How Employee Ownership Trusts keep wealth in Canada | Canadian Business
By Jon Shell | Part of our Special Series: The Ownership Solution | This post first appeared in Canadian Business
Canada is entering one of the largest waves of business succession in its history, with thousands of founders preparing to retire. A 2023 report from the Canadian Federation of Independent Business (CFIB) report found that about three-quarters of Canadian small and medium-sized business owners, controlling more than $2 trillion in business assets, plan to leave their companies within the next decade. The question isn’t whether these companies will be sold, but who will own them and where the benefits will flow.
For decades, many retiring business owners sold their companies to private equity or foreign buyers. Today, however, the shifting political and economic climate in the United States is prompting some Canadian owners to rethink the implications of such sales. In a period of volatility and rising economic nationalism at home, ownership is critical in shaping company decisions, directing capital and determining whose interests drive a business’s future.
As chair of Social Capital Partners (SCP), a non-profit organization focused on broadening access to wealth and ownership, I have advocated for solutions that keep ownership in Canadian hands while benefiting employees. One of the most practical tools to achieve this is Employee Ownership Trusts (EOTs), which lets business owners sell a majority stake to a trust holding shares on behalf of employees, without requiring them to invest their own money. The trust typically finances the purchase through a mix of bank and owner loans, repaid over time from the company’s future profits. As the business grows, employees share in the financial success, gaining ownership without taking on personal risk.
EOTs were established in the United Kingdom in 2014, providing business owners a practical way to transfer ownership to employees while protecting jobs, company culture and local roots. The model was designed to support business succession and keep companies within their communities. In Canada, federal legislation for EOTs arrived in June 2024, offering a similar solution to succession challenges and a path to strengthen communities through local employment.
Early signs show they are already having a positive impact. Grantbook, a Toronto-based strategic technology consultancy, became the first Canadian company to transition to an EOT last year. Another example is Taproot, a social services organization with 750 employees serving individuals, families and youth across British Columbia, Alberta, and Ontario. Its leadership chose to transfer ownership to employees rather than sell to an outside buyer, preserving the organization’s mission, keeping it under Canadian control, and giving frontline workers a stake in its long-term success. One employee described it as the first time she had truly owned anything in Canada–an immigrant who built her career here, she suddenly held a stake in the company she helped grow. This isn’t purely symbolic–it’s real wealth creation.
Research shows that EOTs are also a sound business strategy. Research by Harvard Business School shows employee-owned firms often see higher productivity, stronger retention and greater resilience during downturns. When employees have a vested interest in the company’s success, they are more engaged and productive. These firms also default less on loans and lay off fewer workers during recessions. EOTs can work for many industries, but they are best suited to mature, cash-flowing sectors, such as professional services, manufacturing, wholesale and construction, where stable profits make it easier for the trust to finance the purchase and repay the seller over time.
In June 2024, the federal government took a step forward by introducing a temporary $10 million capital gains exemption for qualifying sales to EOTs, available through 2026. But for the policy to drive growth, the market needs certainty. Its imminent expiry, after being in effect for less than three years, is preventing the expansion seen elsewhere. The government must act quickly to make the incentive permanent, providing a clear path for employee ownership to contribute to a stronger, more productive economy.
Experience abroad shows that stable, predictable incentives are key to growing employee ownership over the long term.
In the United Kingdom, significant tax incentives have helped employee ownership grow steadily since 2014, with around 2,470 companies now using EOTs. In the U.S., long-standing government support for employee ownership has led to more than 6,400 companies with Employee Stock Ownership Plans (ESOPs), where employees gradually acquire shares, often funded by profits or loans. These examples show how sustained policy can grow employee ownership.
EOTs may not be suitable for every company. Transitions typically take a year or more and require careful financial planning, including financing the trust. Policy uncertainty compounds the challenge–many owners hesitate to begin a transition with the capital gains exemption set to expire at year’s end. Alongside some of Canada’s top business leaders and CEOs, we’re actively advocating for Ottawa to create a solid runway for EOTs to take off in Canada by making this vital tax incentive permanent.
As uncertainty in the U.S. continues to shape capital markets and political debate, Canadian business owners are increasingly aware of the consequences of foreign ownership. When companies are sold abroad, key decisions about investment, hiring and growth are often made elsewhere, weakening local control and community ties. Employee ownership provides a distinctly Canadian alternative.
The coming wave of succession will shape Canada’s economy for generations. Employee ownership safeguards economic sovereignty, while boosting growth and productivity and giving employees struggling with affordability a new source of income. As owners seek alternatives to selling abroad, the EOT provides a practical answer. Instead of letting support lapse, now is the time for the government to double down on employee ownership.
A housing boom isn't a win for wealth equality and here's why
I published Billionaire Blindspot in 2024 to draw attention to the poor state of wealth inequality data in Canada and to dispel the intuition Canadians have that we are a much more egalitarian society than our U.S. neighbours. In putting it together, I couldn’t draw on a lot of recent research in the Canadian wealth inequality space because, well, it didn’t exist.
Since then, we’ve witnessed something of a renaissance in the wealth inequality discourse, with great contributions by Alex Hempel, Silas Xuereb and Alex Hemingway, updates from the Office of the Parliamentary Budget Officer (PBO) and an exciting attempt at a new methodology by StatsCan to ascertain how much of our nation’s wealth is held by the very richest families.
These reports are often in conversation with one another, debating methodology and assumptions. I don’t always have much to contribute to those debates; I am mostly just glad to see they’re taking place.
But there’s one finding that’s stuck with me I’ve been wanting to explore in more in depth: the reported decline in wealth concentration of the richest families between 2016-2023, observed by Silas and Alex in The new robber barons: A quarter century of wealth concentration in Canada.
As you can see in their graph, there’s a noticeable dip in the last two data points correlating to 2019 and 2023. On first glance, it looks like the rich got a bit less rich, but that doesn’t really make sense when taken against other trends and measures in our economy. So, what’s going on here? Silas and Alex have a theory, and I think they’re on to something:
“… Another indicator is the trajectory of housing prices. During the pandemic, housing prices increased drastically, inflating wealth for many homeowners. Housing prices began to flatten in 2022 and were actually lower in July 2025 than they were in July 2023, suggesting that the wealth of most households has increased little over this period compared to the rising wealth of billionaires, which is mostly financial wealth,” they write.
To understand what’s actually driving the dip, you need to start with what each group holds. As they point out, typical Canadian families hold the vast majority of their wealth in one asset: their home. The ultra-wealthy hold most of theirs in financial assets like equity in private and public companies. Typically, the financial assets of the wealthy significantly outperform those of ordinary Canadians – which is how we get runaway inequality. During the pandemic years, we witnessed something very unusual instead.
During the pandemic housing boom, national average home prices surged from roughly $504,000 in early 2020 to a record $816,720 in February 2022, according to CREA — a gain of approximately 62% in under two years. Over roughly the same period, Canadian billionaire wealth grew by about 57%, according to Oxfam Canada. For a brief and unusual window, ordinary Canadian homeowners roughly kept pace with — and by some measures outpaced — billionaires!
That role reversal, very rare by any historical measure, is almost certainly what drove the richest families’ share of total wealth temporarily downward. Again, their total wealth didn’t go down, but their proportion of all the wealth in Canada, compared to other groups, did.
Here is where the story gets more complicated. The underlying data for Silas and Alex’s chart comes from Statistics Canada’s Survey of Financial Security (SFS), which runs periodically. According to Statistics Canada’s documentation, the 2019 survey ran September to December under the standard collection window, while the 2023 survey ran April 21 to August 31—an earlier-than-usual window adopted following changes made during the pandemic. This means the height of the housing boom—the surge to $816,720 and subsequent softening—happened entirely in between the two survey periods. No SFS survey captured the peak at all. The dip Silas and Alex observe is therefore real, but it’s measuring the echoes of the boom rather than the boom itself, and it almost certainly understates how dramatically the richest families’ share of total wealth shrank at the actual peak.
There’s a second methodological wrinkle worth flagging that mitigates the significance of the first. The SFS doesn’t use assessed or appraised values for housing. Rather, it asks respondents a single question: “How much would this property sell for today?” StatsCan itself acknowledges that this self-assessment is “subject to a large variance.” Research consistently finds that homeowners overestimate their home values on average, and that price volatility makes accuracy worse, with homeowners specifically tending to overestimate when local prices have recently fallen. The spring and summer of 2023, when the survey was in the field, was exactly that environment: a market that had dropped sharply from its 2022 peak, but with respondents who had spent two years watching neighbours sell for outrageous sums. The anchoring effect of those boom-era prices on self-reported valuations was likely substantial, meaning the 2023 SFS housing wealth figures are probably somewhat overstated relative to where the market had actually settled. The dip in Silas and Alex’s chart may be partly a measurement artifact as much as a real economic phenomenon.
None of this invalidates their finding—the PBO independently confirmed the drop in the richest families’ share of total wealth from 2019 to 2023 is statistically significant but they were using the same SFS data as Silas and Alex did as their baseline. What this does suggest is that the magnitude of the dip, even measured after house prices had already fallen significantly from their 2022 highs, is smaller than the chart implies—and the wealthy are already pulling ahead again. As Silas and Alex themselves note, between July 2023 and July 2025, Canadian billionaire wealth grew 37.2% while total household wealth grew only 9.3%.
Normally, a dip in the richest families’ share of total wealth would be welcome news. But when I look under the hood at what drove this one, I find it hard to celebrate. It was built on a housing boom that temporarily inflated the one asset ordinary Canadians hold. More importantly, the same price surge that temporarily gave ordinary homeowners a larger slice of the pie was a central driver of the housing affordability crisis that has structurally reshaped who can and can’t build wealth in Canada.
For younger Canadians already squeezed by the cost of living, the pandemic housing boom wasn’t a wealth transfer in their direction. It priced them out of the primary vehicle through which most ordinary Canadians accumulate wealth, not to mention a key ingredient most of them seek to feel economically secure and start a family.
A temporary blip in wealth concentration driven by a housing boom that comes at the cost of the next generation’s economic future isn’t progress.
A Conservative case for Community Benefits Agreements?
When a developer builds a new transit line, bridge or hospital, a Community Benefits Agreement (CBA) ensures that the money spent on a large project doesn’t just produce a building, but also provides social and economic advantages to the people living nearby. In Canadian policy circles, CBAs are a file that comes across as relatively left-coded.
I interacted with the file during my time in government and took for granted that the mix of stakeholders involved were relatively progressive, and so were their proposals. Labour unions, local community groups and organizations representing historically marginalized groups all had prominent seats at the table.
And the community benefits they championed reflected that: hiring commitments targeting local workers and underrepresented groups, apprenticeship and training requirements tied to unionized trades and procurement conditions designed to steer contracts toward local and Indigenous-owned businesses. All legitimate goals, but ones that tend to load up a project with conditions before a single shovel hits the ground.
My mental model on the fate of CBAs was simple: a pendulum swinging back and forth. More activity and levers being pulled during NDP/Liberal governments, and a retrenchment or standstill when Conservatives took the helm.
A recent Substack post by Mitch Davidson, Ontario Premier Doug Ford’s former Executive Director of Policy, has me second-guessing that thinking entirely. Could there be an alternate vision for CBAs that aligns with Conservative governments? What if, instead of retrenchment, Conservative governments aggressively pushed forward their own CBA policies with different objectives and criteria? It’s an idea from an unexpected source, but one the traditional CBA stakeholder universe should spend more time thinking about.
Using the backdrop of a specific project, Newfoundland’s Bay du Nord deep-sea offshore oil project, Davidson sketches out a CBA framework that sidesteps what often aggravates the right: additional time delays and cost, unionization requirements and the picking of winners.
Two criteria seem to emerge from this approach. The first is that community benefits can’t seriously impede project delivery, a condition that cuts against some of the more process-heavy CBA frameworks progressives have championed. The second is a preference for long-term economic gains over short-term ones—durable industrial capacity rather than just construction-phase jobs.
In Davidson’s example, the Province of Newfoundland and Labrador opted to abandon previous CBA requirements focused on domestic manufacturing, instead conditioning support on helping the province acquire a floating dry dock facility, something with the potential to bolster the province’s economic fortunes well beyond the life of the project.
That first criteria should give Liberal and NDP wonks pause, because the CBA features they tend to care most about (local hiring commitments, unionization requirements and targeted procurement) are precisely the ones most likely to run afoul of it.
Canadians are losing faith in their governments. They don’t trust that there’s state capacity to deliver ambitious projects on time or on budget—and for good reason. CBAs aren’t the cause of this decline, but it’s difficult to argue with a straight face that poorly designed ones don’t contribute, at least on the margins.
That presents a real opportunity.
With Conservative governments in power across much of the country right now, CBA stakeholders who are willing to engage on these terms have more potential partners than the traditional pendulum model would suggest.
But there’s also a broader lesson here for those of us on the centre-left. Designing CBAs that prioritize delivery isn’t necessarily a concession to the right—it’s how you build the kind of track record that earns the public trust needed to do ambitious things in the first place.
Watch the video: EOTs in Canada - a new succession option for business owners with Jon Shell
What if employees could own the company they work for?
A growing model called employee ownership is gaining attention in Canada, and new research aims to better understand its impact. The Smith School of Business at Queen’s University has launched the Employee Ownership Research Initiative to study how this model works and how it could expand across the country.
In this episode of Moolala: Money Made Simple, Jon Shell, Chair of Social Capital Partners and board member at Employee Ownership Canada, joins Bruce Sellery to explain how employee ownership trusts (EOTs) work and why they could reshape business ownership in Canada.
They discuss:
➡️What employee ownership means and how it works
➡️The purpose of the new Employee Ownership Research Initiative
➡️Current research gaps around employee-owned businesses
➡️Plans to build a national database of employee-owned companies
➡️How employee ownership has evolved in Canada in recent years
This conversation explores how employee ownership could support business succession, strengthen workplaces and create new pathways for shared prosperity.
Speakers
Jon Shell
Chair, Social Capital Partners
Watch the video: The risks and benefits of opening up private markets to everyday investors
The Ontario Securities Commission wants to give retail investors access to private markets. But as SCP Fellow Rachel Wasserman, founder of Wasserman Business Law, tells BNN Bloomberg’s Andrew Bell, when you look closely, it starts to look less like democratization and more like offloading risk onto people with the least power to absorb it.
Private equity is already underperforming S&P index funds over 1, 5 and 10-year periods and PE’s biggest historical champions are quietly reducing their exposure. So, why would regulators suddenly be so eager to open the door for retail investors? This proposal to offer retail investors access to PE stands to benefit the asset managers and intermediaries, with everyday investors bearing the costs and risks. Financial inclusion does not mean broadening access to financial products that sophisticated players are already walking away from.
Speakers
Rachel Wasserman
Founder, Wasserman Business Law
Fellow, Social Capital Partners
Watch the video: Why do Canadians work so hard and get so little?
Low productivity means lower wages and a lower standard of living. Canada does need to boost productivity—but we keep trying the wrong things. Watch SCP CEO Matthew Mendelsohn explain the productivity conversation Canada actually needs to have.
Market study submission: Competition in financing for Canada's SMEs
Introduction
We are pleased that the Competition Bureau is undertaking a market study to improve its understanding of the competitive dynamics within Canada’s small- and medium-sized enterprise (SME) financing sector.
In our work, we’ve seen that SMEs face significant barriers to accessing capital and we believe that the lack of competition in the banking sector is one of several important contributing factors. We believe that unlocking capital for SMEs and entrepreneurs will strengthen the Canadian economy, bolster our sovereignty and provide more Canadians with pathways to building wealth. We look forward to seeing how the evidence collected can help inform policymakers interested in tackling this issue.
Context
Enterprise financing in Canada is dominated by a small number of big commercial banks. And while these banks are important institutions, they are structurally limited in who they can serve. Their capital allocation decisions are based on legislated mandates, guidelines from regulators, duties to shareholders and the culture of their institutions, collectively limiting capital deployment to a relatively narrow risk-return profile.
In a diverse financing ecosystem, different institutional types would serve different enterprise profiles. Some would be optimized for scale and efficiency, others for relationship lending, social impact or patient capital. But when six banks control the market, one institutional model’s blind spots become the entire system’s blind spots. The structural limitations of deposit-funded banking, amplified by oligopoly dynamics and shareholder expectations, define the boundaries of who can access credit in Canada. As a result, vast segments of Canada’s productive economy are systemically excluded from financing.
Barriers to accessing financing have negative repercussions for our economy. They weaken productivity and innovation, create barriers to entrepreneurship and concentrate economic power in the hands of those who already have wealth and can leverage their assets to get the financing they need.
In recent years, the federal government has been acknowledging problems with SME financing and has taken steps to address them.
These steps include:
- Making better use of public banks, like the Business Development Bank of Canada (BDC), to better support under-served entrepreneurs
- Exploring new guidelines and risk-weightings that would encourage big banks to lend more ambitiously to SMEs and entrepreneurs
- New open banking regulations that will make it easier for new entrants to compete with big banks
- Support for public-purpose and social-purpose enterprises by capitalizing the Social Finance Fund
- But, taken together, we believe these responses do not get to the systemic challenges inherent in Canada’s financing ecosystem.
The Competition Bureau’s market study represents an opportunity to address some of the structural weaknesses in Canada’s SME financing system. As Canada confronts profound disruptions in the geopolitical and economic environments, it is essential that we build a system to get more capital into the hands of Canadian enterprises who can deploy it in ways that boost growth, resilience, sovereignty and well-being.
How does Canada’s SME financing system stack up compared to our peers?
Canada’s financing ecosystem is unusually concentrated, with the six Canadian chartered big banks accounting for more than 93% of the Canadian banking system.
Unsurprisingly, these big banks provide nearly 70% of all debt financing to SMEs (including nonprofits, social enterprises and cooperatives) across Canada. Excluding Quebec, where credit unions have a stronger foothold, banks provide nearly 80% of SME lending.
Canadian big banks do a poor job of serving SMEs when compared to our peers. In 2021, only 11.3% of outstanding commercial lending was directed to SMEs, which is significantly below the OECD median of 44%.
Figure 1
Relatedly, between 2016 and 2022, the percentage of outstanding new loans held by SMEs dropped by 1.51 percentage points in Canada, whereas, on average across OECD countries, it increased by 1.26 percentage points.
These are not trivial numbers. At a time when entrepreneurship rates in Canada are plummeting despite a growing population, getting capital into the hands of Canadian entrepreneurs is widely recognized as an important national priority.
When SMEs can get financing, they face higher interest rates than their counterparts in peer economies, paying 6.21%, compared to the OECD median of 4.37%.
Figure 2
Despite the importance that access to capital plays in economic strength and resiliency, Canadian banks are notably risk averse compared to our peers. For example, Canadian banks have very low loan-loss rates (the percentage of a lender’s total loans that are not expected to be repaid) compared to our peers. Only Japan reports a lower rate.
Figure 3
Canadian banks are among the most profitable in the G7 across multiple measures. For example, their return on equity (a gauge of how much profit a company earns for every dollar of shareholder investment) is the highest in the G7.
Figure 4
In sum, Canada’s big banks do very well compared to those of our peers, while at the same time failing to serve the full range of SMEs very well. Canada’s banks are more profitable, while Canadian SMEs get fewer loans and pay higher interest rates than those of our peers. Many different kinds of SMEs are particularly poorly served:
- those seeking small amounts of financing
- those needing flexible terms
- those seeking social returns or public-purpose returns as well as financial returns
- rural and remote business
- those without collateral or asset-backing, including those with intangible assets
- those seeking financing for modernization and productivity-enhancing investments that will pay out over a longer time period
- SME acquisition by management, employees or co-ops
- those with non-traditional ownership structures, such as community ownership
Although it is likely beyond the mandate of the Competition Bureau’s present study, we note that while the lack of financing options creates challenges for many kinds of SMEs, these challenges are even more acute for not-for-profit enterprises.
Conclusion
An enterprise financing system dominated by big banks cannot and will not serve the full range of viable SMEs, which is a problem for the Canadian economy. Insufficient access to financing contributes to weak growth, low productivity, rising inequality and concentrated ownership of assets.
We are glad that the Competition Bureau is directing more attention to this issue. A robust and effective enterprise financing system is one with significant institutional diversity, not just in terms of size of the institution, but also in terms of mandate and governance model. While competition policy is not the only tool that is required to build this diversity, it is an important one.
As Canada confronts profound disruptions in the geopolitical and economic environments, it is essential that Canada enjoys a competitive and diverse enterprise financing system that gets capital into the hands of Canadian enterprises that can deploy it in ways that promote economic growth, resilience, sovereignty and well-being.
We commend the Competition Bureau for launching this study. We look forward to the research that will help clarify the nature and extent of the problem in Canada and highlight plausible pathways to cultivate the kind of institutional diversity that will unlock more capital and more financing options for Canadian SMEs.
Watch the video: Why would a company sell to its employees?
Canada is facing a $2-trillion business handoff. What if employees owned more of it? Our Director of Policy Dan Skilleter explains why a company would sell to its own employees, how it happens and who stands to benefits. Spoiler alert: employee-owned companies are shown to be 8-12% more productive, share more wealth with their workers, keep businesses Canadian-owned and shore up the resilience of local communities and the broader economy.
How Canada can curb the serial acquisitions quietly reshaping our economy
By Michelle Arnold and Kiran Gill | Part of our Special Series: The Ownership Solution
In recent years, Canadians have watched something change quietly in the economy around them. All of a sudden, there is upselling at the dentist, prices for veterinary care are higher than they used to be and the terms of a gym membership can change out of the blue, with no notice.
In many cases, these threats to day-to-day affordability are the byproduct of what competition experts call serial acquisitions—a pattern of larger firms buying up a series of smaller players to try and corner the market.
The smaller size of these individual transactions means they often fly under the radar of Canada’s Competition Bureau because they’re not big enough to trigger automatic scrutiny.
This makes serial acquisitions notoriously difficult for the government to detect and track, and even more challenging to curb.
The good news is that the Competition Bureau is aware of the negative impact of these quiet deals and is proposing updates to its Merger Enforcement Guidelines, which Social Capital Partners provided formal feedback on. The guideline updates clearly acknowledge the potential negative impacts of serial acquisitions.
This is real progress, reflecting years of advocacy across Canada by an array of organizations, including Social Capital Partners, and a growing recognition that competition policy must address how modern business consolidation actually happens.
But, these new guidelines will also inevitably act as an important test.
Because, while the new guidelines have been in the process of being updated, firms have quietly continued to buy up more companies in sectors across the country.
In 2025 alone, Neighbourly Pharmacy, which bills itself as “Canada’s largest and fastest growing network of community pharmacies,” announced the acquisition of 33 independent Canadian pharmacies. WELL Health expanded its footprint of independent health clinics again, following earlier waves of acquisitions. And U.S.-based AIR Control Concepts entered the Canadian HVAC market to buy up multiple businesses across Ontario and Atlantic Canada.
We can’t say for sure that any of these particular deals will have negative impacts on their customers or communities, but at a time when Canadians are having trouble making ends meet, the evidence shows that consolidations like these come with real risks to both quality and affordability.
Research from the United States has found that consolidation in healthcare services often leads to worse quality of care, while prices for consumers don’t improve—and sometimes even rise. Similar research on the heating and cooling industry shows that, in markets where HVAC competition quietly erodes, prices increase.
The new updated guidelines now explicitly state that a series of acquisitions will be able to be assessed as a whole—often referred to as a “roll-up” of many smaller deals. This is good progress, but this new authority will matter only if it is exercised.
To give the new Merger Enforcement Guidelines teeth, and to stay on top of these quiet consolidations, the Competition Bureau will need to be aggressive with enforcement.
That will mean tracking firms that are actively pursuing acquisition-led growth strategies, using their market-study powers to examine sectors prone to incremental consolidation and improving transparency around merger review results so Canadians can understand how decisions are being made.
The proposed Merger Enforcement Guidelines show clearly that Canada’s competition policymakers understand the problem they are trying to solve.
A fair and competitive economy does not emerge by accident. It requires rules which constrain the consolidation that gives a small number of companies outsized power to set prices, and the tools and resources to monitor behaviour and enforce those rules.
These guidelines can play an important role in keeping prices from quietly creeping up, preventing bigger firms from creating unfair playing fields that hurt small and new businesses and ensuring that Canada’s economy doesn’t concentrate even more wealth and power in the hands of a small number of players. The question now is whether we will be able to follow through.
From Guidelines to Action: Feedback on the proposed Merger Enforcement Guidelines
Background
Social Capital Partners (SCP) is a nonprofit that uses our private-sector experience and public-policy expertise to develop practical policy ideas that help working people build wealth, ownership and economic security.
As we’ve witnessed the increasing consolidation of corporate power in Canada in recent decades, we have concluded that it is impossible to achieve our aims of a fairer, more dynamic, more broadly owned economy without strong competition.
This thinking informed our 2023 submission to the consultation on the review of the Competition Act and our 2025 submission to the consultation on updated Merger Enforcement Guidelines.
Our most recent submission focused on serial acquisitions and the negative impact they can have on our economy. In the time since that submission, serial acquisitions have continued unabated.
For example:
| Pharmacies | In 2025, Neighbourly Pharmacy Inc. announced the acquisition of 33 additional pharmacies across Canada. |
| Primary care clinics | WELL Health acquired 13 primary care clinics in 2024, followed by an additional 9 in 2025, with 34 acquisition opportunities in the pipeline. |
| HVAC | Starting in April 2025, U.S.-based AIR Control Concepts has acquired four HVAC providers, O’Dell HVAC Group, Longhill Energy Products, Airsys Engineering and Rae Mac Agencies. |
We can’t say for sure that any of these particular deals will have negative impacts on their customers or communities, but at a time when Canadians are anxious about making ends meet, the evidence shows they come with real risks to both quality and affordability.
Research from the United States has found that consolidation in healthcare services often leads to worse quality of care, while prices for consumers don’t improve—and sometimes even rise. Similar research on the heating and cooling industry shows that, in markets where HVAC competition quietly erodes, prices increase.
Economic sovereignty is not just about control over essential physical infrastructure, like ports and telecoms. We allow our sovereignty to be chipped away when critical sectors like healthcare, housing repairs and childcare become consolidated in fewer hands – often foreign hands – in ways that make local markets less competitive and create undue obstacles for entrepreneurs to come in and start a business. When private equity (PE) firms systematically consolidate these sectors through serial acquisitions, they gain leverage over critical services, extract wealth and create higher barriers for Canadian entrepreneurs.
In an era in which the U.S. government is using its own companies to advance aggressive foreign policy objectives and openly discussing economic coercion against Canada, allowing further concentration of market power is a strategic vulnerability we cannot afford.
Summary of our feedback on the proposed Merger Enforcement Guidelines
We appreciate the opportunity to provide feedback and believe that the proposed guidelines meaningfully strengthen the clarity and credibility of merger enforcement in ways that are consistent with SCP’s concerns regarding (i) serial acquisitions, (ii) safe harbours and (iii) labour market impacts.
i. Serial acquisitions
SCP recommended that the Bureau more explicitly address serial acquisitions. We are encouraged to see that the Proposed Guidelines clearly articulate the right to examine all or part of a series of acquisitions as a merger, “even if each is not individually notifiable.” We are also pleased to see the proposed guidelines explicitly acknowledge the risks inherent from serial acquisition, by stating “where a firm engages in a series of acquisitions in the same market, each subsequent acquisition may be more likely to result in a substantial lessening or prevention of competition.” This is directionally aligned with SCP’s objective of ensuring that incremental consolidations are
properly assessed in a manner that recognizes their cumulative harm.
ii. Safe harbours
SCP recommended removing or avoiding “safe harbour” framing that could be interpreted as discouraging scrutiny of mergers below certain market share thresholds and are encouraged that the proposed guidelines have moved away from safe-harbour-style signaling.
iii. Labour market impacts
SCP recommended highlighting how labour market impacts should be considered in merger analysis and strongly welcomes the clear inclusion of labour market considerations in the proposed guidelines. This addition appropriately reflects a growing body of policy attention to labour market power as a dimension of competition.
Operationalizing the guidelines
While formalizing the proposed guidelines would be an important step, the real test will be in how the guidelines are operationalized.
We know that the final Merger Enforcement Guidelines will not be a document that is meant to contain details related to operationalization, but we hope that the Bureau will actively and publicly pair their enforcement power with the targeted operational recommendations we outlined in our 2025 submission. Specifically, we recommend that the Bureau:
Identify and more closely track PE firms operating in Canada
Given the outsized role that private equity (PE) firms play in leading anti-competitive efforts to consolidate markets through below threshold acquisitions, the Bureau should allocate dedicated resources to identifying and following the activities of the leading PE firms operating in Canada. This may involve engagement with expert stakeholders, monitoring key data sources, partnering with local governments to monitor mergers regionally, continuing to advocate for the development of a Beneficial Ownership Registry to increase transparency around consolidation patterns and/or introducing legislative tools that compel closed-end funds to report on any acquisitions within Canada.
Issue an open call on the impact of serial acquisitions on consumers and local economic resilience
Seeking feedback from across the country on the impact of roll-ups is an opportunity to access critical information on patterns of transactions that are often opaque and impact a diffuse cross-section of customers. The open call would ideally be done in partnership with local governments and could be specific to sectors like healthcare or be targeted more broadly. Similar efforts are being undertaken in other jurisdictions, with the White House tasking the DOJ, the FTC and the Department of Health and Human Services with issuing a joint Request for Information seeking input on the increasing power and control of the healthcare sector by PE firms. Given the interconnectivity of trade and economic power across the United States and Canada, it would be strategic to follow the United States’ lead and conduct parallel research to inform potential joint action.
Leverage market study powers to obtain information on non-reportable mergers in sectors ripe for serial acquisition
Given the opacity of serial acquisition patterns, the Bureau should take a proactive role in undertaking market studies to understand the state of sectors that are particularly vulnerable to serial acquisition. We suggest a particular emphasis on sectors in the care economy (e.g. long-term care homes, daycares, pharmacies etc.) as these markets are showing clear signs of distress and play a critical role in the health and functioning of our society.
Communicating the guidelines
We also believe that maximizing the effectiveness of the proposed guidelines requires increasing the accessibility of merger information. Canadians are more interested than ever in competition and the impact it has on our economic strength and resiliency. This energy should be leveraged and capitalized on by ensuring that access to pertinent information is available. Specifically, we recommend that the Competition Bureau:
Update the Report of Merger Reviews to be more accessible
SCP welcomes recent changes to the Report of merger reviews, including weekly updates and the inclusion of ongoing reviews. However, examples from jurisdictions like Australia and the European Union, offer valuable models for providing additional information that could improve public transparency regarding merger activity. Specifically, we recommend that the Bureau update the database to include:
- Plain-language summaries of the proposed mergers
- Plain-language summaries of merger decisions
- Relevant decision documentation (not including any sensitive information)
- Links to any additional merger reviews that either party has been involved in
- An option to be notified of new merger reviews as they are announced
Prioritize plain and accessible language in guidance and public information.
Canadians increasingly recognize the importance of competition policy to how people experience the economy. This growing awareness calls for a commitment from the Bureau to ensure that both its guidelines and public information are as accessible as possible. It’s no longer just lawyers and consultants delving into this content, but working Canadians who are concerned with the impact of mergers and acquisitions on their wages, consumer choices and economic well-being. SCP recommends that the Bureau make a concerted effort to prioritize clear, plain-language communication, including providing concrete examples to help Canadians understand the real impacts of economic activities.
Conclusion
The proposed guidelines represent meaningful progress in preserving and protecting competition in Canada. We strongly support their formalization.
However, we believe that the operationalization of these guidelines will be the real test of their impact. Guidance documents shape expectations, but enforcement outcomes shape behaviour. Serial acquirers are sophisticated actors who model regulatory risk into their strategies. If the Bureau does not demonstrate visible capacity to track, analyze and challenge roll-up patterns, market participants will correctly interpret updated guidelines as symbolic rather than substantive.
At a moment when Canada faces unprecedented economic pressure from the United States, allowing continued consolidation of key sectors through unchallenged serial acquisitions weakens our economic resilience and strategic autonomy. The Bureau has the mandate and the opportunity to act.
