Canada is navigating a complex economic landscape. Persistent affordability pressures are stretching household budgets, while lagging productivity and a declining rate of entrepreneurship signal that our economy isn’t reaching its full potential. Coupled with global market volatility, these factors make it clear that Canada needs more than a temporary response—we need core economic infrastructure that stabilizes our domestic market and keeps ownership in Canadian hands.
As the national voice for the sector, Co-operatives and Mutuals Canada (CMC) is calling on the federal government to leverage a model Canadians already trust. Our Budget 2026 recommendations provide a strategic path to strengthen economic sovereignty, boost productivity, and anchor wealth within our communities.
The Co-operative Advantage: A Model People Trust
In an era of uncertainty, co-operatives serve as low-risk, high-impact policy delivery tools. Whether in urban centers or remote northern communities, co-ops consistently outperform traditional SMEs in innovation and durability. This isn’t just an economic theory; it’s backed by public alignment. Canadians consistently rate co-operatives higher than traditional corporations on fairness, accountability, and “doing the right thing.”
To meet the moment, we must scale this model now. Inaction risks higher costs, deeper corporate consolidation, and the further erosion of local economies.
Strategic Pillars for Budget 2026
1. Fueling Growth: National Co-operative Investment Fund
- The Ask: $100M federal capitalization over five years.
- The Impact: This fund scales domestic ownership and secures economic sovereignty. By providing patient capital, we ensure that as businesses transition, they stay Canadian-owned and locally rooted.
2. Levelling the Playing Field: Expanding the Small Business Deduction (SBD)
- The Ask: Amend Section 125 of the Income Tax Act.
- The Impact: Levels the playing field for co-operative entrepreneurs. Removing this structural barrier allows co-ops to reinvest millions back into local job creation and community infrastructure.
3. Securing Our Communities’ Future: Permanent Tax Relief
- The Ask: Make the $10M capital gains exemption for sales to worker co-ops permanent.
- The Impact: With $2 trillion in assets set to change hands as owners retire, we must ensure vital community anchors stay Canadian rather than being absorbed by private equity.
4. Housing as a Productive Asset
- The Ask: Prioritize the co-operative model within the Build Canada Homes mandate and extend federal rental assistance (FCHI).
- The Impact: Co-ops are mission-driven partners capable of delivering and protecting deeply affordable housing at cost.
5. Maximizing Every Tax Dollar: Social Procurement
- The Ask: Establish “preferred supplier” targets for co-ops within the Buy Canadian framework.
- The Impact: Prioritizing co-operatives in federal contracts is a budget-neutral way to drive regional development and ensure taxpayer dollars stay in Canada to build local wealth.
6. Bridging the Visibility Gap: National Data Infrastructure
- The Ask: Invest in a Co-operative Knowledge and Innovation Hub.
- The Impact: To harness the sector’s $52-billion impact, we must measure it. This infrastructure will ensure co-ops are integrated into every facet of Canada’s economic strategy.
The Path to a Fairer Economy
The co-operative sector is a $52-billion engine ready to advance the Build Canada Strong agenda. However, inaction carries a cost: further erosion of public trust, weaker local economies, and higher long-term expenses. By making co-ops easier to finance, procure from, and measure, Budget 2026 can unlock a more resilient and inclusive future for all Canadians.
Click here to read our full 2026 Federal Budget Recommendations