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.  

As a rule, Canadian co-operative enterprises should be able to access the Government of Canada’s business infrastructure programs and 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 Daniel P. Brunette, Senior Director, External Affairs at  dbrunette@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. 

Please note that in keeping with longstanding agreements with Members and other sector stakeholders, CMC will support but will not lead discussions related to insurance, financial services and housing.  

CMC’s main advocacy priorities are:  

Government Relations’ Priorities

Incentives for capitalisation and the introduction of favourable tax measures 

1. Ratifying the Tax-deferred Co-operative Share Program as a Permanent Fiscal Measure

CMC is advocating that the Government of Canada ratify the Tax-deferred Co-operative Share Program as a permanent fiscal measure, for the benefit of agricultural co-operatives throughout Canada, before it expires at the end of 2025. 

For more information

2. Establishing a Federal Co-operative Investment Plan

CMC is asking the Government of Canada to establish a Federal Co-operative Investment Plan to support the capitalization of qualifying co-operatives and federations of co-operatives that need equity capital for their development. 

For more information

3. Ensuring Co-operative Entrepreneurs and their Related Canadian-Controlled Private Corporations Can Access the Small Business Deduction (SBD)

CMC is asking that the Government of Canada ensure that entrepreneurs and businesses are not penalized when claiming the Small Business Deduction (SBD) simply because they are members of a co-operative operating in sectors other than agriculture and fisheries. 

For more information

4. Considering Indivisible Reserves as Non-Profit Capital for Taxation Purposes

CMC is advocating that the Government of Canada consider indivisible reserves for taxation purpose as non-profit capital, as it cannot be divided amongst members of a co-operative. Instead, at the co-operative’s dissolution or sale, they are allocated to another co-operative entity.It is permanent co-operative capital treated as a public goodsimilar toall reserves in non-profit organizations (including non-profit co-operatives), which members have no private claim to it. 

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Enabling Growth, Collective Entrepreneurship and Innovation 

5. Creating a Canadian Co-operative Capacity Building Program

CMC wishes to see the Government of Canada create a Canadian Co-operative Capacity Building Program that would help co-operatives to either start up, scale up, gain skills and expertise, or prepare for next steps, ensuring they are ready to solve community challenges and meet needs across Canada. 

For more information

6. Re-establishing and Resourcing a Co-operatives Secretariat or Dedicated Centre

CMC wishes to see the Government of Canada re-establish and resource a Co-operatives Secretariat, or a dedicated Centre, under Innovation, Science and Economic Development Canada (ISED). This Secretariat or Centre would advise the Government on, and coordinate the implementation of, policies, strategies and solutions that involve co-operatives, and act as a knowledge hub between the many federal departments and agencies. .

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7. Promoting Business Conversions to Co-operatives for Corporate Succession Planning

CMC is asking that the Government of Canada encourage business conversions to co-operatives, through awareness and financing, to help maintain local businesses and offer retirement-aged owners another option for their succession plans. Business Conversions to Co-operatives (BCCs) take place when private, public, or non-profit entities transition for a variety of possible reasons into a co-operative corporation. Conversions help to save jobs and businesses, while meeting local needs. 

For more information

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: 

Accessing the Business Development Bank of Canada (BDC)

CMC is currently working with the Business Development Bank of Canada Community Banking Team to identify opportunities and gaps in its policies, procedures, practices and internal knowledge. CMC is continuing this work in order to better serve and finance co-operatives, and increase their number in BDC’s broader portfolio, beyond the 54 that that BDC Legislative Review 2010–2022 report referenced. 

Ensuring that the $10M EOT incentive to sellers applies to worker-co-op conversions

CMC, in collaboration with the  Canadian Worker Co-operative Federation(CWCF),  advocated that incentives put into place for the establishment of Employee Ownership Trusts, be harmonized to include worker co-operatives. CWCF, CMC and others are working with the Government of Canada to outline the rules that would define the qualifying conditions for a seller to benefit from the exemption from taxation on the first $10 million in capital gains realized on the sale of a business to a worker co-operative, subject to certain conditions. This initiative aligns with the concept of tax fairness and the desire to promote co-op conversions as a succession planning tool and means to safeguard economic drivers in communities. Further details will be provided in the coming months. 

Accessing the National Research Council Canada Industrial Research Assistance Program (NRC IRAP)

CMC is working toward unlocking the NRC IRAP program to co-operatives that wish to develop or commercialize technologies. Currently, it is deemed shut to small and medium co-operatives. This exclusion, whose rationale is still unclear, goes against the basic principle that co-operatives should be able to access the business infrastructure programs of the Government and its partners. 

Ensuring co-ops can utilize the government of Canada’s digital business portals

CMC has flagged, and now follows up with ISED and the Canada Revenue Agency, because contrary to other business types, request for business numbers still cannot be accomplished through an online requestThe only option is currently to mail or fax documents, resulting in unnecessary delays for the issuance of business numbers to new co-operatives. 

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.