Employee ownership and alternative ownership models

With Canada’s sovereignty at stake, we must invest in every approach to keeping Canadian businesses in Canadian hands. If we match the U.K.'s success in incentivizing employee-ownership conversion, we would see 300 Canadian companies sold to their workers each year. SCP Chair Jon Shell and Employee Ownership Canada CEO Michael Ras explain how very few policies promise as powerful an outcome.

SCP Chair Jon Shell sits down with Andy Farquharson on The Alternative Exit Podcast to explore the transformative potential of employee ownership. Jon recounts how he advocated for Employee Ownership Trusts (EOTs) in Canada to address wealth inequality and business succession. He talks advantages of EOTs, from preserving a company’s legacy to fostering economic resilience in the workforce and reshaping both business culture and wealth distribution.

Crowe Soberman Audit and Advisory Partner Chandor Gauthier sits down with Jon Shell, Chair of Social Capital Partners and Board Member at Employee Ownership Canada. They dive into the benefits of Employee Ownership Trusts and get into the nitty gritty of how EOTs can support smooth business succession, boost equity and retention and safeguard business legacies.

Is alternative ownership the future of business in Canada? Shane Gibson from Future of Good reports on how converting to a non-profit, establishing an Employee Ownership Trust, or becoming a co-operative can help a small business become more sustainable, ensure job security and retain wealth within the community.

SCP Chair Jon Shell in the Toronto Sun on what Employee Ownership Trusts mean for business owners, the community and the broader economy

When outside interests take over a small or medium business, it's often purchased then closed, leaving holes in the community. Future of Good reports on how new laws could encourage more retiring business owners to sell to their employees through Employee Ownership Trusts. EOTs help businesses stay local and contribute to employee retention and financial wealth.

A helpful summary of Employee Ownership Trusts that gives Canadian business owners and their advisors a simple (albeit not short) explanation about what they are, and why they should care.

Bringing EOTs to Canada has been a labour of love for a lot of people over the last few years. We’re deeply grateful to the government for establishing the policies we need for employee ownership to flourish here. Now that it’s real we can’t wait to see the community pick the idea up and run with it.

After four years of research, engagement and advocacy, the federal government has finalized the legislative and tax structure for Employee Ownership Trusts (EOTs). Social Capital Partners and the Canadian Employee Ownership Coalition are grateful for the government's careful work to make EOTs an attractive option for business owners.

In the US and the UK, employee-owned companies grow faster, pay better, are less prone to lay-offs or bankruptcies in economic downturns, and are more likely to keep jobs in local economies. Due to supportive public policy, EOTs are a popular structure for business succession in those countries and have generated significant wealth for front-line employees. Canada does not have a business structure comparable to the employee ownership trust (EOT).

Search funds allow entrepreneurs without capital to buy small businesses. However, only an exclusive club can access the financing to do so and are often forced to re-sell their businesses. We’ve put a twist on the search-fund model to make it more inclusive and long-term.

New research continues to demonstrate that employee ownership fosters economic resilience. As in previous economic crises, employee-owned companies were better at retaining employees and at maintaining hours and salaries throughout the pandemic. In a post-pandemic economic environment, the demonstrated benefits of increased employee retention and alignment by employee-owned companies will be even more important to support economic growth.

In a transaction that would be impossible for a Canadian company, the owners of North America's largest builder of acoustic guitars secure a sustainable future for their company and its employees.