Local Development and the Social Economy in Quebec

This is a paper by Yvon Poirier, Chair of CCEDNet’s International Committee, on local development and the social economy in Québec that was published as part of an ebook on international approaches to local development by LDNet. LDNet is an European organization set up as a reference centre for the new European Union Community-Led Local Development program for the 2014-2020 period.

1. Introduction

As in Europe and other parts of the world, local development, community economic development, social economy and other related initiatives have grown in North America. This chapter will focus on one specific experience, the Centre local de développement (CLD) in Québec province. The law creating this province-wide programme was adopted by the Québec province Assemblée Nationale in December 1997 and the CLDs started their activities on April 1st 1998. The CLDs are mainly focused on supporting entrepreneurship, including social economy enterprises. Since they now have a 15-year experience, this paper is an attempt to share knowledge about the CLDs with people outside Québec.

Section 2 of this paper begins by providing the general background to local development in Canada and the province of Québec. It then introduces local socio-economic development in Quebec and, more specifically, the place of the social economy in local development. Section 3 presents the CLDs and the way they link social economy and local development: their creation; operation and funding; and a case study (Québec City CLD). Section 4 discusses local development at work, including the findings and recommendations of research into the operation of the CLDs. Finally, Section 5, brings out the main lessons and challenges.

2. Background: Canada, Québec and the regional/local level context

Canada is a federation with 10 provinces and two Northern territories (majority Inuit people). The total population of Canada was 34,475,000 in May 2011 (the last census). Out of this, 7.9 million live in Québec province, making it the second largest province of Canada after Ontario with 12.5 million.

A defining characteristic of Québec is that 80% of the Québec province population is francophone. This is the only province in Canada with a majority of French speaking inhabitants. The origins of this population go back to 1608 when France created a colony called New France. Even after the British conquered the colony in 1759, the French speaking population stayed and has been able to survive as a French speaking society, making it a small minority in North America. French speaking Canadians also live in other provinces but they represent on average less than 5% of the total population, except for New-Brunswick (40%).

The Canadian Constitution is fairly decentralized. For example, health and education are provincial responsibilities. Municipalities are also under the jurisdiction of the provinces. In general, responsibility for local development, enterprise development or social economy, is at the provincial level, even if there are sometimes overlaps since this area of responsibility was practically non-existent when the original constitution was drafted in 1867.

2.1 Local development in Canada: a brief overview

In the 1960s and 1970s, many regions in Canada were affected be unequal development; jobs were moving to highly industrialized regions such as Southern Ontario with car manufacturing. In rural regions, unemployment went up. At the same time, as in the USA, in larger cities, very poor neighbourhoods grew, in part because of better off people moving to the suburbs. The development of huge shopping centres was a disaster for local stores in the different neighbourhoods.

Many initiatives sprung up all over North America (USA and Canada) as a response to the growing economic and social problems. For example, in the USA, after the riots in Afro-American neighbourhoods in the 1960s, one of the main tools was the creation of Community Economic Development Corporations (CEDC). In 2012, over 4,500 CEDC’s exist throughout the country. Their main focus is affordable housing. At about the same time, local development initiatives sprung up in different States of the USA and Canadian provinces. However, in those years, the main focus (especially in small towns) was on attracting businesses to local industrial parks. The driving force was to attract businesses for job creation, but also to increase taxation income for the municipalities.

In Canada, similar initiatives grew in different regions, often with Quebec province in the forefront. This could be attributed to two factors. Being a largely French speaking society, civil society, community activists, and intellectuals, were able to make bridges with both the US experiences and the local development initiatives in France.

Most people would also agree with the assertion that Québec society underwent a very important “quiet revolution”, from being a very conservative society under the control of the Church, to a most progressive society in North America, with a welfare state like in Scandinavia; and with a strong civil society, including workers unions.

In the early 1980s, community economic development (CED) initiatives started in Montreal and were inspired US initiatives. At about the same time, in part thanks to exchange programmes with France, local development became better. This led to an international conference in Montréal in 1989 under the theme Le local en action. The 800 participants, mostly from France and Québec got local development to be also adopted as a concept.

CED initiatives grew in many places in various provinces, partly inspired by the initiatives in Québec (more than by the US model).

In Canada, when Unemployment Insurance was set up after the Second War, it became a Federal government responsibility. Human Resources and Development Canada-HRDC (the public employment service) set up a programme in the early 1980s to help rural communities with high unemployment (on average much higher than urban areas).

In all rural areas with an unemployment average of 3% above the provincial average, Community Futures were set up. By 2012, there were 269 Community Futures in Canada , described in the Community Futures network as:

Community Futures Development Corporations and Community Business Development Corporations (CFDCs/CBDCs) that provide their communities with a variety of services including business development loans, technical support, training and information. In addition to the business development, CFDCs/CBDCs involve themselves in a wide array of community initiatives, including strategic planning processes, research and feasibility studies, and the implementation of a diverse range of community economic development (CED) projects.

According to a federal government website LINK CFDCs offer a wide variety of programs and services supporting community economic development and small business growth. In particular, they provide:

Strategic community planning and socio-economic development;
Support for community-based projects;
Business information and planning services; and
Access to capital for small- and medium-sized businesses and social enterprises.

These community-based, not-for-profit organizations are staffed by professionals and are each governed by local volunteer boards of directors familiar with their communities’ needs, concerns and future development priorities.

Interestingly, CFDC have adopted CED as a guiding principle for their work. However, as we will see with the CLD model in Québec, there is no specific mandate towards social economy.

2.2 Local socio-economic development in Quebec: a historical perspective

Until about 1900, most of the French speaking population was living in rural communities and was quite poor. The banks and the corporations were all under the control of the English speaking bourgeoisie based in Toronto and in Montreal. In the towns and rural regions, especially in the first half of the 20th Century, a large movement was initiated around cooperatives in order to fulfil their own basic needs. Credit Unions spread all over and this was accompanied in most places with a cooperative grocery store, a farmers coop, etc. In other words, there is a long tradition of a self-help economy in order to survive the very hard times people were living.

After the Second World War, the capitalist economy grew on a similar path as in other countries. Unemployment was higher than the Canadian average, yet the economy was growing, people became consumers with cars and television, suburbs and the rest.

As in other countries, the downturns of the early 1970s had considerable impact on many communities. Unemployment was rising fast in some regions, plants were closing. The reaction was substantial. In some towns, people took to the streets, and protest from many sectors grew. The government, as in other countries, adopted strategies to help people in regions. At about the same time, local people decided to organize in different manners. Civil society movements, including unions, got involved in community and local development efforts.

At about the same time, local businesses and municipal authorities were also concerned and they organized efforts to revitalize the local economy, particularly by attracting businesses to the region (with industrial parks, tax breaks, etc.).

At the time the CLD law was adopted in December 1997, there were four types of organizations already dedicated to some form of local development. They were all initiated in the 1970s and 1980s (and the acronyms used below are for the French name):

Community Economic Development Corporations (CDÉC) in large urban areas (9 existed then). They were set up to help revitalize depressed urban areas. A support organization with no mandate to invest directly in enterprise development, but with the purpose of supporting job creation by getting together projects and funders.
Community Development Corporations (CDC). A network of about 40 organizations dedicated to strengthen the non-profit sector, with no specific intent towards economic activity. All outside large metropolitan areas.
Société d’aide aux collectivités (SADC) (Community Futures). As in other Canadian provinces, the Federal government provides services for the unemployed. There are set up only outside large metropolitan areas. The main criteria are to have an unemployment rate of 3% over the provincial rate. They have a non-profit legal status and the main tool is an investment fund to help people start businesses but also they can help an unemployed person move to another region. Fifty five such organizations exist in Québec. In other provinces, they are called Community Futures.
Economic Development Corporations (CDE). These entities were of the very traditional approach, such as attracting businesses to industrial parks, and are focused exclusively on private companies. The board of directors were practically only people from the local Chamber of Commerce and the municipality. Part of the funding was coming from the provincial government.

Except for the last type, the Economic Development Corporations, there were no people holding public office on the boards of the other types of organization. Their membership is made up of representatives of community organizations; sometimes unions, women’s organizations, etc. Québec is known to have a strong civil society. All the above entities are incorporated as non-profit organizations.

2.3 The social economy in Quebec and its place in local development

Research and studies show that social economy in Québec has a long history and is fairly well developed. As mentioned previously, this approach dates back to the early 20th Century. One of the best known worldwide is the Desjardins Caisses populaires (Credit Unions) that is now one of the largest savings and credit cooperatives in the world. About 80% of the population are member, and it is the main financial institution in the province, larger than the private banks. Cooperatives have been developed in most sectors of the economy and support for cooperatives has been part of government policies for at least half a century. This was done in good part by providing facilitating legal status in the cooperative laws. Besides cooperatives, many non-profit entities are also considered part of the social economy when they run a business. In some cases, social economy enterprises such as in housekeeping for the elderly or the handicapped, they are indistinctly either a cooperative or a non-profit business. The OECD Local Economic and Employment Development (LEED) programme has published books that have chapters that go into detail on social economy in Québec. In one book (Lévesque, Mendell and Laville, 2009) the authors compare social economy in Europe and in Canada. Another book (Girard, 2009) describes social co-operatives which have substantially grown in Québec.

In 1996, due to rising unemployment and pressure to balance the budget, the government convened a Social and Economic Summit. Besides the traditional social partners (business, state and the unions), community organizations, including people involved in the CEDC organizations mentioned above, were invited.

The deal at the Summit had many aspects. The public sector unions agreement to a wage freeze, incentives for people in the public sector to take early retirement (10% retired), and a fund to invest in programmes to fight poverty (financed both by corporations and workers through a 1$ weekly contribution each for three years) were key decisions. In the long term, one of the most important outcomes was adopting social economy as a strategy to create employment and lift people out of poverty. A working group of community organizations proposed, in a report called Osons la solidarité (Daring solidarity), specific measures to create social economy initiatives for job creation. For example, the government agreed to provide a programme to help elderly and handicapped people stay at home. About 100 such enterprises were set up, one in each MRC, Municipalité regionale de comté (Regional County Municipality) or arrondissements (wards) in large cities. Depending on income, there is a sliding scale people have to pay. For very low income people, the cost is about 4$ per hour for housekeeping chores, and others can pay up to 12$ per hour. The rest comes from the different public services. This initiative has created over 6,000 full time jobs, mostly for people who were previously on welfare.

In order to implement this strategy adopted by the government, a support network, the Chantier de l’économie sociale du Québec, was set up to promote and organize this new strategy. Fifteen years later, the social economy strategy is still part of the government social and economic programmes and is considered a success. For example, over the first ten years, 1996 to 2006, about 60,000 full time jobs were created (LINK).

The official definition of social economy in Québec – proposed by the working group and adopted by the government – is similar to the historic definition established in France with the first cooperatives in the 19th century. The ownership and governance are the main factors:

the objective is to serve its members or the community, instead of simply striving for financial profit;
the economic enterprise is autonomous of the State;
in its statute and code of conduct, a democratic decision-making process is established that implies the necessary participation of users and workers;
it gives priority to people and work over capital in the distribution of revenue and surplus;
Its activities are based on principles of participation, empowerment, and individual and collective responsibility.

Over the years, social economy enterprises have shown much success as businesses, since they survive longer than private start-ups. Government statistics show that cooperatives, by far the main type of social economy enterprise, have nearly double the survival rate of private businesses:

New enterprises survival rate:

Cooperatives

After 3 years: 75%
After 5 years: 62%
After 10 years: 44%

Private businesses

After 3 years: 48%
After 5 years: 35%
After 10 years: 20%

3. Linking social economy and local development: the CLDs

3.1 The creation of CLDs

As we have seen, there were many local economic development initiatives since the 1970s and 1980s, all supported up to a certain point by the government, including the very traditional “business-type” approach of the Economic Development Corporations. At the same time social economy was getting recognized more and more as an important economic tool, especially with the Social and Economic Summit of 1996.

Therefore, the government launched a process in early 1997 to develop greater cohesion within its many programmes. People with a business idea had to knock on many doors to try and get help. Another big problem was that the Economic Development Corporations (CDE) were not in any way inclined to support social economy enterprises.

After organizing a public debate with a white paper, a law was drafted and approved in the Quebec National Assembly in December 1997.

The main focus is to provide support for new enterprises or expansion of existing ones, independently of whether they were a regular private or a social economy business. In practice, the government decided that the funding that was previously going to the CDEs would go to the new CLDs, the mandate would be support to both private and social economy business, and the Board of Directors would need to expand to include civil society organizations. The law also explicitly said that no group could have a majority of seats on the Board. Besides funding for operations, this was accompanied by different investments tools, including one specifically for social enterprises (providing a small subsidies for start-ups).

The other task specifically mentioned in the legislation is to adopt a local action plan in partnership with all partners in the region. This is an important tool for all partners but it also offers guidelines to determine what type of business to support or not, investment strategies, etc. For example, if a region identifies tourism as a sector to develop in the future, priority will be accorded to provide support to this sector.

In summary, the idea was to have a guichet unique (one-stop-shop), a single door to knock on for all entrepreneurs. By putting together all types of businesses, and enlarging the board of directors, this was to increase collaboration and synergy of all actors in a local community.

It should be mentioned that the main opposition before the law was adopted came from the CDE community who were saying that social economy was not the “real” economy and that “regular” private businesses was the only way. Along with municipal organizations, they also pushed very hard to have a majority on the boards. Almost all the other organizations that submitted briefs to the Parliamentary Commission were for the law as presented. Fortunately, the then Minister in charge, Guy Chevrette, did not buckle under pressure and Law 170 was adopted as such in December 1997.

In 2003, a change of government came about. The new government, as it had promised to Mayors, rescinded the article concerning a limit to the control by one group of the board. However, as we will see, this did not really change the situation since after the first five years, the model was working well and few municipalities felt that they needed full control.

Article 90 of the 2003 law describes well a local development centre (and is quite similar to the previous law adopted in 1997). A key excerpt is provided below.

90. A regional county municipality may take any measure to promote local development and entrepreneurial support within its territory.

To that end, it may more particularly

(1) offer a full range of front-line services to businesses, possibly in partnership with persons or bodies including those from the private sector, by grouping or coordinating those services and providing funding for them;

(2) develop a local plan of action to stimulate the economy and create employment taking into account the five-year development plan established by the regional conference of elected officers in its territory and, if applicable, the metropolitan land use and development plan as well as the general economic development plan adopted by the metropolitan community in its territory, and see to the implementation of the local plan of action;

(3) formulate, in keeping with provincial and regional orientations, strategies and objectives, a strategy for the development of entrepreneurship, including social economy entrepreneurship; and

(4) act as an advisory body for the benefit of the local employment centre serving its territory

3.2 Operation and funding of CLDs

Since the CLDs were all set up after April 1st 1998, we now have 15 years of experience.

There are now 120 CLDs that cover all the territory of the province iv. Each of the 87 MRC has a CLD and the other 33 are in the 14 urban agglomerations. In order to provide services on a more local basis, Montréal with a population of 1.5 million has 18 CLDs. It is worth mentioning that 9 of the 18 are in fact a CDEC (see above) with the mandate to also act as a CLD partly due to the fact that they cover the same territory. However, Québec City, with a population of 500,000 has only one CLD since the four that existed joined forces in 2002 after the 13 municipalities were amalgamated into the single city of Québec. The previously existing CDÉC de Québec is still working in partnership with the CLD in the poorest inner parts of the city.

All 120 CLDs are members of the Association des Centres Locaux de Développement (ACLDQ).

The legal form of the CLDs is that of an association or what is called in Québec a non-profit corporation. There is a membership, annual meetings and a board of directors. Most CLDs have a wide range of people involved and only a few have a majority of elected people. Since there is a legal entity, a CLD can sign contracts with various departments of ministries. For example, by contract, they also manage a programme and a separate fund for a youth entrepreneurship programme. As stipulated by law, the members of the Board have a legal responsibility for the operations and managements. They can face legal action if they do not perform their statutory responsibilities.

The funding is provided by the provincial government. The CLDs receive each year a budget for operations. From 1998 to 2003 each CLD had a contract with both the relevant provincial government ministry and the municipal authorities. Since then, all the funding from the governments flows through a contract each CDL has with the municipal level. The annual financial statements and other reports are submitted to the local authorities. There is also a contract between the ministry and the local authorities.

For the 2012-2014 period, the three year agreement provides $ 78.4 million to be divided between the 120 CLDs. A complex formula was designed to calculate how this is allocated to CLDs. There are three main criteria:

Population
Number of low income households
Number of jobs required to be created to in order to achieve an unemployed rate of 5% or less, assuming a labour force participation rate of 70%.

This means that in areas with high unemployment and low income, the CLD might get per capita funding 2-3 times more than in other parts of the province.

Each CLD uses part of the funding to help new social economy enterprises with grants to start up.

Each CLD also has an investment fund for loans (or loan guarantees) to businesses. For 2013, the total amount of the investment funds of all the CLDs is 185$ million. This fund, called a FLI (Fonds Local d’Investissement), is a loan by the government to each CLD. Each CLD signs a contract with the government for this fund and the contract is renewed every 3-5 years. There is a formal provision that the loan should be paid back at the end of each contract period, however, ever since 1998, they are always renewed, and often the amount is increased. For example, for 2013, the total of $ 175 million is $ 10 million more than for the previous year. The fund is exclusively for loans and cannot be used for operations. The interest paid on the loans is reinvested in the fund and this, in part, covers bad loans. The CLD does not pay any interest on the loan to the government. The main criteria determining the amount of the FLI each CLD has is mostly the total population of each territory. A social enterprise can also get a loan. In practice, only a small number do so since they get start-up funding from the operations budget of the CLD.

Considering the amount of funding available and the local level they work at, the CLDs are mostly engage in supporting small businesses, either regular private businesses or social enterprises.

A few facts and figures (from a press release of the CLD Association) provide some indications of the accomplishments of the CLDs:

The enterprises supported by a CLD have a survival rate twice the rate of all enterprises after 5 years.

30 000 requests from entrepreneurs are treated each year
18 000 jobs created or saved each year thanks to the CLDs.
The financial impact of CLD intervention generate a total investment of 500$ M. For 1$ invested by a CLD, 10$ of total investment is generated.

3.3 Case study: Québec City CLD

The CLD de Québec is the largest CLD in the province. As mentioned previously, in the largest city of the Province, Montréal, the territory of a CLD corresponds to the limits of the arrondissement (ward). In Québec City, the situation is different. Until 2001 there were four CLD covering 15 municipalities. After the municipalities were merged into the single city of Québec – a merger of the suburbs that had sprung up over time with the historic city – the four CLDs and the new municipal authorities decided it would be better to create a single CLD. The total population covered is 500,000 people. However, after the merger, the new CLD continues providing services locally in each part of the city (arrondissement).

The governance of the CLD is exercised by a Board of Directors with 17 members. For the purpose of designating members to the Board, the membership of the CLD is subdivided into 15 categories. The Board is elected through a process of electoral colleges corresponding to the 15 categories of membership, which are listed below.

BUSINESS SECTOR

Private businesses
Private business / self-employed
Social economy / non-profit
Food industry
Social economy / cooperatives
Culture
Tourism
Environment
Hi tech and information technologies

SOCIAL GROUPS SECTOR

Workers (unions)
Ethnic groups
Women’s organisations
Youth

TERRITOIRES SECTOR

Huron-Wendat Nation territory
Urban agglomeration (members of municipal councils)

Each electoral college elects one member, except for unions and the urban agglomeration which have two. Considering that representatives of municipalities are only two out of 17, the CLD Board is truly representative of all sectors of society.

The financial aspects of the CLD de Québec are quite important. The most recent Financial Statement is for the period January 1st to December 31st, 2012 and provides an overall picture of the operations and investment of the CLD, as summarized below (in CAD / $).

Operations

Revenue (main items):

Québec City – Operations: 4,691,980
Huron-Wendat Nation: 13,750
Emploi-Québec (government employment services): 206,301
Other items: 350,664

Total revenue: 5,262,695

Expenditure:

Local Development

Salaries: 2,766,921
Grants to enterprises (social economy and youth): 1,000,000
Contracts for services: 267,941
Rent, various administration costs, meetings (including AGM), etc: 1,122,041

Internal operations

Rent, communications, salaries, etc: 450,429

Total expenditure: 5,331,381

Investments

As mentioned previously, the investment fund (Fonds local d’investissement, FLI) is provided to the CLD as a loan and can only be used to invest in businesses.

On December 31st 2011, the total amount of the loan is 9,5 million. Over the last 15 years of operation, the fund has an accumulated deficit of 3,1 million. For operations in 2011, the fund had a surplus of 60,000. Formally, the loan should be repaid to the government by the end of 2020. However, as in the past, this loan is renewed from time to time, and is occasionally increased.

In other words, the CLD has 6,4 million (9,5 minus 3,1) of working capital. Each year, the amount of loans paid back is reinvested in new loans. This situation is similar to the other CLDs and the accumulated deficits are not a surprise to anybody. In fact, considering the risks involved, this is considered a good result. Jobs are created, people pay income tax, and there are fewer people unemployed or on welfare.

Main achievements: facts and figures

In a Press release of April 4th 2012, the CLD announced the main achievements of 2011. They showed a major increase of 68% in people interested in entrepreneurship over the previous year; from 2,189 expressions in 2010, to 3,682 in 2011. This increase was especially important for young entrepreneurs, according to the Press release:

Statistics that speak!

The clientele of young entrepreneurs (18-35) now represents 50.6% of the overall clientele of the CLD de Québec. This is the third consecutive increase: from 38% in 2008 to 41.5% in 2009, then 45.8% in 2010 to finally reach 50.6% last year. “This performance confirms not only that the youth in the Quebec region are increasingly attracted to entrepreneurship, but they are more likely to consider this avenue as a real career option allowing them to achieve their goals in life” insisted Jacques Fiset, Executive Director of the CLD de Québec.

Highlights of the 2011 Annual Report also reveals that the CLD de Québec accompanied 1,030 business or local development plans. Out of these, 155 received funding totalling $2.21 million, which resulted in $12, 8 million total investment in the territory and contributed to the creation and retention of 708 jobs. Besides the 50.6% of the projects by young entrepreneurs, 35.1% were initiated by women entrepreneurs and 11.7% were immigrant entrepreneurs. Even if new start-up projects are still about half (50.3%) of cases handled, 17.4% were expansion projects and 16.6% were local development projects. Projects to acquire a business were 3.8%, a slight increase of 0.4% compared to 2010.

Out of the total 155 projects supported with funding, 41% were social economy enterprises and the other 59% were of the traditional business type.

4. Local development at work

The Association of CLDs du Québec (ACLDQ) is an important vehicle for its members. It represents them in negotiations with the government; for example, it was involved in negotiations with the government for the last three year renewal of funding. It organizes training sessions, exchange knowledge on practices, agrees on common tools for evaluating the work and of course represents its members in coalitions or networking with other national (provincial) associations. For example, the ACLDQ is a member of the Chantier de l’économie sociale du Québec and has a seat on its board.

Two examples of the Association’s work help understand local development in Quebec.

In 2008, on the occasion of the 10th anniversary of the CLDs, an important survey was carried out, with government support, concerning the governance of the CLDs. The Association was especially interested in examining the results of the change in the law decided in 2003. The law creating the CLDs was abolished and the responsibility of local development was transferred to the municipal authorities. In particular, they wanted and analysis on the impact on the boards of local CLDs since municipal authorities were now responsible of deciding how the boards would be made up. In particular since there was no restriction any more on the number of municipal councillors on a board (and, in theory, an MRC could decide to occupy 100% of the seats on a board). The study also examined practices on budgeting and financial reports, on internal management and staffing and other related subjects.

In the March 2009 report Enquête sur la gouvernance des centres locaux de développement (Survey on the governance of the local development centres), the study group identified some important points, as shown in the tables and comments below.

Comparison of elected municipal delegates on the Boards of CLDs

1998-2000 Reports	2005 ACLDQ study	2008 ACLDQ study
34%	35%	38%
66%	65%	62%

Row 1: Elected municipal delegates
Row 2: Other delegates

The survey found that in practically all the CLDs there was no change in the balance between elected municipal delegates and other delegates over time. The increase in the percentage of elected people is due to the fact that in a few CLDs, the local MRC decided to have a clear majority (instead of 50%) previously. Since 97 of the 100 CLD who were members of the Association at that time responded to the questionnaire, the study group was able to find the exact explanation for the small overall increase.

Boards with majority elected, majority non-elected and equal representation

With a majority of elected		28 % (27 CLD)
With a majority of non-elected		64 % (62 CLD)
With parity		8 % (8 CLD)

Board of directors of CLDs by sector of representation

The study group identified some situations that were problematic and felt they required attention:

In five out of 97 CLD, the Executive director of the CLD was also the Executive director of the MRC. In two other cases, the person was on the payroll of the MRC.
27 (30, 1%) of the 97 CLDs have no formal contract with the MRC setting out the exact responsibility of each.
In 28, 6% of CLDs, the annual budgets go through a process of pre-approval by the MRC. In the other CLD, this is a decision by the Board.
Even if legally responsible for decisions, 6 CLDs reported that municipal authorities had overturned a decision they had made. In one case, the CLD wrote a letter to the Municipal authorities explaining that by law, they are autonomous. This solved the problem.
In another case, the elected members of the board of the CLD voted unanimously for a decision. Afterwards, the same elected members voted unanimously the opposite during a municipal meeting! Further discussion was needed to solve the problem.
Some municipalities were including the CLD within their organizational structure. The question of autonomy exists in reality, and the perception of the reality.

After analysis of the results, the study group decided not to propose a unique model for all the CLDS. The main recommendation to the ACLDQ was to prepare a handbook, a Guide of best practices in local development for members of Boards and for the staff of the CLDs. The guide should include, amongst other things, a history of local development and of the CLDs, the mission of the CLDs, the legal and legislative aspects, the mode of governance, the role and responsibilities of board members and of the management, etc.

They also suggested that the ACLDQ reach out to the two different federations of municipalities (one of small municipalities and one of large urban areas) so that in their training for newly elected people in municipalities a section is added on local development.

Even if no survey has been done since then, the association knows that the Guide of best practices has become an important tool, in particular for new members of the board and new staff of CLDs.

5. Lessons and challenges

Linking local development with social economy is the defining characteristic of local development as practiced in Québec in the last 15 years and it is probably a major positive outcome of the creation of the CLDs.

Previously, there were more or less two approaches, in practice totally independent of each other. The first was the traditional private business only approach with no links to social economy or civil society. It was quite an elitist approach concerned only with the “real” economy; the other being considered the economy of the poor. In most cases, this type of local development was not active in poor urban neighbourhoods or in regions with high unemployment; or, put differently, it was more active in more prosperous places.

The other type of local development, initiative not by the business community, but often by community organizations (civil society) was concerned with high unemployment, lower income communities, younger generations moving out, etc.

However, there are still are problems and challenges. For instance, in a minority of cases CLDs are not very open to social economy. They still see entrepreneurship as a question of the individual entrepreneur. They do not regard collective entrepreneurship – cooperatives or non-profit enterprises – as good as private business. In other cases, there is a lack of trust in civil society and the municipal authorities want to control the whole process.

Two other factors have an influence: the ability to sustain a longer term perspective and the balance between municipal leadership and how well civil society is organized. Municipal elections are held every four years and it is not always easy for mayors or councillors to imagine the long-term perspective needed for local development. Anyway, there are cases where the population expects the municipality to take the lead and when there are close links between a municipality and its population this can work well. This can also be explained by the fact that civil society is disorganized in some areas.

There are also many places where the CLD is the tool for all actors in a community to organize. For example, if a large multi-national corporation closes down a mine or a factory, many times the whole community mobilizes with the CLD as the focal point for organizing “resistance” and for advocating government intervention to prevent the closure or develop a special programme for the region.

As in many countries, rural communities have difficulties to retain their population, especially the young people. This is even truer in remote regions far away from the large cities. Nevertheless, there are some good examples of real successes in local development work in such regions, involving in practically all cases CLDs, social economy initiatives and local authorities. One example is the creation of over 50 health cooperatives that have been able to attract or retain medical doctors instead of local residents having to travel to large cities. Another example is the creation of solidarity coops (multi-stakeholder) or multipurpose cooperatives in small towns and villages (see The social economy and municipal authorities in Quebec)

Another smaller challenge is the fact that in many rural regions, there is both a CLD and a SADC (Community Futures). Because of different legal restrictions, each can only tap funding from its own government, provincial or federal. However, in practice, this is not a big problem and there is even an advantage since there are two investment funds for local enterprises and projects to apply to! In many case, in a same territory, many members serve on both boards and in some of the faraway places most people know each other anyway. For reasons of convenience and travel costs both organizations hold meetings the same day, with most people attending both meetings. A deal was almost struck between the two administrations, provincial and federal in 1998 when the CLDs were set up but finally, because of politics, there was no deal.

From 1970 to 1995, the rate of unemployment for Quebec province was always about 2 percentage points higher than the Canadian average. In the last years, including the downturn of the economy since 2008, the average rate in Quebec province is the same as the Canadian average. Even if impossible to prove, one of the explanations for this is certainly the social economy and the local development policies decided by the government, in agreement with the social partners .

A change of government came about last September. The Parti Québecois, who had adopted the law in 1997, is examining the possibility of linking local development with social cohesion. This type of approach would create a more holistic approach to local development. This had been proposed by many people at the parliamentary commission in 1997, including the author of this article. The time was not ripe then… maybe it could be now.

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