Canadian co-ops apex responds to government’s fall statement

The Fall Economic Statement includes measures on the green economy, job creation, energy, housing and tax

Co-operatives and Mutuals Canada (CMC) says it is continuing to evaluate the national government’s annual fall economic statement, which includes measures on the cost of living, affordable housing, and resilience in industry.

Delivered on 3 November, the budget includes CA$250m delivered over five years to Employment and Social Development Canada to advance sustainable energy. It also introduces the Sustainable Jobs Secretariat – a “one-stop shop” for information about federal supports for low-carbon economic opportunities. These tools will be available to a range of stakeholders, including co-ops.

CMC, the umbrella body for Canadian co-ops, said it hopes the move will inspire the government to restore the Co-operatives Secretariat, which ran within the federal public service for 26 years until 2013.

In its initial assessment of the budget, CMC added that it would continue to evaluate the details and seek to influence the implementation of programmes for the benefit of its members. It will also seek to “advance the views and voices of relevant co-ops operating in sustainable sectors and the green economy” as the sustainability projects roll out.

The budget also includes “a refundable tax credit equal to 30% of the capital cost of investments” in certain low-carbon activities in the energy sector. These include some specific electricity generation systems; stationary electricity storage systems; low-carbon heat equipment; and industrial zero-emission vehicles and their charging/refueling equipment. This comes alongside the creation of a clean hydrogen production tax credit.

CMC said: “Co-ops may be able to access this rebate – subject to taxation details becoming known as this initiative is developed.”

The statement also pledges to provide $802.1m over three years to the federal Youth Employment and Skills Strategy. CMC said it expected this will allow co-ops “to access further federal money to offset costs of hiring young people, particularly through the Canada Summer Jobs initiative that many small to medium sized co-ops have previously been eligible to participate in.”

Another pledge from the government is the lowering of credit card transaction fees for small businesses, which CMC says could bring financial benefits for co-ops – and their customers – which use credit card payment methods.

In terms of tackling soaring rents and helping Canadians to save for a home, the government announced the launch of a Tax-Free First Home Savings Account, which will allow new buyers to save up to $40,000 tax-free. Furthermore, the First-Time Home Buyers’ Tax Credit will newly provide “up to $1,500 in direct support to home buyers to help offset increasing closing costs” while a tax-free payment of $500 will be granted to 1.8 million low-income renters.

This follows the announcement in April of $500m in federal funding and $1bn in loans as part of a new Co-operative Housing Development Program.

The statement also announced a new “corporate-level 2 per cent tax” on “the net value of all types of share buybacks by public corporations”.

CMC said: “While not applicable to the co-operative model, CMC notes the willingness to make socially responsible updates to tax policy – an area in which we have several advocacy asks including ensuring fair tax treatment on indivisible reserves and making the tax-deferred co-op share program permanent – and to use tax levers to motivate corporate action.”

Annoucing the statement, the government said it wanted to deliver on sustainability and economic inclusion. “Today’s Fall Economic Statement is focused on building an economy that works for everyone – an economy that creates good jobs and which makes life more affordable for Canadians,” said deputy PM and finance minister Chrystia Freeland. “Even as we face global headwinds, the investments we are making today will make Canada more sustainable and more prosperous for generations to come.”