The Canadian government released its 2025 federal budget – the first under Mark Carney’s premiership – on 4 November, announcing a range of measures that will impact co-operatives and credit unions.
MPs voted narrowly in favour – by 170 to 168 – of the second largest fiscal package in Canada’s history, allowing Carney’s minority Liberal government to avoid an early election and raising the national deficit to a projected CA$78bn (£42.47bn). Many opposition lawmakers have sharply criticised the plan but it passed with the support of Green leader Elizabeth May.
Measures include continued support for housing co-ops, with the government pledging to use the model to improve affordability.
Earlier this year, the government launched the Co-op Housing Development Program, its largest in the sector for 30 years, with $423m directed to eight new co-op buildings.
Co-operatives and Mutuals Canada (CMC) welcomed the news but urged ministers to renew the Federal Community Housing Initiative (FCHI) beyond 2028 to preserve mixed-income affordability in co-op housing.
The apex also wants other temporary measures in the budget to be made permanent, including the option for agricultural co-ops to distribute tax-deferred patronage dividends paid in shares to their members. This has been extended to the end of 2030.
A $10 million exemption on sales of businesses to worker co-operatives until December 2026, which helps retiring business owners transition their companies to employee ownership, was also confirmed. CMC and the Canadian Worker Cooperative Federation (CWCF) both want this made permanent.
Other measures will benefit credit unions, including the proposal to amend the Bank Act and the Canada Deposit Insurance Corporation Act to make it easier for federal credit unions to achieve scale and for provincial credit unions to enter the federal framework. Under the proposal, the 35% public holding requirement threshold would be raised from $2bn to $4bn, which, argues the government, will make it easier for small financial institutions to grow larger before having to change their ownership structure.
And legislation will be amended to support federal credit unions’ growth via amalgamation or asset acquisitions. It will also be made easier for credit unions to enter the federal framework, including giving them the flexibility to continue their existing auto-leasing business on a permanent basis.
CMC welcomed these proposals, along with the new Buy Canadian Policy which, it said, could expand opportunities for co-ops and social enterprises in federal procurement and investments in clean energy, infrastructure, and workforce development.
But the apex warned more support is needed, including dedicated investment tools to help co-ops access growth capital; expanding access to the Small Business Deduction for co-ops; clean-energy incentives for renewable-energy co-ops; and new funding for social finance or co-operative development.
CMC said it would continue to “work with the federal government to ensure co-ops remain central to Canada’s inclusive and sustainable growth agenda”.
This article was amended on 17 November to include additional information on the exemption on sales of businesses to worker co-operatives
