Co-operatives serve as a stabilizing force against economic challenges

Those within the co-operative sector know that co-operatives serve as a stabilizing force against economic challenges, including those from tariffs. By promoting local economic resilience, diversification of markets, and a focus on long-term community well-being rather than short-term profits, co-operatives help mitigate the risks posed by trade disruptions and support a more sustainable economic model. 

Co-operative businesses in Ontario could provide significant support to the economy during the unpredictability of tariffs imposed by the U.S. in several ways: 

1. Increased Local Resilience and Self-Reliance: Co-operatives, being locally owned and operated by their members, tend to focus more on serving the needs of their community with shareholders who are typically residents of Ontario. During a trade war, this local focus can help reduce dependence on foreign markets, like the U.S., when they impose tariffs or other trade restrictions. Their economic activities would be directed toward local needs, creating more self-reliant communities. 

2. Economic Stability and Employment: Co-operatives typically prioritize stability for their workers and members. In times of threatened tariffs or economic uncertainty, they are less likely to lay off workers compared to traditional businesses focused on maximizing profits. This stability can support the local economy by keeping employment levels high, increasing buyer confidence, and reducing the costs of job loss. 

4. Reinvestment in Local Communities: Profits from co-operative businesses are often reinvested into the local economy, rather than being distributed to external shareholders. In difficult economic times, this reinvestment can support community development, infrastructure, and services, all of which help to stimulate economic growth from within the province. 

5. Collective Bargaining Power: Co-operatives, their federations and networks, work together giving them stronger collective bargaining power in negotiating better terms for goods, services, and even in dealings with governments. This collective strength can be especially useful when facing external pressures such as tariffs or trade restrictions. 

6. Reduced Corporate Control and Vulnerability: Many large corporations may relocate or adjust their operations due to tariffs or trade barriers, leading to economic disruptions and job loss. Since co-operatives are member-owned and community-focused, they are less likely to be swayed by the financial pressures that shareholder corporations face. This can lead to greater economic stability in Ontario during uncertain times. 

7. Innovation and Adaptation: Co-operatives often foster innovation driven by the collective knowledge and shared goals of their members. In the context of a trade war, co-operatives could innovate in new ways of meeting local demand or improving production efficiency, ensuring that Ontario businesses stay competitive despite the tariffs. 

8. Affordability for Ontarians: Non-profit housing co-operatives are a largely untapped part of the solution to Ontario’s housing crisis. Co-op housing creates lasting communities, economic prosperity and a stable foundation for people to call home. In the context of a trade war and ensuing economic disruption, building new co-op homes would increase Ontario’s economic productivity all the while maintaining vital residential construction industry jobs and supporting local supply chains during a time of retrenchment in the private sector. This approach is not new. It is an economic lever that was last deployed by the federal government during the 2008 recession to successfully boost the economy while creating lasting community assets. 

Co-operatives are positioned to support local economic development and build a better Ontario. So much so, that the United Nations has named 2025 the International Year of Co-operatives for the second time. 

By ensuring that co-operatives are considered as part of the solution when governments implement new plans and policies, they can empower local economies, foster job creation, and align with the values of sustainability and shared prosperity in Ontario.

This article was submitted by Jennifer Ross, Executive Director, and was adapted from a letter written to Doug Ford after his recent re-election.