Government relations

As a part of its core mandate, CMC advocates to the federal government and monitors its activities, policies, laws, programs and regulations which directly affect the establishment, growth and resilience of co-operatives and mutuals across the country. A strong working relationship with the federal government creates a more enabling environment and safeguard programs and incentives that are specific to the movement, which in turn, positively impacts local economies and communities.   

When they meet the criteria, Canadian co-operative enterprises should be able to access the Government of Canada’s business infrastructure programs, financing streams, as well those related to specific industries and the social economy.  

If you have experienced issues accessing those programs and/or streams, would like more information or have any suggestions, please contact Nancy Wanye, Manager, External Affairs at nwanye@canada.coop. If you are unable to access a program because of your incorporated status as a co-operative, you will be asked for permission to share your specific details in order to help resolve the issue.  

CMC has created some free tools and resources to help Canadian co-operatives with their advocacy needs. Although these resources mostly focus on the Federal scene, the information found within can also be applied to provincial and territorial as well as municipal activities. 

Please note that in keeping with longstanding agreements with members and other sector stakeholders, CMC will support but not lead discussions related to insurance, financial services and housing. Please see the bottom of this page for those contact details. 

 

CMC’s main advocacy priorities are: 

Priority 1: Create a Co-operative Investment Fund

CMC recommends an initial federal capitalization of $100 million over five years to launch a purpose-built national fund providing repayable capital for co-operative growth.  

  • Scaling Ownership: The Fund will provide the patient capital necessary to start and scale co-operatives, which have been found to be more innovative than traditional SMEs. Data confirms that 39% of co-operatives are classified as innovators compared to 28% of traditional SMEs, and they are more likely to adopt advanced technologies (17.4% versus 13.7%)—making them critical drivers of an innovative economy.6  
  • Securing Conversions: This Fund will facilitate business conversions to co-operatives by providing the essential financing required for employees to purchase businesses from retiring owners. This strategy is grounded in evidence from the “Business Conversion to Co-operatives in Canada: A Landscape Report” (2024), led by Dr. Marcelo Vieta, which analyzed over 400 successful conversions to make the case that co-operative buyouts are a robust, yet underutilized pathway for business continuity that preserves the productive capacity of local communities.  
  • Leveraging Capital: Federal investment will act as a “cornerstone,” de-risking the Fund to attract an additional 2:1 leverage of private and community capital.  

Priority 3: Ensure Robust Implementation of Capital Gains Tax Relief 

CMC and the Canadian Worker Co-operative Federation (CWCF) welcome the permanent codification of the $10-million capital gains tax exemption for sales to worker co-ops and Employee Ownership Trusts (EOTs).  

  • Technical Oversight: The focus now shifts to technical oversight; CMC will work closely with Finance officials to ensure final legislative drafting in the Income Tax Act remains robust and that “qualifying co-operative conversions” are fully protected.  

Priority 5: Advance Social Procurement and “Buy Canadian” Strategy 

CMC recommends integrating co-operatives and other types of social enterprises into the $186 million Buy Canadian Policy framework.  

  • Establish Mandatory Social Value Targets: Build on the current framework by establishing a “preferred supplier” status or mandatory targets for co-operatives and social enterprises, mirroring the successful 5% Indigenous procurement mandate.  
  • Scoring Metrics: Formally include “community ownership” and “local profit reinvestment” as metrics within the 25% “Canadian Value” federal contract evaluations.   
  • Optimize the Small Business Procurement Program: Direct a dedicated stream of the now-active $79.9 million program toward technical assistance to help co-operatives and other social enterprises maintain their role in federal supply chains.  

Priority 2: Expand the Small Business Deduction (SBD) Access 

CMC calls for a targeted amendment to Section 125 of the Income Tax Act to harmonize tax treatment across all co-operative sectors. 

  • Eliminating Disincentives: Current rules inadvertently penalize Canadian-Controlled Private Corporations (CCPCs) for joining co-operatives by categorizing their income as “specified corporate income,” creating a direct tax disadvantage compared to traditional SME counterparts. Restoring the SBD access will ensure that entrepreneurs are not unfairly penalized with a higher tax rate simply for choosing a co-operative business structure.  
  • Unlocking Capital: Restoring the SBD will allow co-operative members to access a combined federal/provincial tax rate of approximately 9% to 13%, rather than the 27% general corporate rate they are currently forced to pay on income earned through the co-operative.7 This correction will remove an unintended 14-18% tax penalty, directly freeing up capital for members to reinvest in equipment, technology, local job creation and more.   
  • Professional Validation: This recommendation aligns with the long-standing recommendations of the Joint Committee on Taxation of the Canadian Bar Association and CPA Canada to resolve technical distortions that penalize collectively owned business models.8 This signals that the amendment is a necessary “cleanup” of the Income Tax Act to ensure it functions as intended for all small business owners.  

Priority 4: Strengthen Co-operative Housing 

CMC and CHF call on the government to prioritize co-operative housing within the operational framework of Build Canada Homes (BCH), and to transition the Federal Community Housing Initiative (FCHI) and Canada Community Housing Initiative toward permanent programs that secure existing affordable homes.  

  • Driving National Productivity: Research confirms that increasing Canada’s non-market housing to bring Canada’s community housing stock in line with international benchmarks, specifically the 7% OECD average as a share of total housing stock will add between $67-$136 billion to Canada’s GDP by 2030.9  
  • Protecting Investment: Extending the FCHI is a vital defensive measure. It will prevent a “net-zero” gain where the benefits of new construction through BCH are offset by the loss of existing deeply affordable units, safeguarding billions in previous federal investments.   
  • Efficiency in Scaling: As BCH matures into its standalone role as a Crown corporation, co-operatives offer a proven, mission-driven governance structure capable of serving as the operational partners for the federal government’s large-scale affordable and community housing projects. This partnership will ensure that these new developments remain community-owned assets rather than becoming speculative commodities.  

Priority 6: Build a National Co-op Data Infrastructure 

CMC seeks federal investment to establish a Co-operative Knowledge and Innovation Hub to bridge the “visibility gap” in current policy.  

  • Increase Efficiency of Federal Efforts: Modernizing data collection on co-operatives will maximize the return on federal investment by ensuring programs are evidence-based and responsive to market needs. It will also enable the government to identify and remove specific legislative and regulatory barriers to growth, moving from statis snapshots to a data-driven approach of unlocking co-operatives full economic potential.  
  • Standardizing Impact Measurement: Consistent impact measurement frameworks will allow for a unified understanding of how co-operatives strengthen regional resilience and domestic supply chains.  

Ongoing Files

CMC  continues to be involved in specific files where the eligibility requirements for programs and funding streams are unclear or need to be amended, as well as documenting other concerns. These files include, but are not limited to:  

Monitoring the limitations of section 136 (2)(d) of the Income Tax Act

CMC is monitoring and seeking examples of the negative financial impact of section 136 (2)(d) on financing received from outside investors, at a time when the government is encouraging more impact investing through its Social Innovation and Social Finance Strategy.

 

Making the Tax-Deferred Co-operative Share (TDCS) Program permanent

Tax-Deferred Co-operative Share Program (TDCS) Renewed Until 2030.

“Budget 2025 proposed to extend the period during which agricultural co-operatives can distribute tax-deferred patronage dividends paid in shares to their members until the end of 2030.” (p. 223)

This renewal represents a strong recognition of the program’s impact on the growth and resilience of Canada’s agricultural co-operatives. With the TDCS extension now secured, our focus shifts to showcasing its long-term value to build momentum toward eventual permanency.

 

Other contacts 

For questions about the Co-operative Housing Federation of Canada (CHFC) Advocacy priorities, please contact: Courtney Lockhart, Associate Director, Public Affairs and Policy at CLockhart@chfcanada.coop. 

For questions about the Canadian Association of Mutual Insurance Companies (CAMIC) advocacy priorities, please contact: Sangita Kamblé, President and CEO at skamble@camic.ca. 

For questions about advocacy priorities for credit unions and caisses, please contact Michael Hatch, Vice-President, Government Relations at the Canadian Credit Union Association (CCUA) at mhatch@ccua.com and André Brisebois, Chargé d’affaires, Government Affairs, Desjardins Group at andre.a.brisebois@desjardins.com