Advancing Employee Ownership: A Major Policy Win for Canadian Business

The federal government’s decision in its Spring Economic Update to make the Employee Ownership Trust (EOT) tax exemption permanent is a significant win—not only for Canadian businesses, but for the London Chamber of Commerce and our advocacy efforts on this issue. By removing the 2026 deadline on the $10 million capital gains exemption, Ottawa has acted on a recommendation we have been actively advancing, helping make employee ownership a more accessible and reliable option for business succession planning.

This is more than a tax measure. It is a practical response to a growing economic challenge.

Canada is on the cusp of one of the largest generational business transitions in its history. Over the next decade, more than three-quarters of business owners plan to exit their companies—most due to retirement. Yet only 9% have a formal succession plan in place. When owners can’t find a buyer, too often the result is closure. Jobs are lost, local supply chains are disrupted, and communities lose businesses that have taken decades to build.

At the London Chamber of Commerce, we’ve seen this challenge coming—and have been advocating for solutions.

Our work on employee ownership began in 2023 with Exploring Employee Ownership, an event designed for business owners weighing their succession options. We brought together leaders like Geoffrey Smith of EllisDon alongside expert panelists to explore how employee ownership can offer a viable, values-driven path forward. The interest was clear—but so was the need for stronger policy frameworks to make this option more widely accessible.

In 2024, we reinforced that message by supporting MPP Terence Kernaghan’s motion to establish an Ontario Employee Ownership Strategy. We highlighted the urgency of giving business owners more tools to transition their companies without losing the economic and community value they’ve created.

Then in 2025, at the Ontario Chamber of Commerce AGM, we advanced a policy paper calling for, among other recommendations, the removal of the federal deadline on the $10 million capital gains exemption tied to employee ownership transitions.

Today, that recommendation has been realized.

Employee Ownership Trusts offer a practical and proven model. They allow owners to sell their businesses to employees through a trust structure, preserving continuity while sharing the benefits of ownership more broadly. The impact is tangible: jobs are protected, local wealth stays in the community, and employees gain a meaningful stake in the businesses they help grow.

But this milestone should be seen as a beginning—not an endpoint.

There is more work to do to ensure employee ownership becomes a mainstream option in Canada’s succession landscape. Ontario, in particular, has an opportunity to lead by implementing a comprehensive employee ownership strategy, introducing targeted incentives, and dedicating resources to support awareness and adoption.

Because the stakes are high. Nearly 20% of retiring entrepreneurs already report closing their businesses due to a lack of succession options. At the same time, more than half say their biggest barrier is simply finding a buyer.

Employee ownership directly addresses that gap.

This advocacy win shows what is possible when business organizations and governments work together to solve real-world problems. It demonstrates that thoughtful policy can strengthen our economy while keeping businesses rooted in the communities they serve.

Now, we build on that momentum.

Employee ownership is not just a succession tool—it is a strategy for economic resilience, community stability, and broader participation in prosperity. And thanks to this important federal decision, it is now on firmer footing than ever before.