SME Profile: Financing and Growth of Co-operatives in Canada, 2017

This publication is available online at

To obtain a copy of this publication, or to receive it in an alternate format (Braille, large print, etc.), please fill out

the Publication Request Form at or contact:

Web Services Centre

Innovation, Science and Economic Development Canada

C.D. Howe Building

235 Queen Street

Ottawa, ON K1A 0H5


Telephone (toll-free in Canada): 1-800-328-6189

Telephone (international): 613-954-5031

TTY (for hearing impaired): 1-866-694-8389

Business hours: 8:30 a.m. to 5:00 p.m. (Eastern Time)


Permission to Reproduce

Except as otherwise specifically noted, the information in this publication may be reproduced, in part or in whole and by any means, without charge or further permission from the Department of Industry, provided that due diligence is exercised in ensuring the accuracy of the information reproduced; that the Department of Industry is identified as the source institution; and that the reproduction is not represented as an official version of the information reproduced or as having been made in affiliation with, or with the endorsement of, the Department of Industry.

For permission to reproduce the information in this publication for commercial purposes, please fill out the Application for Crown Copyright Clearance at or contact the Web Services Centre mentioned above.

© Her Majesty the Queen in Right of Canada, as represented by the Minister of Industry, 2019.

Aussi offert en français sous le titre Profil des PME : Financement et croissance des coopératives au Canada, 2017.

Written by: Adrian Egbers, Lucas Rivet-Crothers and Lyming Huang


This report summarizes findings from the 2017 Survey on Financing and Growth of Small and Medium-sized Enterprises to offer a snapshot of the financing and growth activities of co-operatives corporationsFootnote 1 in Canada.

In Canada, there is a well established co-operativeFootnote 2  business sector, yet there has been little data to help understand the financing, growth, procurement, innovation and exports of co-operatives, as well as the obstacles they face. The 2017 Survey on Financing and Growth of Small and Medium-sized Enterprises is an effort by Innovation, Science and Economic Development Canada to provide more concrete data and analysis on co-operatives, and this profile highlights key data points to better understand how they operate in and contribute to the Canadian economy.Footnote 3

As outlined in this profile, the survey data returned some interesting financing and growth trends of the co-operative sector in Canada. For instance, the co-operatives that responded to the survey demonstrated this business sector seeks more external financing than SMEs and generally have higher financing approval rates. Debt financing is the most prevalent form of capital that co-operatives are seeking, mostly in the form of term loans used for working capital.

Co-operatives have high growth projections, including intentions to expand to new markets, over the next three years and are more likely than SMEs to develop a new innovation. Co-operatives also have diverse ownership, with a strong percentage of the businesses owned by women and Indigenous Peoples, and are very mature with an average business age of 43.7 years.

The following sections of this profile provides more details of how co-operatives are accessing financing, growing and innovating across Canada.


More co-operatives request external financing than SMEs

finance related icon (dollar sign)
In 2017, 64.9% of all co-operatives requested external financing for their businesses, compared to 47.1% of all SMEs. Overall, co-operatives were authorized for over $389 million in 2017 when adding all the financing types together.

In 2017, 64.4% of co-operatives that received debt financing received it from credit unions and caisses populaires, 27.3% from domestic chartered banks, and 20.2% from a government institution.Footnote 4 By comparison, 69.9% of the SMEs that made a request for external financing received financing from domestic chartered banks, 8.7% from government, and 23.6% from credit unions.

finance related icon (symbol of co-operation)
Co-operatives had generally higher financing approval rates than SMEs, with an approval rate of 95.0% for debt financing, 100% for trade credit,Footnote 5 and 84.1% for government financing. By comparison, SMEs' approval rates for these financing types were 89.2%, 98.9% and 76.6%, respectively.

Both co-operatives and SMEs primarily rely on debt financing and trade credit

More co-operatives (38.1%) relied on debt financing (non-residential mortgages, line of credits, term loans and credit card) than SMEs (25.6%). Co-operatives and SMEs relied on trade credit and lease financing in similar numbers, but co-operatives relied more heavily on equity financingFootnote 6 and government funding than SMEs.

Figure 1: Financing type

Bar chart illustrating financing types of SMEs and co-operatives (the long description is located below the image)
Description of Figure 1
Financing Type
  Debt Financing Lease Financing Trade Credit Equity Financing Government Funding
SME 25.6% 7.2% 25.7% 0.8% 3.7%
Co-operative 38.0% 6.4% 30.5% 7.2% 15.6%

In 2017, co-operatives secured over $262 million in debt financing. Co-operatives were getting the largest amount of debt financing from term loans ($118.6 million), followed by lines of credit ($87.7 million). The majority (55.8%) of co-operatives' intended use of this debt financing was for working capital.

Growth and Innovation

Co-operatives expect to grow and expand sales

Icon image of line chart
In the last three years, 57.6% of co-operatives experienced growth between 1 to 10%, and 7.5% of co-operatives experienced growth between 11 and 20%. Moreover, co-operatives seem to have confidence in the road ahead as, over the next three years, 63.4% of the co-operatives expected to grow between 1 and 10%, and 9.9% of co-operatives expected to grow between 11 and 20% a year.

Icon image of procurement agent
The majority of co-operatives, nearly 88%, simply indicated that the federal government was not a potential client. Although there is no further questions that explored this element, it is likely because these co-operatives are focused on meeting the needs or their members, which are often also their main customers and clients (e.g., retail co-operatives). Three percent of co-operatives and 3.3% of SMEs indicated making 1 to 10% of all their sales through federal government procurement. Only 0.5% of co-operatives and 0.8% of SMEs indicated making 11% to 50% of their sales through federal government procurement. Few co-operatives were unaware of contracting opportunities (3.0%) or indicated that the application process was too complicated (3.9%).

Icon image of plane in flight
 Forty-six percent of SMEs and 48.9% of co-operatives had intentions to expand sales to new markets over the next 3 years. While the US is the primary market that both SMEs and co-operatives expected to expand into, co-operatives particularly targeted the UK, Europe, Japan and Latin America.

Figure 2: Intention to expand by destination

Bar charts illustrating Intention to expand by destination for SMEs and co-operatives (the long description is located below the image)
Description of Figure 2
  US UK Europe (excluding UK) Latin America (excluding Brazil) Japan
SME 89.3% 28.8% 36.1% 17.7% 18.0%
Co-operative 91.1% 51.4% 69.3% 27.9% 33.2%

Co-operatives are drivers in innovation

human figure icon
Co-operatives are innovative businesses. Forty-two percent of co-operatives had developed at least one type of innovation, while 31% of SMEs had developed at least one. In addition, 25% of co-operatives had developed a new or significantly improved good or product, compared to 19% of the SMEs surveyed.

Co-operatives are also more likely to adopt a new technology than traditional SMEs. Fifty-three percent of co-operatives adopted at least one new technology over the last three years compared to 46.3% of SMEs. Data analytics (29.3%) and cloud computing (25.4%) were the technologies that co-operatives were most likely to adopt.

Co-operatives face some obstacles to growth

human figure and key icon
A significant proportion of co-operatives indicated that increasing competition (74.5%) and rising cost of inputs (70.1%) were obstacles to growth. Over 60% of all co-operatives pointed out that recruiting and retaining skilled employees (64.5%) and fluctuations in consumer demand (64.4%) were obstacles to growth.

In contrast, over 40% of co-operatives indicated that shortage of labour (46.0%), maintaining cash flow (40.8%), and the corporate tax rate (48.1%) were not obstacles to growth; 50.6% indicated that government regulations were not an obstacle to growth; and, 63.3% indicated that obtaining financing was not an obstacle to growth.

Business Characteristics

Co-operatives are diverse businesses with strong female, aboriginal, and francophone presence

human figures icon
 Co-operatives and SMEs have similar proportions of businesses that are majority female owned businesses (around 15%), majority male owned businesses (around 60%), and businesses with equal female and male ownership (around 20%). However, over 50% of SMEs, regardless of size, have no female ownership. In contrast, only 18.1% of co-operatives have no female ownership.

Figure 3: Ownership base

Bar charts illustrating ownership base for SMEs and co-operatives (the long description is located below the image)
Description of Figure 3
Ownership base
  Majority Male Equal Ownership Majority Female
SME 63.5% 20.9% 15.6%
Co-operative 60.5% 23.3% 16.2%

human figure icon
In 2017, 6.8% of co-operatives were majority aboriginal owned businesses, compared to 1.4% of all SMEs.  As well, 47% of the co-operatives surveyed indicated that the primary decision maker's mother tongue was French, compared to 21% for all SMEs.Footnote 7

Co-operatives tend to be more mature businesses, but fewer are created

data chart icon
With nearly 71.0% of all co-operatives over 20 years old, the survey shows that co-operatives are stable and long-term businesses. The corresponding number for SMEs is 31.3% that were 20 years or older. In addition, the average age of co-operatives was 43.5 years compared to 16.7 years for all SMEs

Co-operatives may well remain anchored in the Canadian landscape as 91% of the co-operatives surveyed indicated they had no intention to sell, transfer, or close their business in the next five years, as opposed to 70.7% of SMEs that have no intention to sell, transfer or close.

However, the survey also shows fewer co-operatives were created than SMEs. As little as 1.7% of the co-operatives surveyed had been in business for under 2 years, compared to 9.5% for SMEs. In addition, only 26.6% of co-operatives were between 3 and 20 years old, when nearly 60.0% of all SMEs were in that age tranche.

Figure 4: Business Age

Bar charts illustrating business age for SMEs and co-operatives (the long description is located below the image)
Description of Figure 4
Business Age
  3–10 years 10–20 years >20 years
SME 9.5% 33.3% 26.0% 31.0%
Co-operative 1.7% 13.7% 13.9% 70.7%

Data & Methodology

The data in this profile is collected from the 2017 Survey on the Financing and Growth of Small and Medium-sized Enterprises. The survey focused on SMEs that generated over $30,000 in annual gross revenue and that employed between 1 and 499 employees and a special sample frame of co-operatives were included. The total sample frame was 617 co-operatives, of which 399 responded to the questionnaire, resulting in a 78% response rate compared to a 59% response rate for all SMEs. For more information on the survey questionnaire and methodology, please click here.

A co-operative must be incorporated under specific provincial, territorial or federal co-operative corporate Acts. Co-operatives have many similarities and differences to regular corporations. In order to better understand these differences, please visit the how is a co-operative different from other business forms as well as the Information Guide on Co-operatives.

Please note, co-operatives were also included in the 2014 Survey on the Financing and Growth of Small and Medium-Sized Enterprises. You can see a see a complete 2014 profile here.