smoking cigarettes.

Short- and long-term action to implement measures to reduce greenhouse gases in the personal transportation sector could result in social, economic and environmental benefits. Additionally, action taken may reduce the effects of global climate change resulting from greenhouse gases produced in the Canadian transportation sector.

Education and changing attitudes to personal vehicles could also enhance improvements to quality of life and the environment arising from policy implementation. If strong action is taken by all levels of government and the public on environmentally sustainable transportation now, Canada could maintain its high quality of life.

Detailed Background Case Description

Environmentally Sustainable Transportation (EST)

Environmentally Sustainable Transportation (EST) is becoming an important focus for governments around the world due to the increasing number of vehicles on roads, increasing traffic congestion, poor air quality in urban areas, increasing health concerns related to emissions and the impact of vehicle emissions on global climate change. Canada is the ninth highest emitter per capita of greenhouse gases and emissions have increased by 19.6% above 1990 levels (Environment Canada, 2002). In Canada, despite the sense of urgency expressed by many agencies and organizations and the many current efforts to address EST, progress has been slow and difficult to measure thus far. Furthermore, there doesn’t appear to be a declining trend in personal driving behavior as roads continue to become even more congested and more vehicles are put on the road each year.

Achieving EST is likely to require a combination of multiple approaches such as improving public transit systems, supporting and encouraging alternative modes of transportation, encouraging innovation of renewable energy technologies and increasing standards for vehicle emissions (PMCTF, 2002).  These changes require a strong commitment and economic investment by governments and organizations to initiate a paradigm shift in public attitude.

Transportation Demand Management (TDM) strategies could be part of the solution, many of which are cost-neutral and relatively easy to support in the short term.  Transport Canada encourages TDM strategies and could develop a dedicated source of funding, such as a sustainable transportation fund (STF), for long-term solutions that require additional resources to achieve significant changes toward sustainable transportation

Mechanisms for taking action include implementing changes in government policy that offer incentives for people to take alternative forms of transportation.  An example of an economic incentive requiring government support that would be more environmentally sustainable than subsidizing personal automobile use is the employer-provided, tax-free transit passes.   Many notable reports address the need for change in the transportation sector and recommend the tax-free transit passes including the Transportation Climate Change Table Options Paper (1999) and PMCTF (2002) both of which identify this as a priority.

The federal government has a responsibility both domestically and internationally to support environmentally sustainable transportation initiatives.  Domestically, progress appears slow despite countless reports and efforts (from agencies such as Transport Canada) identifying TDM strategies that promote environmentally sustainable transportation.  Federal action is needed to fundamentally change public opinion and behavior concerning transportation.  This could be initiated through aggressive advertising campaigns similar to stop smoking campaigns.

Internationally, the federal government has a responsibility (as a member of organizations like the OECD) to take action on environmentally sustainable transportation initiatives.  Additionally, the action in this area could lend credibility to Canada’s international efforts in the Sustainable Cities Initiative.

A Sustainable Transportation Fund (STF) is required to support transportation initiatives that require long-term planning (15-20 years) including transit system improvements, implementation of alternative urban design and research and development of alternative fuels and vehicles.  Currently, the patchwork of funding sources that exist are inadequate to deal with country-wide growing transportation issues, which results in short-term planning initiatives (usually 5 years or less).  Examples of these funds include the Green Municipal Enabling Fund (GMEF), the Green Municipal Investment Fund (GMIF), the Sustainable Development Technology Fund, the Sustainable Highway Infrastructure Fund, and the Strategic Infrastructure Fund.  In addition, the reduction in funding from provinces to municipalities for transit systems has further increased the need for a dedicated funding source at a federal level.

STF could be developed by a multi-stakeholder body and through consultation with appropriate agencies and organizations.  This body could develop eligibility criteria for funding to ensure that resources are appropriately directed toward initiatives that support sustainability in the transportation sector.  Financially, the fund could be built by redirecting the resources that would have been allocated to support transportation projects to a dedicated STF.  Additionally, resources to build the STF could be generated by allocating a portion of the federal gas tax and a portion of road user charges to this fund.  Using these economic instruments to develop the fund may make it virtually cost neutral.

Support for a dedicated funding source has come from the Prime Minister’s Caucus Task Force on Urban Issues, the Transportation Climate Change Table, the Canadian Urban Transit Association, HLB Decision Economics Inc., the Green Budget Coalition and others.  Each of these groups has recommended that funding for areas such as transit capital and operation could be made available through a federal government fund or program.

Urban Growth Planning

Transportation officials in Portland accredit much of their success in reducing GHG emissions from the personal transportation section to their format of city planning, more specifically to the use of urban growth boundaries (UGBs). The lack of sufficient population densities is one of the largest barriers to effective transit systems in Canada today. Current systems of city planning and design prohibit the establishment of urban densities that support effective mass transit systems. Rob MacDonald, contracted to issue a report for the David Suzuki Foundation, believes that a minimum density of 40-50 persons/hectare would be required to make transit systems viable in Canada. This problem is perpetuated through municipal zoning laws that frequently prescribe low-density zoning. Urban design and zoning bylaws dictate both the number of persons per unit area, and ultimately the driving patterns of the entire urban region. Thus, the adoption of UGBs at the municipal level will potentially increase population densities in Canadian urban areas to levels that can better sustain effective and viable transit systems. Additionally, increasing population densities by limiting urban sprawl is necessary if transit, bicycle, and pedestrian modes of transport are going to be looked at as a mechanism for reducing vehicle miles traveled in the personal transportation sector.

Urban growth boundaries could be designed with TDM strategies that integrate development plans with pedestrian, bicycle, and transit routes in order to increase the demand, efficiency, and effectiveness of alternative modes of transport. UGBs must also focus on maximizing other transportation demand management strategies. Municipalities could be encouraged to implement UGBs. Although the federal government cannot directly install UGBs, it is not unprecedented to require that municipalities adopt these initiatives. 

At an economic level, UGBs can potentially save municipalities millions of dollars from reduced infrastructure costs for roadways, utility distribution systems and municipal services (1000 Friends of Oregon, 2002). A Rutgers University case study performed on New Jersey concluded that implementing UGBs would save the taxpayers $1.3 billion in infrastructure costs over 20 years.  It is estimating that the city school districts alone would save $4 million per year in avoided maintenance costs. The Portland State University Center for Urban Studies concluded that building subdivisions adjacent to existing facilities would reduce infrastructure costs by 27%.

Efficient and Effective Transit

Transport Canada commissioned three background studies (released in March 2002) on the state of transit, proposing a national vision for urban transit to 2020 and provided a cost-benefit framework and model that evaluates transit and highway investments.  They were commissioned, in part, due to the increased federal interest in transportation issues. Also, many groups have identified that funding for transit systems from the provinces to municipalities has been greatly reduced over the past decade and municipalities are unable to maintain, improve and expand transit systems.

Part of the reason that transit systems in Canada are under-funded is because comprehensive full cost-benefit analyses that are comparable to highway investment are not being utilized during decision-making.  Additionally, externalities including environmental and social costs and benefits have not traditionally been a part of the decision making process.  These factors have resulted in the transit systems appearing to be less cost effective than highway investment.  HLB (2002) has created a cost-benefit analysis framework that identifies the economic, social and environmental costs and benefits to assist transit authorities and municipalities in investment decision-making. This may also assist federal and provincial governments in appropriately allocating resources.

From an environmental perspective, taking any form of transit over the personal automobile could help to reduce greenhouse gas emissions since the personal automobile generates 40% of all emissions in the transportation sector (Transportation Climate Change Table, 1998).  Similarly, using vehicle distribution analyses in the Cost-Benefit Framework and Model for the Evaluation of Transit and Highway Investments produced by HLB, shows that the majority of emissions are generated from personal use vehicles (comprised of gasoline fueled cars, light-duty pickup trucks,and diesel fueled cars), which represent >95% of the vehicle distribution.  Efficient transit systems are capable of providing substantial emissions reductions by converting drivers to passengers.  On average, a bus replaces approximately 50 cars on the road (at peak travel times) whereas Canadian cars traveling in cities carry 1.3 people on average (Center for Sustainable Transportation, 1998).

From a social perspective, using HLB’s Model, transit is shown to be an essential service to those below the poverty level as 50% of people riding the bus are in this category.  All modes of transit (bus, bus rapid transit, light rail, heavy rail, and commuter rail) provide an important service to those using transit for work and/or medical visits.  Additionally, a significant proportion of riders are willing to change their mode of transportation from the car to transit if investments are made to transit systems that reduce travel time, increase reliability, and improve the levels of service.

From an economic perspective, infrastructure investment in modes of transportation other than the personal automobile is cheaper if measured per kilometer.  It is estimated that the construction costs of an urban expressway is $60 million per kilometer whereas rail is $9 million and bike infrastructure per kilometer is $0.05 million (Center for Sustainable Transportation, 1998). Also, traffic congestion can threaten economic efficiency due to lost working hours.

Efficient transit systems provide a significant component of the solution to reducing greenhouse gas emissions in transportation.  However, currently, there are over 18 million cars and light trucks on the road in Canada (the second highest number of automobiles per capita in the world) (Transportation Climate Change Table, 1998).  Furthermore, automobiles and light trucks produce over 40% of the greenhouse gas emissions that comprised 25% of all greenhouse gases produced in Canada in 1997 by the transportation sector.  This makes transportation the single largest contributor to greenhouse gas emissions in Canada (Transportation Climate Change Table Options Paper, 1999).

Alternative Fuels

Energy security issues, air quality concerns, and the mitigation of global climate change and are all driving the current interest in developing ATFs (Energy Information Administration 1994).

Since different ATFs require different refueling infrastructures, on-board storage mechanisms, and engine and emission control technologies than gasoline or diesel fuels, their widespread introduction will probably require government assistance (Energy Information Administration 1994). Economic tools such as tax exemptions, capital cost subsidies, fuel and emission standards, effective use of federal purchasing power, and support for research, development and demonstration will likely be necessary to promote the production and use of alternative fuels. This is particularly true since many alternative fueled vehicles are perceived as being more costly than their conventionally fuelled counterparts. However, the value of alternative fuels could not be directly compared with gasoline because the cost of gasoline does not reflect the subsidies and tax benefits that are incorporated into the market price, nor does it account for its detrimental affects on the environment. The full cost analysis of converting to efficient ATFs provides both economic and environmentally sustainable sense.

A variety of alternative fuel types have been developed to power the automobile, such as hydrogen, compressed natural gas (CNG) and liquefied natural gas (LNG), liquefied petroleum gas (LPG), methanol, ethanol, electricity, biodiesel, solar energy and P-series. Some vehicles (hybrids) have been developed to provide a slow transition toward the use of alternate fuels. These commonly involve the integrated use of gas and electrical power sources.

Ethanol

Ethanol is a renewable, GHG neutral fuel that can be used now in existing vehicles to provide economically significant emissions reductions. A 10% blend of ethanol (E10) in gasoline can be used in any vehicle and many of the newer vehicles being produced are capable of running on 85% (E85) and 95% blends (E95). The addition of ethanol increases the octane rating of gasoline, which may inadvertently improve fuel efficiency and increase horsepower while reducing engine wear and tear (Climate Change Solutions 2002). Ethanol is a carbon neutral fuel as the biomass from which the ethanol was produced will have absorbed the equivalent amount of CO₂ (during its vegetative growth) to that emitted from its combustion.

The primary barrier to standardizing ethanol’s widespread use is the current inability to produce large enough quantities at an economically competitive rate. However, recent technologies are enabling its production from cellulose or lignocelluloses (from wood fiber) and for producing ethanol from wood waste, all of which combine to greatly reduce the production costs of ethanol.

The production of ethanol from wood wastes in British Columbia alone, could supply half of Canada’s gasoline with 10% ethanol at an economically competitive rate. Since 1974, technological improvements have reduced the production costs of ethanol from wood by approximately $2.20/litre (from $2.50/litre to $0.30/litre) and future production costs are expected to be about $0.22/litre (Natural Resources Canada 2002).

Natural Gas

The utilization of natural gas as a transportation fuel can be incorporated into a regional plan to support national energy security, reduce atmospheric pollution, and act as the bridge to a hydrogen fuel-cell transportation system. Since natural gas is an abundant, domestically available product in Canada, as an ATF it can dramatically reduce dependence on foreign oil. In addition, the exhaust emissions from natural gas vehicles (NGVs) are much lower than those from gasoline vehicles.A typical dedicated NGV can reduce exhaust emissions of carbon monoxide (CO) by 70 percent, non-methane organic gas (NMOG) by 87 percent, oxides of nitrogen (NO_x) by 87 percent and carbon dioxide (CO₂) by almost 20 percent below those of gasoline vehicles (NGVC 2002). Natural gas has low emissions and can be made available through existing distribution. Vehicle storage of natural gas must be in either a compressed gaseous state (CNG) or in a liquefied state (LNG) (AFDC 2002).

Although a natural gas pipeline distribution system is currently well developed to serve the majority of residential and industrial consumers throughout North America, the natural gas refueling infrastructure has not been well established for transportation. In 1999 there were roughly 20,000 natural gas vehicles in Canada, supported by only about 135 public refueling stations that are broadly dispersed (Transport Canada 1999). An expansion of the current distribution system to service more vehicle refueling stations may increase demand for natural gas as an ATF, thus increasing revenue to recover the capital costs incurred from such expansions. Economic gains and GHG emission reductions can also be achieved by recovering and using otherwise lost or flared natural gas sources such as landfill gases. Most vehicles can be easily converted to run on natural gas and since the price of natural gas on average is 30 percent less than gasoline prices, the initial conversion cost could be quickly recovered.

Hydrogen

Although the technical and environmental benefits of using hydrogen as a transportation fuel have long been acknowledged, there is renewed interest now because new technology appears to make it commercially feasible in the near future. Hydrogen gas is currently being integrated into newly designed combustion engines and electric fuel cell vehicles. Hydrogen-powered, fuel cell or hybrid electric cars are expected to have fuel costs comparable to today's gasoline cars. This alternative vehicle technology represents a potential trillion-dollar-a-year market worldwide. When fuelled by pure hydrogen fuel cells are pollution-free - producing only electricity, heat and water (Transport Canada 1999). On-board storage of hydrogen (similar to that of natural gas) can be accomplished by using high-pressure storage tanks that compress the hydrogen, or insulated storage tanks at low temperature and pressure to store it as liquid hydrogen (Energy Information Administration 1994).

Since hydrogen is available domestically, this offers the potential for dramatically reducing the need for imported oil. In addition, it also provides great opportunities to reduce the health costs attributed to urban air pollution and to potentially eliminate GHG emissions from the transportation sector. An appropriate source and method of hydrogen production however, has created much debate. Although it is recommended that hydrogen be initially produced from natural gas, there are a wide variety of resources and methods available for hydrogen production. However, the future success of the fuel cell and the impact on GHG emissions will vary greatly depending on the life cycle of hydrogen production and use.

Social Paradigm Shift in Canada to Promote Sustainable Transportation

Gas is not expensive enough to promote a change in driving behavior and automobile travel remains convenient enough that millions of Canadians still commute alone in their cars on a daily basis. In addition the lack of alternatives gives the public no incentive to change their driving habits. Therefore, a series of incentives initiated by the Federal Government are necessary to promote an attitude and behavioral shift. The incentives that are necessary to promote this attitude shift can be generalized into two main approaches:

1. decreasing the convenience of the personal automobile by promoting Transportation Demand Management (TDM) strategies and the use of mass transit; and,
2. diminishing the desirability of the personal automobile through graphic, health-based advertising.

Decreasing Convenience

Promoting TDM strategies and making alternative modes of transportation increasingly favorable may help reduce the amount of personal automobile use by making driving less convenient. TDM involves a variety of measures that work together to reduce the amount of vehicles on the road while maximizing the overall movement of people.  The overall goal of implementing TDM strategies is to promote environmentally sustainable transportation and therefore can be applied to any city, especially in city centers where there are a large number of commuters including Vancouver, Toronto, Ottawa, and Montreal.  TDM strategies can be implemented relatively cost neutral, and are an effective solution for reducing GHG’s in the personal transportation sector.

Since people will always require a means of transportation it is simply not enough to make driving inconvenient.  Reliable and feasible alternatives must be offered and these alternatives must be cheaper or at minimum comparatively priced with the use of the personal automobile.  In addition to the implementation of biking, ride-share and telecommuting programs, increasing the availability and convenience of transit systems should also help to get people out of their cars. 

Transit would be an effective alternative to driving, however the demand needs to be created in order to make transit both cost and energy efficient.  Creating a demand for transit involves implementing a variety of mechanisms and changing people’s current perceptions of transit systems. According to a 2002 Canadian public opinion poll, Canadian citizens feel that current public transit systems are slow, unreliable, inconvenient, dirty and unsafe (Public Policy Forum, 2002).  These attitudes need to be changed before Canadians are likely to accept transit as a viable option to the personal automobile, and the way to do this is by increasing transit’s desirability through advertisement.

Decreasing Desirability

Advertising the health consequences associated with vehicle pollution would be an effective way to achieve an attitude shift amongst Canadians.  This would be similar to the Anti-Smoking Campaign that Health Canada is currently running.  Driving could be made undesirable through advertising graphic images and explicit wording.  If people are visually exposed to the real costs and damages caused by driving related emissions they may begin to consider the consequences of their actions and choices. 

The serious implications that global climate change is likely to have on Canadians are likely to be made public.  Global climate change could have the potential to have direct results on Canadians by affecting their physical and mental health and an indirect result by damaging Canada’s social structure.  Federal and Provincial government spending will likely have to increase to cover both the medical costs (i.e. asthma medication and respiratory surgeries) and social costs of having a less productive society (i.e. increased sick days and less full time employees). Canadians should be aware of these details because it will be their health that may be compromised and their tax dollars spent.  However, much of this could be avoided if they changed their behaviors and attitudes towards sustainable modes of transportation.

As is typical with many large-scale issues, people often take a ‘freeloader’ attitude, and typically feel that their individual efforts won’t make a large enough difference to bother.  This attitude can be changed through advertising campaigns similar to stop smoking campaigns, that help convince people of the dangers and impacts that driving a car have on the environment, their health and the health of their loved ones.

Resources and References

1000 Friends of Oregon. 2002. Questions and Answers About Oregon’s Land Use Program.

AFDC - Alternative Fuels Data Center, 2002. Alternative Fuels

Brand, Sam. 2002. Personal Communication. Ministry of Transportation and Highways. Victoria, BC.

Center for Sustainable Transportation. 1998. Inquiries for a Sustainable Future: A Decision Making Approach to the Study of Selected Canadian Issues.

Climate Change Solutions, 2002. Alternative fuels: Esther switches to Ethanol.

Energy Information Administration, 1994. Alternatives to Traditional Transportation Fuels: An Overview.

Enga, Fred. June 26, 2002. Climate Change: Policy Perspectives and Practical Solutions. Gaian Bio Energy. Air Waste Management Association Vancouver Island Chapter. 2002 Technical Conference. Victoria, BC.

Environment Canada. 2002. A Discussion Paper on Canada’s Contribution to Addressing Climate Change.  Government of Canada.

HLB. 2002. Cost-benefit Framework and Model for the Evaluation of Transit and Highway Investments.  Final Report.  HLB Decision Economics Inc. in Association with ICF Consulting and PBConsult, Reference 6688.

Natural Resources Canada, 2002. Ethanol the "Green Gasoline" Renewable Energy.

Canmet Energy Technology Center (CETC).

NGVC - The Natural Gas Vehicle Coalition.

Ouellete, Patric. June 26, 2002. Climate Change: Policy Perspectives and Practical Solutions. Westport Innovations Presentation. Air Waste Management Association Vancouver Island Chapter. 2002 Technical Conference. Victoria, BC.

Prime Minister's Caucus Task Force on Urban Issues (PMCTF). 2002. Canada's Urban Strategy: A Vision for the 21st Century. Interim Report, April 2002.  Chair Judy Sgro.

Public Policy Forum. 2002.  Outcomes from the Stakeholder Session March 12, 2002: The Citizens’ Forums on Personal Transportation, Energy Efficiency and Environment Impacts.  

Transport Canada. 1999. Alternative Fuels Market Research Study Annexes To The Final Report.

Transportation Climate Change Table (1999). Transportation and Climate Change: Options for Action. November 1999.

Transportation Climate Change Table. 1998. Foundation Paper on Climate Change: Transportation Sector. National Climate Change Process (NCCP).

Transportation Issue Table for the National Climate Change Process. July 1999. "Alternative and Future Fuels and Energy Sources for Road Vehicles"

Alexandra Link and Chris Ling
Published June 18, 2007

Case Summary

There is a movement towards strengthening the local food system on Vancouver Island. This case study addresses a key component of the local food system: food distribution by local agricultural producers. In particular, it concentrates on farmers’ markets, an important aspect of food distribution. 

Given the links between local food systems and sustainability and the desired role of farmers’ markets in local food systems, studying farmers’ markets can offer insights into the barriers and opportunities that exist for strengthening local food systems and achieving sustainability outcomes. Though it is necessary to be realistic about the ability of farmers’ markets to alter the industrial food system, farmers’ markets have the potential to be instrumental in supporting the local food system.

The study considers the creation of a farmers' market in the Royal Oak area of Saanich, BC. However, before implementing the market, it is advised that further research and consultation be undertaken with respect to concerns such as location, scheduling, products offered, features, and types of marketing. As well, key issues, such as CRD health regulations, accessibility and inclusion of low-income consumers, and market standards regarding local and organic products, must be addressed by related stakeholders, partners, and the market committee.

Sustainable Development Characteristics

Farmers’ markets, through their potential to sustain and support the local food system, can contribute to sustainability goals. This does not mean that local food systems are inherently more sustainable than industrial food systems, but that they are more apt to acknowledge the importance of relying on locally available resources and recognizing interdependencies between local producers and consumers. This can then lead to more sustainable practices.

Local food system practices such as farmers’ markets are directly tied to place and time as well as social, economical, ethical and physical systems within which they are located. The impacts of these practices cannot be distanced and externalized in the same manner that they often are in the long-distance, industrial food system. Local food practices adapt to fit natural parameters and constraints, which are perceived as limits to be respected, not obstacles to be overcome (Kloppenburg et al., 1996). In industrial food systems, natural parameters are often not even perceived due to the wide distances between causes and effects.

Local sustainability is directly related to contextual embeddedness. For instance, Kloppenburg et al. (1996) explain that a community, which depends upon its community members, neighbouring lands, and native species to provide for most of its needs has to make sure the resources it uses to satisfy those needs are maintained in a healthy state. In this situation, impacts related to food practices, such as soil erosion and water consumption, are issues of immediate concern. Thus farmers’ markets, through their contextual embeddedness, have more potential to instigate sustainable practices within the local area where they occur than do industrial food systems.

Farmers’ markets encourage local food security through their promotion and support of local food production. The more food that is grown on Vancouver Island, the more the residents of the island will be buffered in the event of disruptions of long distance food supply such as weather events or political instabilities. Local food production and distribution can assist in fostering food security for the local region.

Through reducing the distance that food is transported, farmers’ markets decrease “food miles”. The distance food takes to travel is directly related to the amount of fossil fuels required to get it there. Since fossil fuels cause pollution and directly impact climate change (Hegrl et al., 2006), reducing the distance that food travels translates into environmental (and related socio-economic) benefits.

In the Greater Victoria Capital Region, there is a high proportion of organic producers compared to other regions in BC (MacNair, 2004). This benefits the region since organic practices have various sustainability benefits. One of these benefits is supporting the land on which food is produced; for example, though prevention of soil erosion (Arden-Clarke & Hodges, 1988).

These sustainability benefits are realized to a great extent in the Greater Victoria Capital Region due to the fact that it comprises a large number of organic producers, with 25 certified organic producers in total (Ministry of Water, Land and Air Protection, 1999, as cited in MacNair, 2004). The region has the second highest proportion of certified organic producers than any other region in British Columbia (next to the Okanagan-Similkameen Regional District), with this number increasing at a rapid rate (MacNair, 2004). This trend is exemplified in the present study, whereby 55% of producers employ organic practices (although not necessarily certified organic). Thus, the emphasis by local producers on Vancouver Island on organic practices contributes to sustainability benefits for the region.

Farmers’ markets can encourage human wellbeing through various means. One way they can accomplish this is through educating consumers about health. The type of food that is offered at farmers’ markets can also sustain human health. For instance, farmers’ markets often feature organic foods. Organic produce has been found to contain higher levels of antioxidants, substances attributed to cancer prevention in humans, than non-organic foods (Benbrook, 2005). Locally-produced and sold foods also have health benefits. When local produce is purchased locally, it is likely to be consumed much sooner after harvest than non-local produce and, therefore, have higher nutritional value when consumed (MacNair, 2004).

On a broader level, farmers’ markets can support the health of communities through emphasizing a ‘healthy-community’ approach in their operations. With this approach, decisions are made with the aim of improving the wellbeing of the community as a whole.

This community-health approach extends the notion of health beyond individuals to an interconnected network of people who together help to support the wellbeing of the entire community. A focus on community health can have broader-reaching and longer lasting benefits for people’s wellness than simply concentrating on individuals because of the benefits that arise from having the support of an entire network of people.

On both a community and individual scale, farmers’ markets can assist in sustaining human health and wellbeing. This occurs though various means including health-related education that can occur during producer-consumer interactions, healthy products offered at the market, and the ability of the market to have a ‘healthy-community’ approach in its operations.

Critical Success Factors

The continued success of local farming in the Royal Oak area of Saanich requires changes and improvements in the following:

1. Advertising, sales, and education: improving these aspects will assist producers in raising awareness about their farm operation and products. It will also enable consumers to better locate products that they are interested in and to understand production practices of producers (such as organic practices and local production). This has the potential to influence consumers' purchasing decisions.
2. Product and production method: suggestions by producers include increasing efficiencies in production methods, adapting to meet consumer demands, and adopting practices that are sustainable. These choices have the potential of increasing sales for producers as customers’ needs are better addressed. They may also result in greater satisfaction for consumers as they are able to purchase products that meet their demands.
3. Construction and labour: Improved farm infrastructure allows producers to run farm operations more effectively and better display products to customers on-site, thus keeping down costs and improving product marketing. Such practices will also benefit consumers through lower prices. Other concerns include recruiting, keeping, and adequately paying labour power. Adequate labour is necessary to meet production requirements for consumer demands while maintaining product quality standards.

The success of farmers' markets in the area would rely on the following:

1. Participation. Producers in this study suggest that farmer’s markets are ideal for producers who:
   1. Cannot or do not want to exclusively sell products from their farm stand;
   2. Are new producers or are new at selling their products;
   3. Are small-scale producers, but have enough production to sell their products;
   4. Prefer selling products direct to the consumer;
   5. Are interested in educating consumers about local food production, organics, and general farm operations;
   6. Are able to take time away from their farm to be at a market;
   7. Can afford market stall fees;
   8. Would benefit from using the market as a means to advertise their farm operation;
   9. Are confident they will be able to make enough profit at the market to cover the input costs of participating in the market (such as labour, time factors such as driving time, and market stall fees);
   10. Can make the commitment to attend a market on a regular basis; and,
   11. Enjoy interacting with customers.
2. Organization. Producers discuss several factors to consider with respect to organizing a farmer’s market. These include:
   1. Funding for the market;
   2. A manager to run the market;
   3. Market volunteers;
   4. Support from other farmers in organizing the market;
   5. Formation of community committees;
   6. Land/site acquisition for a market;
   7. A critical mass of producers to participate in the market; and,
   8. Standards of quality control for market products.
3. Location. The most important aspects of location according to producers include:
   1. Adequate parking for customers;
   2. Facilities (such as bathrooms);
   3. Location in a busy/central area;
   4. Access to the market for customers (including public transportation, cycling and pedestrian access);
   5. Location away from competition/Conflict of interest with nearby business (such as grocery stores and country markets);
   6. Aesthetic beauty/ambience of site;
   7. Location near traffic or “lines of flow”;
   8. Location on well-known site; and,
   9. Visibility of market to potential customers.
4. Market scheduling. If the proposed market is held during the weekend, participants recommend it be in the morning until mid-day or early afternoon. If it is to be held during the weekday, participants recommend it be in the afternoon or evening. Overall, participants prefer to have the market four times a month on a regularly scheduled day during the summer months (such as May-October). One exception to this is if a pocket market were to be set up, which could be held all day for the entire year.
5. Products offered. Producers wish to sell a variety of fruit, vegetables, animal products, and other items at the proposed market. All producers are in favour of having farm produce and prepared food at the market. Producers mention limiting the number of craftspeople, requiring standards, and a local emphasis. Producers have differing opinions on organics at the market: an organic market would be elitist; non-organic products would compete unfairly with organic products.
6. Market features. All producers are in favour of having the following market features: activities for children; parking facilities; public transportation; and, food demonstrations. The majority of producers believe that music would be a beneficial feature, provided that it supports the market atmosphere.
7. Market type. There is conjecture by producers regarding market type. Many producers appear to be unsure about how a cooperative market would operate. This could be due to the fact that there are few, if any, examples of cooperative markets in the local area. Individual stalls are favoured because producers believe they are easiest to manage and allow for a more direct relationship between producers and consumers.

For success in a wider sustainable community development context the market organization should:

1. Foster accessibility and inclusion. The market should be accessible for and inclusive of low income consumers and marginalized groups. "Food policy councils" and related initiatives are being developed in a variety of cities across Canada including Toronto, Vancouver, and Victoria. These initiatives work to connect food system issues to other key factors affecting local communities such as economic development and nutrition and public health (Dahlberg, 1993, as cited in Kloppenburg et al., 1996; MacNair, 2004; The Toronto Food Policy Council, 1993, as cited in Kloppenburg et al., 1996). In the Greater Victoria Region, the Capital Region Food and Agriculture Initiatives Roundtable has been established to deal with such issues.
2. Consult with stakeholders. Consultation with local businesses, community members, other farmers’ markets, producers, consumers, and other relevant stakeholders is recommended in order to make the market a success. These parties may offer a wealth of advice, often based on practical experience in the local area. Colihan and Chorney (2004) mention the following issues in which stakeholders may offer assistance: training and mentoring in marketing; merchandising; food safety; bookkeeping; food processing; personnel management; legal issues; team building; and, community development. Consultation also ensures that relationships with the market are positive, thus decreasing potential for conflicts in the future. Consultation allows for relationship building amongst affected parties.
3. Consumer preferences. Consumers are one of the most important factors in a farmers’ market. For instance, consumers’ preference for food choice may act as a deterrent to farmers’ market patronage. Understanding consumer preferences may allow the proposed farmers’ market to better address, and find solutions to meeting these needs, such as  promoting the development of regional palates based on "moving diets" of locally and seasonally available food  (as suggested by Kloppenburg et al., 1996).
4. Form partnerships. Partnerships between any farmers' market and groups such as municipalities, service clubs, chambers of commerce, community organizations, local agriculture groups, business improvement associations, government planning departments, economic development agencies, consumer groups, and non-profit organizations, can provide significant advantages to a market in the form of funding, expertise, public support, and market space (Colihan and Chorney, 2004). For example, incorporating the market into the Royal Oak community development plan would potentially enable the market to be considered in a range of different planning and fiscal considerations. As well, Lifecycles Project Society is currently researching the pocket market concept and would be a valuable resource regarding providing expertise in this regard.

Community Contact Information

Alexandra Link, M.A., B.Sc.
Victoria, British Columbia, Canada
Email: alixlink@yahoo.com

What Didn’t Work?

• Political support for the Industrial Food Model: Local food system movements are embedded in, and constrained by, the rules, interests and policies of local, national, and international governments. Governmental influences on local food systems include the creation of municipal bylaws related to agricultural land use, provincial changes to land designations such as land included within the Agricultural Land Reserve in BC, and food production and export decisions made by international governments that affect the purchasing choices of local consumers.

• Cultural habits: Currently, consumers have a high degree of choice in selecting food products and are able to purchase food from anywhere in the world. They are also accustomed to spending a small amount of their total income on food products. It is difficult to overcome these cultural habits and encourage consumers to accept local food constraints, such as limited options in the wintertime and spending more of their household income on local food products.

• Urbanization: Producers in the Greater Victoria Capital Region could have difficulties due to their close proximity to the urban core. Such constraints include urban development pressures and the high cost of land. For instance, the cost of property in the Victoria CRD has doubled in the past five years (Hill, 2007). High land costs can make it very difficult to purchase land for local farming purposes. Urban constraints such as high land costs can pose significant obstacles for local food practitioners in the Victoria CRD.

• Commodification of relationships: Farmers’ markets may actually mimic the industrial system through similar commodification of food and commodified relations between consumers and producers. It is likely that various motivations exist simultaneously and possibly in a contradictive way, among producers and within single individuals. Hinrichs (2000) discusses how there is a tension in the way producers perceive farmers’ markets, a friction between contextual embeddedness and commodification.

• Lack of accessibility for less affluent consumers and producers: Depending on their emphasis and management, farmers’ markets can be difficult to access for less affluent consumers. Farmers’ markets can tend toward emphasizing expensive specialty goods, exclusive products, and high-priced niche market foods, described as ‘yuppie chow’ by Feagan et al. (2004). These products are difficult to purchase by those with less disposable income. Producers may also face accessibility challenges when selling their products though a farmers’ market. Many of these challenges are impacted by those who manage the market. For instance, if market stall fees are set high and regulations prohibit producers from sharing stalls, this could deter lower-income producers from participating.

• Minimal public understanding of local food systems: Although participation by both consumers and producers in farmers’ markets may symbolize broader support for the local food movement, Feagan et al. (2004) believe that there is a gap regarding the conceptual leap that needs to be taken with respect to consumer food choices being a direct response to broader sustainability objectives. Ideally, when the public interacts directly with producers, consumers will become more aware of these implications, such as by understanding the beneficial effects of growing local food on their community. However, the average farmers’ market consumer may not understand the broader context of the local food movement and sustainability implications as these issues may be complex to understand or obscured by the distances created by the industrial food system.

• Food security: Although increasing local production and supply of food would protect Vancouver Island from disruptions to outside transportation routes, a food system that depends exclusively on local sources without outside connections is vulnerable to political, social, and environmental events that could wipe out the resident food supply. Examples of such happenings include pest outbreaks, natural disasters, and quarantines. Greater reliance on local food alone can lead to decreased food security if there is not a connection to outside production sources.

• Exclusionary tendencies: Like any movement, the local food movement has the potential to become overly exclusionary and dogmatic. As Hinrichs (2003, p. 37) explains, “defensive food system localization tends to stress the homogeneity and coherence of “local”, in patriotic opposition to heterogeneous and destabilizing outside forces,… localization becomes elitist and reactionary, appealing to narrow nativist sentiments.” Thus, although the local food movement has much to offer, it must be wary of extremism and be inclusive of other perspectives and points of view.

Financial Costs and Funding Sources

Overhead and management vary in complexity based on the value of the real estate upon which they locate and the size of the market (Colihan & Chorney, 2004). Farmers' markets can be located in permanent structures, sheds, or open-air at a wide range of locations (Colihan & Chorney, 2004). There are various forms of farmers’ markets including farm produce, craft, organic, and any combination of these, as well as different types of marketing, including co-operative tables, individual stalls, and marketing board ownership. In many cases, public funding has helped to establish the markets, and in a large number of cases, public funding, in one form or another, supports their operation (Lapping, 2004).

Research Analysis

Supporting the Local Economy

Farmers’ markets support the local economy in many ways. One of these, is the farmers’ markets’ flexibility to respond to consumer demands. For instance, farmers' markets are able to cater to niche and specialty markets such as the needs of senior citizens and ethnic communities. The direct interaction that local producers have with their customers means they are able to immediately determine and respond to consumers’ needs.

Farmers’ markets also support the local economy through what Lapping (2004) describes as the ‘multiplier effect.’ This phenomenon occurs when money spent at farmers’ markets is circulated in the community, leading to multiplying effects within the local economy. For example, when farmers’ markets are located next to local businesses, there are often spillovers to the local businesses from market patrons (Lapping, 2004). As such, the establishment of a farmers’ market can result in increased economic growth in the area in which it is located.

Formation of Social Capital

The interactions between producers and consumers at farmers’ markets often go beyond economic capital gains and can lead to ‘social capital’ formation (Hinrichs, 2000; Lapping, 2004). Social capital is based on the premise that social networks have value. It refers to the “collective value of all social networks and the inclinations that arise from these networks to do things for each other” (Putnam, 2000).  The capacity to come together creates a social space where community, friendships and social networking are fostered. This social space was important for producers in the study.

Through direct social interaction, farmers’ markets aid in re-creating linkages between producers and consumers. They “shrink both the physical food chain and the sociocultural distances between the two” (Feagan et al., 2004). The social networks formed as a result of direct interactions at farmers’ markets are thus essential for personal wellbeing and the formation of social capital.

Shaping the Food System

Local production and participation in farmers’ markets can influence the food system in broader ways than building social and economic capital. One way that farmers’ markets shape food systems is by fostering free enterprise and ethically-grounded economic behaviour.

Farmers’ markets can be a way of supporting the economic viability of producers who wish to operate outside of the industrial food system (Lapping, 2004). By providing producers with opportunities to sell their goods locally, farmers’ markets enable them to operate in a way they consider ethical, while opening a path for others to do so as well.

The context of ‘food democracy’ is useful for understanding this influence. Food democracy is the idea that people “can and should be actively participating in shaping the food system, rather than remaining passive as spectators on the sidelines …[and] having power to determine agro-food policies and practices locally, regionally, nationally, and globally” (Hassanein, 2003, p. 79). Although not explicitly labelled as such by producers in the study, many of their comments appeared to express a desire to shape the direction of the food system.

Through supporting fostering free enterprise and ethically-grounded economic behaviour, promoting the economic viability of producers who wish to operate outside of the industrial food system, and fostering active attempts to create change in the food system, local production and participation in farmers’ markets can shape the food system.

Enhancing Consumer Understanding of Local Food

As discussed in the previous section, local producers often influence and support the local food system. One of the ways this occurs is through educating consumers. Several producers in this study expressed the desire to educate people about how food is produced on the farm and about the sustainability benefits of local food production. This direct educational exchange has the potential to influence how the public understands food systems, makes consumer choices, and understands the importance of local food. This has clear implications for sustainability.

Detailed Background Case Description

Introduction

There is a movement towards strengthening the local food network on Vancouver Island. The Economic Blueprint, an evaluation of the economic potential of the Capital Region, has listed encouraging the agricultural sector as one of its key recommendations, including supporting the purchase of local farm products (Thornton, 2003). The Capital Region Food & Agriculture Initiatives Roundtable (2004) states, “The most pressing concern in relation to food security is the need to increase the amount of food being grown locally on Vancouver Island.” There is also an increasing interest in, and demand for, regional food by consumers in the Capital Region (MacNair, 2004).

Geographical context

The Royal Oak neighbourhood is located on Vancouver Island in British Columbia, Canada. It is in Saanich West, in the District of Saanich on the Saanich Peninsula, immediately north of the municipalities of Victoria and Oak Bay.

The District of Saanich was incorporated on March 1, 1906 (The Corporation of the District of Saanich, 2006). With an area of 11,179 hectares, it is the largest of the core municipalities making up Greater Victoria (The Corporation of the District of Saanich, 2006).

Saanich has become a major residential area while also maintaining an important agricultural base. Half of its residency is urban and half is rural and agricultural (The Corporation of the District of Saanich, 2006). With a population of 103,654, it is the most inhabited municipality on Vancouver Island and the seventh most populated in the province (Statistics Canada, 2002).

The Royal Oak neighbourhood is divided into three main areas: Broadmead, Viewmont, and Falaise (see Figure 2). The Royal Oak area is represented by three community associations: the Broadmead Area Resident’s Association, the Falaise Crescent Community Association, and the Royal Oak Community Association. The population of Royal Oak is growing substantially: 3,445 people in 1986 (The Corporation of the District of Saanich, 2003) to 17,490 people in 2001 (Government of British Columbia, 2001).

Agriculture has traditionally played a key role in Royal Oak’s economy, has added to the local food supply, and has provided rural viewscapes (The Corporation of the District of Saanich, 2003).  However, recent suburban development has displaced agricultural uses and fragmented agricultural lands.

Local Food

An alternative to the industrial food system is the “local” food movement. Local food is more than the name implies, which is food grown, caught or processed in its regional area (Burros, 2006). According to community nutritionist Gail Feenstra (1997, p. 28, as cited in Hinrichs, 2000), local food systems “are rooted in particular places, aim to be economically viable for farmers and consumers, use ecologically sound production and distribution practices, and enhance social equity and democracy for all members of the community.” This system incorporates food production, processing, distribution and consumption with the aim of increasing the environmental, nutritional, economic, and social wellbeing of a specific locale (Wilkins & Eames-Sheavly, n.d.)

There are four main aspects that distinguish local food systems from the industrialized food system (Wilkins & Eames-Sheavly, n.d.).

1. Food security. Local food security refers to food access within a community context, with a particular focus on low-income households. In a local food system, food access is increased due to the growth and sale of grown food within the community. On the other hand, in an industrialized food system, food consumption is highly dependent upon food grown across the world.
2. Proximity describes the distance between different parts of the food system. Proximity is increased in local food systems where producers and consumers have a much higher potential for interaction than in the industrialized food system.
3. Self-reliance describes to what extent a community is able to meet its own food requirements. In the local food system, food is grown for local needs and not for export as in global food systems. This ensures that the community is able to support its own food requirements.
4. Sustainability refers to following food system practices that respect the ability of future generations to meet their food requirements. This includes environmental protection, profitability, ethical treatment of food system workers and other living beings, and community development. Local food systems meet these criterion to a much greater extent than industrial food systems, due in part to having to deal with direct consequences of food system decisions.

Local food systems include an array of market arrangements including roadside farm stands, u-pick operations, community-supported agriculture, farmers markets, etcetera (Hinrichs, 2000). They are explicitly and beneficially linked to the needs and interest of local households, neighbourhoods, and communities, such direct agricultural markets favour locality and seasonality over distance and durability (Friedman, 1993). Tailoring food production and its consumption to local conditions is believed to be a key factor in developing sustainable food systems (Cavallaro & Dansero, 1998, as cited in Feagan et al, 2004; Feenstra, 1997; Halweil, 2002).

According to the Greater Victoria Capital Region Food & Agricultural Initiatives Roundtable, there is an increasing interest in, and demand for, regional food by consumers (MacNair, 2004). One way to meet this demand is to support local producers in their production of food and in their distribution of their products. A key means is the establishment of farmers’ markets. This research will focus on farmers’ markets and related marketing aspects of these markets.

Re-Emergence of Farmers’ Markets

There has been a dramatic increase in farmers’ markets in Britain and North America in the last 10-20 years (Connell et al., 2006; Hinrichs, 2000; Sommer et al., 1980). According to Colihan and Chorney (2004), the province of British Columbia (BC) in Canada is a high-growth region for farmers’ markets. In BC, there are about 100 known markets, up from 60 known markets, in 2000 (Connell et al., 2006).  Several communities, including Vancouver and Victoria, have multi-market locations (Colihan & Chorney, 2004). There are various explanations for this renewed interest in farmers’ markets. These include:

1. Lower prices to consumers (Sommer et al.,1980);

2. Higher profits for local growers and a desire to support them (Colihan & Chorney, 2004; Hinrichs, 2000; Sommer et al., 1980);

3. Consumer demands outside of the dominant retailing food environment (Baber & Frongillo, 2003; Hinrichs, 2000; Holloway & Kneafsey, 2000 as cited in Feagan et al., 2004);

4. An exciting shopping experience for consumers (Sommer et al., 1980);

5. A means to help revitalize urban areas (Baber & Frongillo, 2003; Colihan & Chorney, 2004; Sommer et al., 1980);

6. An increased interest in food quality by consumers (Baber & Frongillo, 2003; Colihan & Chorney, 2004; Connell et al., 2006; Hinrichs, 2000; Sommer et al., 1980);

7. A growing interest in fresh produce by consumers (Colihan & Chorney, 2004; Lockeretz, 1986 as cited in Hinrichs, 2000);

8. Demand for local products (Colihan & Chorney, 2004; Connell et al., 2006);

9. The social atmosphere markets provide (Baber & Frongillo, 2003); and,

10. The opportunity for urban and rural people to come together (Sommer et al., 1980).

One means of sustaining the local food system is the creation of farmers’ markets, as farmers’ markets strengthen the connection between local consumers and local producers. They represent a structured organizational form of larger scale than individual roadside stands or u-pick operations.

Farmers’ markets can range from relatively simple structures with a straightforward purpose, to far larger, complex organizations with a broad public mandate and range of customer, vendors and community stakeholders (Colihan & Chorney, 2004). Lyson et al. (1995, p.109, as cited in Hinrichs et al., 2004) state that “as a social structure linking the formal and informal economies, farmers’ markets are organizationally flexible. They accommodate diverse personal motivations, products and organizational strategies. They allow producers to enter and leave easily, while enduring as an organization.”

There are a number of common characteristics of farmers’ markets. These include:

1. high levels of repeat patronage by consumers, patronage by those who live in or near communities with established farmers’ markets;

2. overwhelming participation by small-scale farmers who report that sales at farmers’ markets consist a significant share of agricultural income;

3. prices close to or slightly above those found in nearby supermarkets;

4. substantial spillovers to local businesses from patrons of farmers’ markets; and,

5. the overwhelming importance noted by patrons on direct social interaction with producers (Brown, 2002 as cited in Lapping, 2004).

Vancouver Island

Vancouver Island is an ideal location to produce food locally. There is available land protected by the Agricultural Land Reserve (ALR), moderate climatic conditions year-round, and a good supply of quality of water (Geggie, 2006; Thornton, 2003). The province has a dynamic small farm sector, mild climate, and a community that has an interest in fresh food (Colihan & Chorney, 2004).

This study occurred in the Greater Victoria Capital Regional District (GVCRD). The GVCRD agriculture sector has a competitive advantage due to its proximity to a large urban population, which creates a varied market for agricultural crops (Thornton, 2003). There is also a knowledgeable farming community, interest by young people in farming, as well as considerable training and support programs for new farmers (Geggie, 2006). Currently in Greater Victoria, 13,000 hectares (31,421 acres) of farmland is under cultivation on approximately 750 farms (Downtown Victoria Business Association, 2007).

Despite having a dedicated farming sector, the percentage of food grown and consumed on Vancouver Island has been steadily declining (Geggie, 2006). Whilst fifty years ago, over 90% of the food eaten on the island was produced locally, currently this figure is at less than 10% (MacNair, 2004). There are several reasons for this decline. These include lack of access to land for farming due to the high price of land, uncertain viability of farming to generate a sufficient income, questionable consumer willingness and ability to pay a price that is reflective of the real costs of local production, seasonality of food and climatic limitations, and limited diversity and supply of locally produced foods in the winter (Geggie, 2006; MacNair, 2004).

A significant limitation to locally produced foods is the decrease in available agricultural land. The Greater Victoria Capital Region is rapidly losing its viable agricultural land. In 1974, the Provincial Agricultural Land Reserve (ALR) was created to preserve high quality agricultural lands from development. The Land Commission Act requires that lands within the ALR be used/ retained for agricultural purposes and that alterations to land use, including the subdivision of land, must be supported by the municipality and approved by the Land Commission (The Corporation of the District of Saanich, 2003). Despite this mandate, nearly 25,000 hectares of agricultural land was removed from the ALR between 1974 and 1999. At this rate, Vancouver Island has had the highest (regional) percentage loss of ALR land in the Province of BC (MacNair, 2002). Conversion of valuable farmland on Vancouver Island to non-agricultural uses has incited questions about farm, community, and regional sustainability under such change (McNair, 2004).

Despite these limitations, there is a growing movement on Vancouver Island of strengthening the local food network. For instance, the Capital Region Food & Agriculture Initiatives Roundtable (MacNair, 2004) states, “The most pressing concern in relation to food security is the need to increase the amount of food being grown locally on Vancouver Island.” The popularity of local food among consumers in the Capital Region has also grown substantially- in Greater Victoria, farmers’ markets increased from one -Moss Street Market- in 1992 to 10 in 2004 (MacNair, 2004). Farmers’ markets provide added value in the form of fresh, healthier food in an environment that fosters social interactions, community, and entertainment. These attributes enable farmers’ markets to compete with low price food alternatives, manifest in the industrial food system, that currently have a dominant hold on the market.

Current Production Practices, Forms of Sales, and Marketing Approaches of Producers

Producers are currently producing and selling a wide variety of fruit, vegetables, and animal products. The majority of producers prefer to market their products directly to the consumer. Regarding income, the majority of producers make less than 100% of their annual income from the sale of their items, and several producers have income sources other than that of their product sales.

Attitudes of producers to market characteristics

The main criteria for the selection of market location are:

1. General access to the market for customers
2. Public transit access for customers
3. Pedestrian access for customers
4. Bicycle access for customers
5. Aesthetic beauty/ambience of site
6. Customer parking
7. Market located near traffic or “lines of flow”
8. Market located on well-known site
9. Market visible to potential customers
10. Bathrooms at market
11. Wheelchair access for customers
12. Adequate space at market
13. Market located near large urban community
14. Adequate parking for vendors

Strategic Questions

1. Local emphasis. Having local products at the market is important for many producers, specifically with respect to crafts, produce, and food demonstrations. There is a strong demand by customers in Greater Victoria for local products. However there are many systemic challenges faced by local producers such as a lack of governmental support for local agriculture.
2. Health regulations. The current lack of education and level of awareness on behalf of both producers and consumers regarding health regulations at farmers’ markets leads to unnecessary barriers and fears as well as decreased availability of certain products and lowered sales.
3. Pocket market concept. The idea of having a pocket market in Royal Oak was suggested by several producers. A pocket market differs from a traditional farmers’ market in that it can have fewer vendors and can be operated on a permanent basis (such as daily on weekdays) at a fixed location (Geggie & Fuge, 2006).
4. Organics. Organics is a prevalent theme throughout the interviews and comments regarding organics span a variety of issues such as:
   1. growing demand by customer on Vancouver Island for organics,
   2. the desire by producers to incorporate organic practices into their operations,
   3. the difficulty of implementing organic certification,
   4. pricing for organics,
   5. difficulties in understanding organic terminology, and
   6. competition of organic with non-organic products.

Organic issues are complicated and are influenced by several factors including government policies, education priorities, and consumer preferences. These issues are beyond the scope of this study. However, the lack of understanding by producers and consumers about organic issues leads to barriers regarding practical implementation of organic practices on the farm, comprehension of organic product labelling by the public, and pricing of organics at farmers’ markets.

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