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A brief History of Credit Unions in Ontario

                                                                                Tony Nguyen vinh Thuong

This article was written in December, 1986.


The concept of cooperatives in Canada has mainly been utilized in five major economic sectors: consumers and produces (food outlets), marketing, services (housing), and finance (credit unions). The concept of credit unions has been practiced in Canada since 1900s. The concept of credit unions is not new, credit unions have their historical origin in Europe. In fact, credit unions which were developed in Europe in 1850 have spread throughout the world.

- What is a credit union? - A credit union is a cooperative financial organization owned and operated by its members. Its purpose is to encourage savings, to use pooled funds to make loans, and to provide other related services to members and their families. A credit union is part of a world- wide cooperative financial system.
As a cooperative, a credit union provides the members with the opportunity to have direct input into the operations of the organization. The Board of Directors of the credit union is elected by and from the broad membership body. As well, at annual meetings, members review the operations of the credit union, and through a democratic vote, approve major policies for the credit union.

A basic democratic principle of all credit unions is the concept of “one member - one vote” regardless of the number of shares held; credit union shares are able to withdraw. Membership in a credit union in Ontario is limited to “persons having a common bond of occupation or association”, or to “persons within a well-defined neighbourhood or community.”

A brief history of credit union in Ontario:

The history of credit unions in Ontario is a part of the history of credit unions in Canada.  So, we can only understand the signification of the historical credit union events in Ontario, if we know the beginning of credit unions in Canada.

In 1900, Alphonse Desjardins, a parliamentary reporter and journalist, established the first Canadian Credit Union: "Caisse Populaire de Lévis ", Lévis, Québec. By 1906, the Cooperative Syndicates Act was passed. Federal Credit Union legislation sought by Desjardins was passed in 1907 by the House of Commons.

As the matter of fact, Alphonse Desjardins had been reading about the successful European cooperatives, and corresponding with the noted cooperative leaders, Henry Wolff in England, Charles Gide in France and Luigi Luzzatti in Italy. After years of study and careful planning to construct the right model for a credit union of French Canadians, Desjardins decided that "the money for share capital must come entirely from the members and it would be withdrew on short notice.” Desjardins also took the fundamental cooperative principles: "one man-one vote and non-profit operation”. Indeed, the two major conceptual contributions of Desjardins to the credit union movement have been the introduction of the basic democratic principle of cooperation and his unique tripartite management structure consisting of a Board of directors, a Credit Committee, and a Supervisory Committee.

The Caisses Populaires of Canada, most of them in Québec, were to grow rapidly and strongly like their counterparts in Germany and today they constitute one of the most powerful cooperative financial systems in the world. Desjardins laid the foundation for other credit unions throughout Canada. In 1908, Desjardins was invited to help drawing up a Bill legalizing credit union in Massachusetts; in 1909, the proposed law was submitted to the state legislature, and the Bill was passed on May, 1909. He played an important part in establishing credit unions in St. Marie Parish of Manchester, New Hampshire, and in New York in 1912.

While the Caisses Populaires of Desjardins was the predominant figure in cooperative credit societies in Québec, and was being modified to meet the different social and economic conditions in the United States as mentioned above. There can be no doubt that  all important role are parallels with by Moses Coady and the Antigonish Credit Union movement in English Canada. In 1928, the Extension Department of St. Francis Xavier University in Antigonish, Nova Scotia, was involved in every active adult education programs in which small study groups were formed in many small rural communities to discuss economic problems and methods of resolving them. The cooperative route was followed, and the Antigonish Credit Union movement was born. By 1933, the credit union movement in the Maritimes which took place was predominantly rural, and organized in small fishing and farming communities.

Credit Unions in Ontario:

In 1928, the first Ontario Credit Union Act became effective. Before that year, about 15 to 20 organizations had been operated. In fact, the oldest of these credit unions is the Ottawa Civil Service Cooperative Credit Society organized in 1908, and the first Credit Union became incorporated in Ontario in 1928. Another Ottawa Society known as the Cooperative Credit Society of Notre Dame d' Ottawa was organized in 1913 and became incorporated in 1929. The original Ontario Credit Union Act (1928) did not provide for adequate supervision and the government ceased to grant charters in 1935.

Prior to 1940, in Ontario, there were about fifteen Cooperative Credit Societies, mainly Caisses populaires, established  in Parishes in French speaking communities around Ottawa. There was no existing Credit Union movement comparable with the Antigonish Credit Union movement in Maritimes and Western provinces. The establishment of the Credit Union in Ontario basically took place from 1940, and was given its impetus by the United States National Association of Credit Union. In consequence, the Credit Union movement in Ontario was very similar to that in the United States. The main point was that the typical United States Credit Union retained the basic framework of the Desjardins Caisse Populaire, but the Credit Union in United States was predominantly urban, and not rural as in Québec. So, until recently, Ontario has had the least development in rural communities, but some progress is being made in this direction at the present time.

In 1940, the new Ontario Credit Union Act was passed. Many associations had been formed on a voluntary basis after 1935.

In 1941, the Ontario Credit Union League was formed with 67 Credit Unions incorporated. The "League", now known as Credit Union Central of Ontario, is the service organization and trade association for hundreds of Credit Unions in the Ontario province. This organization acts as a Credit Union for  providing a wide range of professional support services to its members.

In 1976, all Credit Unions and Caisses populaires in Ontario are members of the Ontario Share and Deposit Insurance Corporation (0SDIC). OSDIC has been a government corporation, established by the Credit Unions and Caisses Populaires Act ( 1976 ), and presently operating under the Credit Unions and Caisses Populaires Ameniment Act (1983), to ensure each Credit Union or Caisse Populaire deposit against loss. Individual member's savings are insured up to $60,000. 
Recently, the Credit Union has spread throughout many communities in Ontario. Employees of an industry, members of a cooperative ethnic group, a rural community, a religious group and a professional group may organize a Credit Union, if they find that there is a need.


In Ontario, Credit Unions have come a long way to serve the Ontarians in the desirability of thrift by systematic saving. Whenever there is no need, there will be no Credit Union. But the need is not over yet. So, the history of Credit Union in Ontario will travel further along the road of service to the Ontarians. However, the Credit Union in Ontario should be reviewed for its weakness as well as its strengths in order to develop these associations. 
                                                                          Toronto, December, 1986.
                                                                          Tony Nguyen vinh Thuong

- Bergengren, Roy F., Credit Union: A Cooperative Banking Book, New York: The Beckman Hill Press, 1931.
- Credit Union in Canada: The Dilemma of Success, Toronto: University of Toronto Law Journal, October 1985, p.72-116.
- Dublin, Jack, Credit Unions: Theory & Practice, Detroit: Wayne State University, 1966.
- Kenyon, Ron, To the Credit of the People (Credit Union History, Ontario), Toronto: Ontario Credit Union League Ltd, 1976.
- Macpherscn, Ian, Each for All: A History of the Cooperative Movement in English Canada 1900-1945, Toronto: Macmillan of Canada, 1979.
 - McGuiness, Fred, 10 to 10: Canada Credit Unions . . . from 10 cents to  10 billion dollars in 75 years ( Credit Union History, Canada ) , Toronto : National Association of Canadian Credit Unions, 1976.
 - Moody, J. Carroll, The Credit Union Movement: Origin & Development (Credit Union History, USA), Lincoln Nebraska: University of Nebraska Press, 1971.
 -Ontario Credit Union: The Financial Alternative, Toronto: 0SDIC,1984.
 - Ontario Share and Deposit Insurance Corporation (0SDIC), Toronto: OSDIC, 1934.
- What is a credit union?, Toronto : 0SDIC,1984.