The next federal budget should introduce a tax incentive for co-operative members and employees who invest in their organization, MPs on the finance committee were told last week.
The plea came in two separate presentations to the influential House of Commons committee conducting extensive pre-budget hearings.
The Canadian Co-operative Association, which has promoted the idea for several years, told MPs that it would cost the government little and help co-operatives a lot by attracting capital investment.
A similar program has existed in Quebec since 1985, which in 2002 cost the Quebec government $6 million in tax revenue and attracted $36 million in investment.
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“What’s important about what this ask is, is that it is not simply an ask for government funds,” CCA government affairs and public policy director John Anderson told the committee Sept. 16. “This is a partnership between co-operative members and the government in the sense that the government benefits from the investment of co-operative members and their employees in co-ops, which helps create jobs.”
The association also called for a Co-operative Development Fund that would lend money.
The next day, Canadian Federation of Agriculture president Laurent Pellerin made the same pitch for a tax incentive to the same committee.
“The co-op doesn’t have access to public money and so some provinces have already put in place a co-operative investment plan,” he told MPs. “We ask that the federal government have a similar change in their programs and budget. It will give them (co-ops) access to capital, which is a necessity to improve infrastructure everywhere in the country.”
In a brief to the committee, the CFA said encouragement for investment would deal with the biggest problem facing co-operatives. “The Achilles heel of all co-operatives is capitalization,” the brief said.
There was little MP reaction to the idea, although Bloc Québécois MP Jean-Yves Roy said it has been effective in Quebec.
“Effectively, it produces about $30 million of new investment each year in terms of co-operatives in Quebec,” agreed Anderson.
However, there was interest in an association recommendation that Ottawa increase international development aid spending by an average of 15 percent per year for a decade to get the country to the international aid target level of 0.7 percent of gross national product.
Toronto Liberal John McKay asked if the association had a view on recent changes by the Conservatives to “re-profile” the foreign aid program with more concentration on fewer countries.
“We certainly are somewhat concerned about the re-profiling and the change in country focuses,” replied association international communication and policy director John Julian. “We are certainly concerned by any sense that we’re backing away from Africa.”
He said the Canadian government should reconsider the decision to reduce or abandon aid to some of Africa’s poorer countries.
They are countries “that are on their knees but able to stand if we give them a bit of a hand up,” he said.
