A tax deduction for investments in co-operatives is on the Canadian Federation of Agriculture’s list of recommendations for Finance Minister Jim Flaherty’s Feb. 26 budget.
A co-operative investment plan, as proposed by the CFA, would give co-op members and workers a tax deduction if they choose to invest capital in the co-op. Such a plan would cost Ottawa $17 million to $20 million per year in tax revenue, the CFA estimated in a release Friday.
“Across Canada there are more than 1,300 agricultural co-operatives, employing 36,000 people, generating over $19 billion per year in revenue and channeling some $1.6 billion producer re-investment in the industry and rural communities,” the CFA wrote.
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“However, with little to no access to outside capital and the inability for co-op share capital to appreciate, co-operatives face disadvantages compared to private firms in raising capital.”
Quebec’s provincial government has long offered such a deduction, which CFA said has generated just under $400 million in new investments in that province in the past 10 years.
CFA’s other recommendations include allocating financial support to the livestock industry, establishing a “Grown in Canada” food label system and committing “adequate” funding to the programs currently being developed under the “Growing Forward” agricultural policy framework.
