An Inukshuk is a structure of rough stones stacked in the shape of human figure meant to signify safety, hope and friendship. Traditionally, Inukshuk were used by the Inuit in the North for navigation or a point of reference, but has since been transformed into an international symbol of hope and friendship that transcends borders.
Specifically, an Inukshuk signifies a change of direction from an intended course, and serve as a sign to go a new route.
A MESSAGE FROM RICHARD ADAM
PRESIDENT AND CEO
I’d like to focus this year’s message on how the challenging conditions of 2020 provided the impetus for Northern to live up to its core purpose of Making a Difference in People’s Lives; to make an even greater impact on the lives of our members than we have done in the past. In a year of turmoil and unknowns, we remained committed to helping our members navigate through some very difficult situations. As in all sectors, our members were faced with job loss, business challenges, economic stresses, while at the same time keeping a close eye on the health and wellbeing of their families, their colleagues, and their communities. Many of us here at Northern faced similar challenges. And yet, together we found new ways to stay connected, to reimagine our work, and to find creative solutions, all focused on providing our members with ongoing excellent service in a safe way. In this unique moment in time, we found ways to be Truer, Better, and Stronger.
To help our members through the uncertainties of 2020, we adjusted the hours of operation at several of our branches and temporarily closed others, while increasing the number of staff and services provided through our True North Hub, so that members could access the services that they needed, without having to come into a branch. Many of our members faced unforeseen financial struggles and needed our understanding, support and guidance. Northern responded by processing over 1600 payment alterations, and over 450 applications for the Canada Emergency Business Account (CEBA). These extra efforts supported our members at a time when they needed it most.
2020 also strengthened our resolve to focus on delivering streamlined and efficient end-to-end processes that would allow us to collectively deliver more efficient and effective services to our members. As the financial landscape changes and evolves, Northern must continue to ensure our business processes remain relevant and reflect the changing needs of our members. In 2020, working closely with an expert in credit union operations, we launched a review of our internal business processes. The purpose of this review was to explore opportunities to deliver a superior member experience, and build a sustainable and viable Northern Credit Union for the future. As we move into the second phase of this project in 2021, we will be consolidating our branch footprint, and streamlining our resources. It is the ability to make these difficult decisions that will ensure that Northern can continue to modernize our services, keep up with changing member behaviours and industry trends, and ensure our long-term sustainability.
From a financial perspective, we, like all other financial institutions, were significantly impacted by the sudden drop in interest rates and demand for lending. This lack of demand resulted in lending decreasing by approximately 1.5% or over $20 million. Unlike the recession of 2008, members' spending habits shifted resulting in significant growth in deposits. As a result, we ended the year with total assets increasing just under 10% or just shy of $1.7 billion. Net income was significantly impacted by a drop in margin and other income, as well as an increase in loan losses. Through proactive management of expenses and outreach to our members, we were able to end the year with a net income of just under $2.0 million. In summary, 2020 has been a very unusual year with all areas of Northern’s business being impacted.
Despite the challenges of 2020, which were especially evident in the last two quarters of the year, Northern was successful in many areas. In response to member feedback, we introduced a renewed suite of deposit products, and members were especially pleased to benefit from free E-transfers and online void cheques. We also introduced “Fred”, our chatbot. Fred provides our members with answers to routine questions, leaving valuable time for our staff to have deeper conversations with our members. Much work was also undertaken to introduce our fully redesigned website, which was launched in early 2021. We were especially proud to learn that six of Northern’s younger members were awarded over one-third of the total scholarship funds offered through the Credit Union Succeed Bursary.
2020 was the first year that our Annual General Meeting was held virtually, and the first time that all of our 70,000+ members had the opportunity to electronically vote on matters coming before the membership. “One member, one vote” gives all of our members a say in the election of our Board of Directors and the future of our Credit Union. In 2020, 664 of our members voted and exercised their benefit of membership. I am especially pleased to report that votes were representative of all age groups and communities within our footprint. A similar process will be used in 2021 and we are confident we will have an even greater voter response.
Once again, in 2020, both our members and our staff have voiced their support for Northern. Throughout the year, members have overwhelmingly indicated that Northern's service and advice met their expectations related to the services we provide. Overall, our members are very pleased with the level of service they receive from both our in-branch and self-serve channels, and they indicate that they would recommend us to others. Staff have once again confirmed that Northern is a Great Workplace™ as determined by our annual staff engagement survey, which resulted in Northern being certified, as a “Great Place to Work in Canada”.
I am always impressed, but never surprised, by the level of giving back to our communities that are initiated by both our members and our staff, and this was evident again in 2020. Very early in the pandemic, staff quickly rose to the task of creating a COVID relief fund, called the True North Stronger Fund. Through this fund, member donations were matched by Northern and many members in our communities benefited from this fund, administered through our partnership with United Way. Staff and members also contributed to the Making Spirits Brighter Fund where one deserving member in each of our communities received financial support in advance of the holiday season. Staff also organized and supported many other branch sponsored and local events. Northern has demonstrated once again, that in good times and bad, we are there for them. As always, in 2020, our members and their communities benefited from the ongoing support of their credit union.
As we move into 2021, we have much to do. We will continue with the work we commenced in 2020 - to realign our organization to find ways to be more efficient and improve our processes to ensure that we are ready to meet the ever changing needs of members. Our goal is to stay relevant, improve the banking experience, and enhance core processes. We will focus on building a viable organization that allows us to continue to invest in our members and our communities.
Richard Adam, President, and CEO
OUR CORE VALUES & CORE PURPOSE
2020 has been a difficult and challenging year for all of us. The year brought unprecedented changes both around the world and closer to home. It changed the way we interact with each other, celebrate together, and, yes, even bank. Throughout 2020, Northern remained committed to our Core Purpose: Making a difference in people’s lives.
Navigating this era of social distancing, while also having to focus on your family, your work, and your banking can seem overwhelming. Northern Credit Union is here as a true financial partner to help you through the good times and bad while continuing to raise our standards of excellence making our organization TRUER, BETTER, AND STRONGER.
Northern has demonstrated that our people rise to the occasion to meet the needs of our local businesses and neighbours we serve in our communities. We know that every member’s finan-cial goals are different. That’s why we continue to build upon the service our members have come to expect, and aim to bring the banking experience to you, wherever you are.
We honour our commitments to you, working with professional integrity, and are ready and prepared to support you.
We work to understand your specific financial goals, providing you with expert consultation, and are with you for the long haul, providing support as your needs change.
We’re here to support every member so that we can give you the WOW experience you de-serve from your financial institution.
A MESSAGE FROM JEANNIE KILGOUR
CHAIR OF THE BOARD
It gives me great pleasure, to provide you with the 2020 Northern Credit Union Board of Director’s report.
During the past year, it has been necessary for your Board of Directors to conduct all Credit Union Committee and Board meetings virtually through our WebEx portal. We have learned to adjust and adapt to the necessary measures of this virtual environment although, like everyone else, we look forward to the time when we will be able to conduct our business in person once again. I am pleased to report, that despite the changes in how we conduct our meetings, we have been able to ensure prudent oversight, while exercising our due diligence in monitoring all areas of Northern’s business.
Your Directors have continued their education development through online Credit Union courses, webinars and conferences to develop individually in areas that strengthen our Board as a whole. Once again, we have more Directors positioned to attain Accreditation in 2021. We have maintained an external board assessment consultant protocol to ensure that our Directors meet the regulatory requirements established by the Financial Services Regulatory Authority of Ontario (FSRA).
There were numerous necessary and mandatory changes in all areas of the way Northern operates as the result of the onset of the COVID-19 pandemic. On behalf of the Board and our members, I thank our CEO, Executive, and all of our employees for their efficiency in implementing and adapting processes and protocols quickly, thereby providing and maintaining a safe working environment for staff and for members to conduct their financial business throughout the year. I also wish to thank our members for their patience and ongoing support as we worked together to help each other.
2020 was a year that impacted our organization, and the world, like nothing we have ever seen before. Exercising our fiduciary duty to keep the best interest of Northern and our members as our focus, has led us to make a renewed commitment to listening to and supporting our members. As we move into 2021, our focus will be to streamline our processes and systems to enable Northern Credit Union to move into the future such that we will maintain the sustainability of our organization and our co-operative principles.
In closing, I would like to thank our Board of Directors for their dedicated governance, all of our employees for their adaptability in meeting the needs of our members, and our members for entrusting us with the opportunity to provide a positive impact on their financial future as we remain….TRUE NORTH STRONG! Thank you.
Jeannie Kilgour, Chair, Board of Directors
AUDIT COMMITTEE REPORT FOR 2020-2021
Northern Credit Union Limited’s Audit Committee is a committee of the Board of Directors pursuant to Section 125 of the Credit Unions and Caisses Populaires Act, 1994 and Section 27 of Ontario Regulation 237/09. The committee, consisting of five directors, has adopted a mandate that comprises all of the duties specified to be performed by Audit Committees in the Regulations to the Act.
The Audit Committee is pleased to report to the members of Northern Credit Union that it is functioning pursuant to the requirements of the Act and that it has fulfilled its annual mandate. The Audit Committee held five meetings during the year and completed the following significant activities:
- Served as the principal communication link between the External Auditor and the Board of Directors.
- Served as the Board’s liaison with the Internal Auditor and reviewed the scope of internal audit and all reports.
- Reviewed the terms of engagement and scope of the external audit and reviewed the Credit Union’s annual financial statements prior to Board approval for issuance to the members.
- Obtained a reasonable understanding of the important elements of internal audit controls that are important to safeguarding the assets of the Credit Union, that ensure the accuracy of financial reports, and that ensure compliance with policies and procedures.
- Reviewed the activity reports for the Enterprise Risk Management (ERM) Policy and Framework.
- Reviewed and approved the internal audit mandate and work plan.
- Reviewed the policies, procedures and controls which relate to legislative compliance with a particular focus on requirements for liquidity, capital adequacy and interest rate risk management.
Based on its findings, the Audit Committee issues reports and makes recommendations to the Board of Directors or Senior Management, as appropriate, with respect to the matters outlined above, and follows up to ensure that the recommendations are considered and implemented.
The Committee received full co-operation and support from the CEO and Management to enable it to play an effective role in improving the quality of financial reporting to the members and enhancing the overall control structure of Northern Credit Union. The Audit Committee demonstrated a respectful and professional relationship with all parties.
There are no significant recommendations made by the Audit Committee that have not been either implemented or are in the process of being implemented. In addition, there are no matters the Audit Committee believes should be reported to the members, nor are there any further matters that are required to be disclosed pursuant to the Act or the Regulations.
Max Liedke, Committee Chair
Audit Committee: Tim Foster, John Mangone, Daniel McCoy, Sue Klatt
BOARD OF DIRECTORS ATTENDANCE (2020 - 2021)
|Tim Foster||2021||North Bay||16||16|
|Sue Klatt||2023||Barry’s Bay||20||15|
|Max Liedke||2021||Sault Ste. Marie||16||16|
|Grant Love||2021||North Bay||20||19|
|John Mangone||2022||Sault Ste. Marie||16||16|
|Lori Martin||2023||Long Lake||24||23|
Our team truly delivers on Northern’s promise, to partner with our members to support them as they navigate through their financial journey. From our employees who maintained essential branch and member services, to those who found themselves displaced from their desks and working remotely at home, our staff stepped up and continued to provide an exceptional banking experience.
Northern will only ever be as good as our employees who invest in the cooperative principles that founded our credit union 64 years ago. We truly believe that each one of our employees continues to champion these ideals and the values that make us True North Strong. We are also aware of the importance of investing in our employees as member needs continue to evolve.
These investments will help to foster proud, confident, and knowledgeable employees who will continue to serve our members.
Throughout the year Northern was pleased to hear from so many of its members and commer-cial clients throughout our footprint, sharing with us excellent stories of their ‘wow experience’ they received from our people.
Helping our communities in a meaningful way is one of the most rewarding aspects of belonging to Northern Credit Union. Amidst a global pandemic, we knew we had to help our members and communities. Although giving back and lending a hand looked different this year, we remained faithful to our pledge of providing positive outcomes for our communities and the people who live there.
IN DONATIONS MADE BY NORTHERN AMBASSADORS
RE-INVESTED IN LOCAL ECONOMIES VIA STAFF COMPETITIONS
IN COVID-19 SUPPORT TO LOCAL UNITED WAYS
IN DONATIONS MADE TO THE MAKING SPIRITS BRIGHT CAMPAIGN
We partnered with United Way Centraide Canada to launch the True North Stronger Fund to aid ongoing efforts in response to the COVID-19 pandemic. Comprised of public donations and matching corporate contributions, $10,000 was given to United Way to support the immediate needs of communities in which Northern has a presence. Donations were cross-referenced via postal code to ensure that all funds, along with matching corporate contributions, remained within the same communities donors resided in.
Northern is proud to keep your investments local. In November, in honour of National Credit Union Day, 30 staff winners were awarded $100 each to reinvest in small businesses and non-for-profits. So many Northern staff members stepped up finding additional sponsors and contributing funds right out of their own pockets.
Northern is the first Ontario credit union to choose the Aura™ member experience and rewards platform to support the credit union-led initiative, Loyal2Local. Aura is a reloadable Mastercard® that can be used to serve local communities, provides rewards and discounts and financial wellness features. We plan on launching this great program to our members in 2021.
A total of $10,000 in bursaries was given to young Northern Credit Union members in 2020. One recipient received full marks across all criteria, earning him a $3,000 bursary.
This December, Northern gifted over $4,000 to families in need through our Making Spirits Bright Campaign. With the help of local nominations, we were able to spread some cheer across all our communities for those who very much needed it.
NEW IN 2020: AN UPDATED SUITE OF DEPOSIT PRODUCTS
In 2020, Northern was pleased to offer our members a new suite of deposit accounts for both our business banking and retail members. Whether you are looking for a premium account or just something basic, Northern’s new suite of deposit accounts offers something for everyone. All of our accounts are designed with you, our member, in mind. With Northern, you now have more options than ever. Our new deposit products offer:
WE’RE ALL IN THIS TOGETHER.
With many members navigating to digital channels, in the wake of the pandemic, Northern focused on how to continue to provide you with the service you have come to expect through our branch and virtual channels.
Not just because 2020 may very well be known as the “year of social distancing” , but because Northern is committed to providing you safe, convenient and innovative ways to bank, we have launched multiple new tools for you to utilize alongside in branch services and our True North Hub.
Fred the financial assistant can be found on our website. By simply clicking his icon our AI operated assistant can answer a myriad of questions from mortgages to investments and more. 32% of our members are already "digital only" users, so Fred truly offers a flexible, quick and casual approach to your finances.
No, you haven’t been able to see our smiling faces lately, but we’ve been diligent to have them behind masks, to have our surfaces cleaned, installed new barriers and social distance signage to to keep you as safe as possible. We are not done persevering through the COVID-19 pandemic, and we are not done doing our utmost to help our communities during these challenging times. We continue to help our members, businesses, and non-for-profits by providing up-to-date information, and finding the best funding and relief programs available such as: Business Credit Availability Program, Canada Emergency Wage Subsidy, Regional Recovery and Relief Fund, Online CRA Direct De-posit enrolment, Canada Emergency Business Account, and so much more.
These funding options, the True North Hub, Fred our virtual financial assistant, the newly launched website, and our dedication is what roots us in the fabric of our member’s lives and the communities they reside in.