Canada’s co-op sector has responded to the federal budget, announced at the end of last month by deputy PM and minister of finance Chrystia Freeland.
A six year, CA$43bn package of measures in the budget includes a new grocery rebate to deliver targeted inflation relief for 11 million Canadians; an extra $234 for single Canadians without children; an extra $225 for seniors; lower credit card transaction fees for small businesses; and $198.3bn to reduce backlogs in the healthcare system.
“I have never been more optimistic about the future of our country than I am today,” said Freeland. “Budget 2023 will deliver new, targeted inflation relief for the Canadians who need it most, stronger public health care, including dental care for millions of Canadians, and significant investments to build Canada’s clean economy. At a challenging time in a challenging world, there is no better place to be than Canada.”
Co-operatives and Mutuals Canada (CMC), which provided submissions and met policymakers ahead of the budget, welcomed a number of the measures. In particular, it expects agricultural co-ops in Ontario and Quebec to be among the beneficiaries of a new $333m Dairy Innovation and Investment Fund. This will be invested over 10 years starting in 2023-2024 to support research and development for new uses for certain dairy processing by-products.
“Co-ops are explicitly mentioned as expected beneficiaries; therefore, CMC anticipates that dairy co-ops will be eligible to apply,” said a statement from the apex.
Agricultural production co-ops are expected to benefit from the $13m that will be provided to Agriculture and Agri-Food Canada to “increase the interest-free limit for loans under the Advance Payments Program (APP) from $250,000 to $350,000 for the 2023 programme year”. The co-ops are eligible to apply for the existing APP under current criteria.
Another $34.1m over three years will be allocated to the On-Farm Climate Action Fund to alleviate impacts on eastern Canadian farms – including co-ops – that rely on imported fertiliser.
And there are opportunities for community co-ops to apply for funding through the Local Food Infrastructure Fund, which its an additional receiving $10m “to address food insecurity and investing in infrastructure required to produce, store, and deliver locally-sourced food”.
Co-ops providing community services or engaging in community-building can also benefit from a range of funding initiatives announced in the budget which aim to support diversity, inclusion, and community-building.
Freeland also pledged tax changes to permit the formation of employee ownership trusts (EOT) as a solution for succession planning at small and medium enterprises. CMC says it will work with the Canadian Worker Co-op Federation (CWCF) to engage with the government on the next steps of EOT implementation to ensure that worker co-ops receive comparable treatment by government.
Co-ops in the energy or green technology sectors stand to benefit from pledges on climate-related initiatives, such as a 15% refundable tax credit for eligible investments in clean electricity and $500m for the Strategic Innovation Fund (SIF) to support the development and application of clean technologies; and $1.5bn of existing funds from the SIF towards projects in clean tech.
Last year’s budget committed to allowing financial institutions, including credit unions and caisses populaires, to offer a non-taxable home savings account to allow first-time home buyers the opportunity to save $40,000 towards their first down payment. This policy came into effect on 1 April.
A new measure in this year’s budget requires federally regulated financial institutions to provide relief measures to Canadians who already hold mortgages with them – including extended amortisations, adjusted payment schedules, lump-sum payments, and temporary mortgage amortisation extensions. This policy will affect co-operative stakeholders who are regulated federally and provide mortgage products.
Freeland made commitments to enhance housing support and development of new projects, such as an additional $4bn, over seven years (2024-2025), to implement a co-developed Urban, Rural, and Northern Indigenous Housing Strategy focused on providing housing options in partnership with Indigenous communities; and reallocated funding from the National Housing Co-Investment Fund’s “repair stream” to its “new construction stream” to accelerate the building of new units. CMC said it would work with its member organisation the Co-operative Housing Federation of Canada to ”engage with government to ensure co-ops have full access to funding opportunities as with all areas of government support”.
Measures that could impact healthcare co-ops include the launch of a $13bn, five-year Canadian Dental Care Plan to provide coverage for uninsured Canadians with lower family incomes and no co-pays for the lowest-income families. Another $36m over three years will renew the Sexual and Reproductive Health Fund – supporting “community-based organisations” that enable access to abortion and other sexual and reproductive health services for vulnerable populations. Healthcare co-ops may be among the community-based organisations eligible.
The budget also allocated $31.7m in funding over three years to Public Safety Canada and the Canadian Mortgage and Housing Corporation to create a new “low-cost flood insurance program”, a measure that may impact insurance co-ops.
CMC says it will continue its advocacy efforts on behalf of Canadian co-operatives and mutuals.
