Co-operatives and Mutuals Canada 400 - 275 rue Bank Street Ottawa, Ontario, K2P 2L6 info@coopscanada.coop

10-16-2019

Co-operatives and Mutuals Canada

2019 Election Commitments and Co-operatives Overview of platforms in relation to the co-operative sector

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2019 ELECTION COMMITMENTS AND CO-OPERATIVES

Message from the Executive Director

A federal election presents a unique opportunity to engage with parties and to hear about their respective visions for the country. This document is intended to inform members of some of the election’s hot topics and party commitments.1

We encourage you to engage locally with your candidates and to do so again once your representative has been elected. If you would like ideas on how to do so, please consult the pre-election toolkit.

Due to the federal election, there will not be a mid-year delegates meeting / “Hike the Hill” in November 2019. CMC will connect with members in the coming months, through consultations that will inform the development of the 2020-2025 strategic plan. To ensure

that newly elected MPs become familiar with the Canadian co-operative sector early in their term, the Honourable Senator Lucie Moncion and Co-operatives and Mutuals Canada will host a co-operative networking breakfast for parliamentarians featuring guest speaker David Coletto, Chief Executive Officer of Abacus Data. An invitation will be sent to you very soon.

If you would like more information or if you need help to engage candidates locally, please contact Daniel Brunette, Director - Advocacy and Partnerships at dbrunette@canada.coop or 613-238-6712 ext. 208.

1 Please note that the information presented here is based on the commitments made at the time of preparing this document. Members are encouraged to consult party announcements as they become available for the most up-to-date information.

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Rural and Remote Canada

Various proposals in the platforms touch on rural and remote Canada. The New Democrats would expand the availability of in-person services in rural and remote Canada, while increasing infrastructure, digital access, banking options and transportation services. The Liberals commit to consolidating services for – and increasing investment in – food producers and processors. They would also improve access to internet in rural and remote regions. The Green Party, in turn, sees an expanded role for Canada Post – particularly in rural and remote regions where it could support banking services delivery, share its office space and provide reliable internet.

The Conservatives would also set up a specific rural and remote communities infrastructure fund, keep the appointment of a Minister for Rural Affairs and ensure that the ministers responsible for the regional development agencies are MPs from that region.

IMPACT ON CO-OPERATIVES

Co-operative businesses are important partners in rural and remote economic development, and will benefit from improved infrastructure, transportation and access to services. Of national importance but with rural and remote Canada often highlighted, broadband internet access and telecom affordability are present across the platforms.

DID YOU KNOW?

The co-operative model is essential to the long-term economic well-being of rural and remote communities and is part of their social fabric. For example, Canada’s 1,200 agricultural co-operatives collectively purchase, process and market up to 20% of Canada’s agricultural products, while also employing 30,000 Canadians. Furthermore, co-operative businesses already respond to the needs of rural and remote communities through offerings such as: high-speed internet, cable television, retail/wholesale operations, tourism, and many others. Through CMC, the Government has access to unique resources and partners that can inform and help implement a successful Rural Economic Development Strategy.

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Housing

The availability of affordable housing continues to be a key speaking point during the campaign. The Green Party specifically mentioned making more resources available for housing co-ops and would develop a Canada Co-op Housing Strategy. One can find commitments to build or renovate 100,000 (Liberal), 400,000 (Green) 500,000 (NDP) affordable homes over a decade. The Conservatives would make surplus federal land available for housing development, launch a public inquiry into money laundering and its effect on housing markets and cancel the “Encouraging Innovation with the Housing Supply Challenge” program.

IMPACT ON CO-OPERATIVES

The Co-operative Housing Federation of Canada and the Agency for Co-operative Housing, two CMC members, are key stakeholders in any discussions concerning housing. Co-operative housing is more affordable, sustainable and attainable than buying or renting. Financial co-operatives will also be impacted by commitments related to fees, rates and mortgages. For example, both the Conservatives and the NDP propose increasing the amortization period to 30 years for first time homebuyers, whereas the Liberal Party intends to increase the First-Time Home Buyers Initiative home value-limit in extreme markets like Vancouver and Toronto.

DID YOU KNOW?

Housing co-operatives are collectively one of the nation’s largest suppliers of housing in Canada, with roughly 100,000 units that are home to over 250,000 Canadians.

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Immigration

The economic and labour market impact of immigration is discussed in each of the platforms. The Liberals and Greens would both increase immigration levels, while the Conservatives and NDP have not cited specific numbers. The People’s Party of Canada, in contrast, proposes substantial immigration reductions and an end to funding for official multiculturalism programming. The New Democrats, Greens, and Conservatives would review the foreign credential recognition process to expand professional opportunities for

newcomers. The Conservatives would encourage new economic immigrants to consider opportunities outside of urban centres and remove the cap on Privately Sponsored Refugees, while strengthening the border and renegotiating the Canada-U.S. Safe Third Country Agreement.

IMPACT ON CO-OPERATIVES

Co-operatives, like all businesses, are affected by skills shortages. Newcomers can be an important source of relevant skills and entrepreneurial spirit, particularly in regions with decreasing population numbers.

DID YOU KNOW?

Co-operatives can also play a positive integrative role for newcomers to Canada by providing opportunities for collaboration and community-building. By virtue of their open membership structure, co-operatives are inclusive of all – regardless of racial, religious, gender, political, or social characteristics.

International Trade

Global topics have overall received less attention than domestic concerns in the electoral campaign. That said, the incoming government will need to address international trade files, including the Canada-United States-Mexico Agreement (CUSMA) and trade relationships with China. The Liberals would move forward with CUSMA as negotiated. The NDP is critical of the deal and would work with Democrats in the U.S. to change the agreement. The Green Party would restructure various international trade agreements to

focus on climate change and justice concerns and would do away with the investor-state dispute settlement mechanism. The Conservatives would monitor non-tariff trade barriers and would work to diversify Canada’s trading partners.

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IMPACT ON CO-OPERATIVES

Co-operative businesses that export products are significantly affected by international trade, as these policies and agreements shape relationships with foreign markets. Tariffs, quotas, or subsidies have industry-specific implications. For example, the new NAFTA agreement saw supply management as a core issue and notably impacted Canadian dairy, chicken and egg farmers, as well as those involved in the lumber industry. On another note, the ongoing trade dispute with China is affecting the commerce of items such as pork and beef products as well as canola. All parties would protect supply management, except the People’s Party of Canada, intent on gradually phasing out the system.

DID YOU KNOW?

According to research produced by Innovation, Science and Economic Development Canada in 2015, 6% of co-operatives exported goods outside of Canada, and of these: 96% did so to the United States, 32% to Europe, 40% to Asian countries (16% of which is China) and 20% to Latin America.

Childcare

Childcare affordability is an important topic for Canadians. The commitments made to date by the Liberals, NDP and Greens reflect a desire to address this challenge. The Liberals would increase the Canada Child Benefit by 15%, cut childcare program fees by 10% and create 250,000 new spaces. The New Democrats have promised at least 1B$ in affordable not-for-profit daycare per year and 500,000 new childcare spaces, as well as a national nutrition program. The Greens have stated their vision for a universal childcare program and would put a focus on creating spaces in workplaces. The Conservatives would focus on fitness and arts credits for children, as well as making maternal and parental benefits tax free.

IMPACT ON CO-OPERATIVES

Any electoral-result scenario should translate into increased funding or measures for childcare. This will create opportunities to establish more childcare co-operatives, where parents are members and involved. At this time, more than 33,000 families are members of a co-operative daycare or pre-school.

DID YOU KNOW?

CMC, in co-operation with the Canadian Child Care Federation and la Commission nationale des parents francophones, just completed a study of childcare challenges facing Canadians, including affordability and accessibility of care, and quality assurance of services. The co-operative model and sharing services serve Canadians well, lowering the average cost of childcare in Canada (currently approximately $1,300 per

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child per month) and increasing spaces in regulated or licensed childcare facilities across Canada (currently limited to approximately 25% of children).

Healthcare

Healthcare and more specifically pharmacare, have been widely discussed in the election. The parties have diverging views on the best way to improve health care access and quality of care for Canadians. The Liberals, New Democrats and Greens would implement national universal pharmacare. New Democrats would also widen healthcare coverage to include mental health, dental, eye and hearing, while the Greens would bring in dental care for low-income Canadians. The Conservatives would maintain the current

levels of Shared Health Priorities funding for mental health and home care, and would earmark $1.5B for new medical imaging equipment. The People’s Party would like to see more private healthcare options as part of a fully provincial mandate.

IMPACT ON CO-OPERATIVES

Co-operatives and mutuals who provide health insurance coverage would be impacted by changes to national programs and would be important stakeholders in these talks. At the same time, co-operatives who offer employees benefits and home services could also be affected financially by these changes.

DID YOU KNOW?

The shortage of doctors has been an issue in Canada since the 90s. Co-ops as a social economy model are a proven solution, as evidenced by the more than 100 health co-operatives that can now be found across the country.

Job Creation

There are various proposals related to workforce capacity and jobs. Among them, the Liberals, NDP and Greens have promised a federal minimum wage of $15 per hour. The Conservatives would create jobs through a National Energy Corridor and by promoting interprovincial trade. The Liberals would extend Employment Insurance and offer benefits to seasonal workers. The Greens would cancel the Temporary Foreign Worker Program (in favour of more permanent immigration).

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The NDP would, among other priorities, ban unpaid internships and require professional development training for employees, equivalent to one percent of payroll. The Greens have also pledged to ban unpaid internships. The Bloc is focused on protecting corporate entities from foreign ownership whereas the People’s Party proposes to create jobs through the elimination of supply management.

IMPACT ON CO-OPERATIVES

The question of a mandated minimum wage is a source of vigorous debate among economists, academics, and around kitchen tables. Increasing the minimum wage is intended to reduce income inequality, stimulate the economy, and reduce taxpayer-funded assistance programs. The opposing view points to price hikes and the elimination of jobs. Currently, 8% of Canadians earn minimum wage according to the Bank of Canada. Many of these jobs are in retail services, food services, agriculture and other industries where co-operatives are present. As co-operatives are autonomous, self-help organisations, a participatory decision-making environment can help balance profit with social purpose.

DID YOU KNOW?

Co-operatives play a key role in job creation and community economic development in Canada. CMC is therefore advocating that the Government ensure that programs and agencies aimed at enhancing job creation and community economic development be fully accessible to co-operatives and mutuals. The challenges faced by co-operative businesses were reflected in the experiences of many of our members and the Government’s own report, entitled What We Heard: Motion M-100.

In relation to the Bloc’s concerns, co-op businesses, due to their legal ownership structure, cannot be bought by foreign interests.

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Corporate Taxation, Business Practices and Innovation

Except the Bloc and People’s Party, the parties have made policy commitments to Canadian small businesses. The Liberals and Greens have pledged to keep the small business tax rate at 9%. Conservatives would support small businesses by repealing the last tax reform (particularly as it pertained to taxation on savings and spousal contributions). They would also simplify the tax system. The Greens share the latter view and would put a small business lens on government decisions.

The NDP would return net corporate tax rate, currently at 15%, to its 2010 level of 18%. The Greens would increase the rate to 21%.

The parties have also made commitments related to innovation and technology development. For instance, the Liberals have committed to incentives for start-ups and would halve corporate taxes for businesses developing zero emissions technologies. The NDP has committed to sector-particular investment in research and development.

IMPACT ON CO-OPERATIVES

Co-operatives could obviously be affected by any change in income tax treatment and it is incumbent that the sector be consulted on any proposed changes.

DID YOU KNOW?

CMC is advocating for the renewal of the Tax-deferred Co-operative Share Program and to ensure that all qualifying co-operative businesses remain eligible for the Small Business Deduction (SBD), as per the precedent set for farming and fishing co-operatives.

"The Conversion to Co-operatives Project" (Co-opConvert) is a Social Sciences and Humanities Research Council of Canada (SSHRC) funded collaboration between the University of Toronto’s Ontario Institute for Studies in Education (OISE), the Institut de recherche et d’éducation pour les coopératives et les mutuelles de l’Université de Sherbrooke (IRECUS) and Co-operatives and Mutuals Canada. The research team is currently doing case studies and building tools to encourage business owners to consider co-op conversions as a succession planning solution. Less than 25% of the current 500,000 retirement-aged

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Small and Medium Enterprise (SME) owners have a succession plan in place, a major challenge facing Canada’s 1.17M SMEs and a risk for the communities in which they operate.

Climate Change, Carbon Tax and Pipelines

The various parties are committed to meeting (Conservatives and the Bloc) or exceeding (Green, NDP, Liberals) the Paris Agreement’s Green House Gas emission (GHG) targets. Many of the strategies aim to promote the adoption of electric vehicles. The notable exception is the People’s Party, which would withdraw Canada from the Paris Accord, oppose subsidies for zero-emission vehicles and defer climate change responsibility and voluntary solutions-finding to the private sector.

The Liberals, New Democrats, Bloc Québécois and the Greens are favorable, in various iterations, of a carbon tax program. The Conservatives would eliminate the latter and rather focus on polluter-funded green technology development and leveraging private investments as venture capital. The People’s Party would defer to province-led voluntary emissions reduction programs.

Pipelines remain a divisive topic. The Liberals are supportive of Keystone XL, LNG and Trans Mountain pipeline; however, they cancelled the Northern Gateway and modified the Energy East Pipeline approval criteria, leading to its cancellation in 2017. The New Democrats, Green Party and Bloc are against new pipelines, while both the Conservatives and People’s Party are interested in expanding the oil and gas sectors and are willing to use constitutional authority to do so.

IMPACT ON CO-OPERATIVES

It is a fact that co-operative businesses, their members and employees are going to be affected by climate change.

In terms of the carbon tax, the current federal plan would impact co-operatives involved in fossil fuel-related activities in Ontario, Manitoba, Saskatchewan and New Brunswick, and is due to be in force in Alberta in January 2020. The remaining portions of the country are provinces and territories with their existing carbon-pricing plans.

The pipeline debate touches on co-operatives operating in many industries, not just those involved directly in fossil fuels. This includes transportation, manufacturing, housing, farm machinery, retail and many more activities related to day-to-day living. There is a growing interest in renewable energies across the globe and Canada is no exception. Therefore, it is incumbent on co-operatives to find, modify or create energy solutions through innovative technologies.

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DID YOU KNOW?

CMC produced a video on the sector’s contribution to Sustainable Development Goals (SDG), that has been co-branded for several members, and is being disseminated nationally and internationally. A study is underway to help measure the sector’s contributions to the SDGs. The latter is just beginning and is actively seeking co-operative participants. CMC was also present at the recent Global Compact Network Canada Summit and is a member of the Alliance 2030, which informs the awareness, measurement and mobilization strategy for the co-op sector in relation to SDGs.

Co-operatives are established and emerging energy sector leaders. For example, the Federation of Alberta Gas Co-ops Ltd provide 90% of the natural gas supply to Alberta’s farmers, Federated Co-operatives Ltd operates one of Canada’s largest integrated petroleum refining and upgrading complexes (for which it recently won the 2019 Watershed Stewardship Award), while Coop Carbone identifies, develops, finances and deploys GHG emission reduction projects.

As a point of note, the seventh Co-operative Principle, Concern for Community, was championed by the Canadian Ian MacPherson (1929-2013), Professor and Former President the Canadian Co-operative Alliance (now CMC). It states that Co-operatives work for the sustainable development of their communities through policies approved by their members.

Indigenous Peoples

The federal parties have differing views on how best to engage with Indigenous peoples, but they have all stated their interest in improving on the status quo. The New Democrats, Liberals, Greens and Bloc have committed to implementing the UN Declaration on the Rights of Indigenous peoples, while both the Conservatives and People’s Party see energy resources as key economic drivers and opportunities for Indigenous peoples. The Conservatives would review the Indian Act and modernize governance oversight to reduce reliance on federal administration in favour of Indigenous Leadership. The Liberals, New Democrats, Conservatives and People’s Party are committed to addressing long-term

drinking water advisories. The Liberals have committed to a 5% federal procurement of Indigenous-owned businesses, the New Democrats are committed to an action plan and council based on the Truth and Reconciliation Commission’s report, and the Green Party would like to replace the Indian Act and focus resources on land claims, education and the implementation of the Missing and Murdered Indigenous Women and Girls Inquiry.

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IMPACT ON CO-OPERATIVES

Any commitment aimed at providing more opportunities and resources to Canada’s First Nations, Inuit and Métis communities is welcome. Co-operatives principles and the community-focused business model align well with Indigenous values and decision-making practices. Indigenous-led co-ops have thrived in many communities, as evidenced by the success of entities such as Arctic Co-operatives Limited, Fédération des coopératives du Nouveau-Québec, as well as Co-operatives First.

DID YOU KNOW?

Lou Hammond Ketilson and Ian MacPherson published, through the University of Saskatchewan in 2001, a key reference document entitled A Report on Aboriginal Co-operatives in Canada: Current Situation and Potential for Growth.

What comes after the election?

CMC will continue to advocate on behalf of the sector. To do so, we will build relationships with elected or re-elected officials, their staff and the senior members of the public service. This will support our advocacy efforts and help identify opportunities to build sector advocacy through government programs.

Among our priorities, we will:

1. Implement a strategy based on the feedback from member consultations and ensure that CMC is aware of the needs, responses and positions taken by our members.

2. Encourage the Government to involve co-operative businesses in the implementation of its various mandates, from those given to Ministries such as Industry, Science and Economic Development (ISED) and Employment and Social Development Canada (ESDC), to specific initiatives such as the Rural Economic Development Strategy, the Youth Employment Strategy and the Social Finance Fund.

3. Advocate for the renewal of the Tax-deferred Co-operative Share Program and that all qualifying

co-operative businesses remain eligible for the Small Business Deduction (SBD).

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4. Work with our members and the various parties to identify co-op champions, to increase awareness of co-operatives and mutuals on Parliament Hill, while encouraging the re-establishment of the All-Party Co-operative Caucus.

5. Invest resources in our database of co-operatives in Canada, which will help with outreach activities, member services and engagement efforts with Government. This will also provide provincial and riding specific data, which can be used by CMC and its members when engaging with Parliamentarians.

For the party platforms, please click the hyperlinks below: • Bloc Québécois (French only) • Conservative Party of Canada • Green Party of Canada • Liberal Party of Canada • New Democratic Party • People’s Party of Canada