The New Generation Co-operatives Act provides for the creation of a new kind of co-operative that:
- produces, processes or markets agricultural products; and/or
- provides services to persons engaged in those undertakings.
Other types of permitted businesses may be added by regulation.
Provincial and extra-provincial co-operatives incorporated, continued, or amalgamated under this Act will be governed by co-operative principles, as in other Saskatchewan co-operative legislation (e.g., one member, one vote), with some differences.
Saskatchewan is the first province to allow this type of co-operative to issue investment shares to non-members, subject to restrictions, in addition to members providing capital to the co-operative through share financing proportional to their future delivery commitments. In this way, new generation co-operatives overcome some of the difficulties traditional co-operatives have had in raising new capital.
And, unlike traditional co-operatives, these co-operatives can restrict membership.
The major provisions of the Act:
- allow other corporations to amalgamate, continue, or register under thism legislation, provided that they engage in permitted businesses;
- require that participation in the co-operative be based on membership, and a capital structure composed of common or preferred shares, or a special class of preferred shares issued only to members as specified in the articles;
- provide for par value common shares issued only to members who are entitled to receive dividends and who may share in any surplus on winding-up of the co-operative;
- provide for classes of non-par value preferred shares that may have the following features:
- entitled to receive dividends and fully transferable;
- elect a maximum of 20 per cent of the board of directors where the articles provide;
- vote with regard to changes to preferred shares;
- vote separately from members;
- dissent rights; and
- allow individuals to hold a maximum of ten per cent of the issued preferred shares that elect directors;
- provide for a class of non-voting preferred shares issued to members associated with the obligation to supply key inputs to the co-operative and a corresponding obligation on the co-operative to accept the inputs;
- provide members and preferred shareholders with voting rights and remedies in the event of fundamental changes;
- provide that only members vote to enact or change bylaws; and
- authorize the Co-operative Securities Board to review a proposed issue of securities to members of the public unless the Board elects to refer the matter to the Saskatchewan Financial Services Commission or allows the co-operative to elect to deal directly with the Commission.