Laying the Foundation for Mutuals in Canada - CSEHub Occasional Paper 01

CSEHub Occasional Paper Number 01 - May 2007
Laying the Foundation for Mutuals in Canada
By Ron Dueck

In this inaugural publication of our Occasional Papers series, Ron Dueck explores the history and current status of mutuals in the Canadian context. Laying a Foundation for Mutuals in Canada examines (1) the history of mutuals as a distinct form of economic organization, (2) analyses the legal framework available for the development of mutuals within the Canadian social economy, (3) addresses the economic and social strengths and weaknesses of the mutual form of organization, and (4) evaluates the suitability of the mutual model for various types of social enterprise. The paper addresses the history of mutuals as guilds; friendly and provident benefit societies, insurance mutuals, the role of mutuals in the development of the welfare state, the current wave of demutualization, and emerging social enterprise mutuals. The legal framework section examines the capacity of mutuals to organize in Canada as voluntary associations, incorporated societies, corporations, co-operatives, trusts, and labour unions. The third section examines mutual economic strengths in respect of margin advantages and agency efficiencies, together with social strengths in respect of community cohesion and sustainable decision-making. The paper also examines mutual economic weaknesses in respect of limited access to capital markets, limited ability to gain market share through acquisitions and consolidations, and decreased agency efficiencies. In light of the dearth of Canadian literature on mutuals, the paper draws from the sparse body of Continental academic literature on the subject, together with consultation documents collected by the European Commission, Enterprise and Industry in its drafting of the EU statute for mutuals.

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