A french connection

Willy Diddens charts how a democratic foundation and government involvement has created a resilient cooperative movement in Canada’s largest province.

In times of rapid economic transformation, the cooperative movement in a Canadian province, Québec, stands out as an example of systemic stability. In qualitative terms, it constitutes a significant part of the regional economy.  So why such resilience?

Cooperatives have a long-standing tradition, based on the “Rochdale Principles”, and have spread across the Western world.  However, they remain limited in their scope: consumer cooperatives (Co-op Group), cooperative banks (Rabo, Raiffeisenbank), housing cooperatives, worker cooperatives (Mondragón),… There are few examples where a more overarching, integrative movement developed, notably Québec and Catalonia. Both share common features, but also differences that have determined their success.

The roots of the cooperative movement in Québec go back to the late 19^th century.  Québec was largely rural and French-speaking, with many small farmers. Industrialization and the urbanization linked to it, developed mainly in the English-speaking regions. Farmers began organizing cooperatives to pool resources. Their main ally was the Catholic church, which opposed the threatening domination of Anglo-Saxon business models to preserve the traditional order and the Franco-Canadian identity.  The clergy actively promoted cooperatives and cooperative education. It draws its motivation from Catholic social teaching, particularly the encyclical Rerum Novarum. The same teaching led to the founding of the Mondragón cooperative by the Jesuit priest, José María Arizmendiarrieta.

Another cornerstone of Québec’s cooperative tradition was Alphonse Desjardins. He founded the first North American credit union (caisse populaire) in 1900. His goal was to provide ordinary people with access to savings and loans, protecting them from predatory lenders. This led to the creation of the Desjardins Group, which became one of the largest cooperative financial institutions in the world with more than 7 million members and clients.

By the mid-20th century, the movement had expanded into consumer cooperatives, housing cooperatives, worker cooperatives. The influence of the Catholic church had declined, mainly because administrative reorganisations had increased the role of the central Québécois government and considerably reduced the influence of local parishes. Then, in the 1960s, a new development, the “Quiet Revolution”(révolution tranquille), gave a fresh boost to the cooperative movement. The quiet revolution was a period of peaceful, rapid change with a strong nationalistic sentiment and a more active involvement of the government in economic activities. The cooperative movement was regarded as a strong element of Québécois identity, that deserved promotion.

To better assess the development of the Québec cooperative movement, it is useful to consider the Catalan example. It emerged in the aftermath of the 2008 financial crisis, under the name Cooperativa Integral Catalana (CIC).  Two movements coincided: the ‘indignados’ (Spanish Occupy movement) and Catalan nationalism. The ambition of the CIC was high: to create an economic system to replace capitalism, based on a fully integrated network of cooperatives including a financial system and its own currency. The goal was “independence without a state”. The system could shelter the many victims of the mortgage crisis, ready to leave behind the capitalist system. For the Catalan nationalists it would mean ignoring the Spanish state.

The experiment was short-lived. In retrospect the failure was predictable. It was a classic bottom-up movement attracting people of diverse ideologies and backgrounds. Decision-making was difficult, as it was supposed to take place in large horizontal assemblies. Commitment could not be enforced, leading to a divide between a group of highly motivated, but internally divided leaders and a majority of followers and ‘free-riders’. Regional identity turned out to be more divisive than unifying: Catalan became the leading language of communication in a region where only about one third of the population speak it as their first language. By comparison, in Québec 85% have French as their first language. CIC ultimately disintegrated into isolated local initiatives.

In Québec instead, the government has always been involved. After the Quiet Revolution, this involvement became more active. Rather than mainly supporting grassroots initiatives, it moved to integrate cooperatives into its broader economic and social policy. Cooperatives were seen as tools for economic democratization and Francophone empowerment. Financial support was provided through bodies such as Investissement Québec, but also the Desjardins Group.

Even more fundamental was the political and legal dimension. From the 1980s–1990s onward, Québec formally embraced the concept of a “social economy,” in which cooperatives, non-profit organizations and community enterprises play a central role. The government worked closely with networks like ‘Chantier de l’économie sociale’ to design policies, fund projects, and coordinate development across regions. This political commitment culminated in the Social Economy Act of 2013.

The Act is significant because it legally defines the “social economy”, that includes cooperatives and non-profit organizations engaged in economic activity. It positions it as a third pillar of Québec’s economy alongside the private and the public sector. The law emphasizes key cooperative values such as: democratic governance (one member, one vote), collective ownership, limited profit distribution, priority of social objectives over profit maximization.

Furthermore, it formalises the government’s commitment through the establishment of five-year action plans and mandatory reporting. These plans are developed in cooperation with different stakeholders. The measures include: financing tools (loans, capital funds, guarantees), facilitating market access (including public procurement), education and innovation, employment issues. The measures aim to strengthen the approximately 7,000 social economy enterprises across Québec.  For each measure specific targets are defined. In the most recent evaluation in 2024, around 90% of the targets were met.

Compared with the Catalan experience, the integration of cooperatives of different sectors of the economy is not a goal as such. The “social economy” is clearly seen as a third pillar of the economic system, not as an alternative to capitalism. However, some elements of overarching goals are present. Most specific are the “solidarity cooperatives”. They are composed of multiple stakeholders (users/consumers, workers/employees, “support members”). They provide goods and services but also address community needs. They are mainly present at a local level in sectors as home care, local retail, tourism, environment.  They are the fastest growing co-ops, now about 500, although they face particular challenges:  balancing multiple interests, slower decision-making, a less stable financial situation.

Finally, regarding the question of whether the cooperative movement in Québec is resilient, one might argue that it is not, because of the heavy involvement and support by the government. Without that support it would subsist at a more marginal level in a rapidly changing economic environment. However, the stronger argument is that it is indeed resilient because it is deeply rooted in Québécois society, forms part of its identity and has a strong democratic legitimacy.