Government policies which can promote the development of new and emerging co-operatives and are particulalrly needed in a period of economic recesssion. This paper will examine the Canadian expeience including the last six years of the Co-operative Development Initiative (CDI), a major partnership program funded by the federal government and managed in large part by the two national co-operative umbrella organiations, the Canadian Co-operative Association and the Conseil canadien de la cooperation et de la mutualite.