Co-operatives and Mutuals Canada (CMC) has welcomed measures in the federal spring budget, including the permanent codification of a $10m capital gains tax exemption for business conversions to worker co-ops and employee ownership trusts (EOTs).
The spring economic statement, announced by finance minister François-Philippe Champagne, had a stated focus on domestic economic sovereignty and long-term fiscal stability through the government’s Build Canada Strong agenda.
Central policy pillars are a new sovereign wealth fund for strategic domestic investment, skill training and other support for workers and young people, affordability measures and crime-related measures to improve community safety.
In its response, CMC and the Canadian Worker Co-op Federation (CWCF) thanked the government for ”decisive measure” on capital gains tax – which, said CMC, “directly addressed Canada’s looming CA$2tn small business succession crisis”.
CMA added the move brings regulatory certainty and economic sovereignty.
“Meaningful succession planning requires a long lead time,” it said. “By making this measure permanent, the government has provided the certainty owners need to choose the co-operative model with confidence.
“This policy ensures that Canadian businesses remain locally owned, keeping investments and jobs within our borders instead of risking losing them to external acquisition.”
CMC and CWCF says they will now work with the government to ensure the final legislative drafting in the Income Tax Act “remains robust and that ‘qualifying co-operative conversions’ are fully protected”.
Other measures in the budget highlighted by CMC include support for rural and agricultural businesses, where many co-ops are active.
This includes $7bn in new investment, made up of $2bn from Farm Credit Canada (FCC) and $5bn from a private-sector coalition, to be deployed by 2030 for scaling sgri-tech and domestic food security; immediate expensing for greenhouse buildings; and temporary fuel tax suspensions.
There are also measures which will benefit credit unions and finance co-ops, says CMC, including the launch of Canada’s first national real-time payment system, funding to tackle financial crime, and action to implement technical standards which will ensure that “credit unions can compete fairly by giving members secure control over their own financial data”.
A new initiative to train 100,000 new Red Seal apprentices, will provide “a federally supported talent pipeline for trades-heavy co-ops”, adds CMC, while a rate reduction in the Canada Pension Plan will bring payroll relief.
While the government’s update focused heavily on the mechanics of building new homes, CMC and the Co-operative Housing Federation of Canada (CHF) say they will continue to push for the operational supports needed to keep them affordable.
The apexes want to want to see programmes like the Federal Community Housing Initiative (FCHI) – set to run out in 2028 – renewed for at least ten years, “to prevent a displacement crisis for thousands of low-income households”.
And they want the Build Canada Homes agency to prioritise co-operative and non-profit housing, “to deliver shovel-ready projects quickly and at scale”, while recapitalisation is needed for the repair and renewal of existing co-op homes.
”CMC will continue working with the government to make co-operatives easier to finance, easier to procure from and easier to see in data,” said the apex.
“With over 14 million Canadians belonging to a co-op, credit union, caisse or mutual, and a strong majority of Canadians (81%) viewing co-operatives as a primary solution to some of Canada’s biggest challenges, including affordability and inequality – co-operatives are uniquely equipped to provide stability, local control, and the fairness Canadians are seeking in this volatile economic moment.
“As a model built on trust and designed to evolve through uncertainty, we are committed to ensuring that the government’s Build Canada Strong agenda is fully realized through the strength and stability of co-operatives.”
