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Celebrating a Victory for Business: Fall Economic Statement Signals Support for Employee-Owned Businesses
Written by Kristen Duever for the London Chamber of Commerce
The Fall Economic Statement delivered a mixed bag of news for businesses in Canada, addressing critical issues such as housing, mental health, and labour mobility, albeit without the desired extension on CEBA loans. However, among these developments, there is a standout win for the business community that the London Chamber of Commerce has been particularly pleased to champion.
A part of the federal government’s Fall Economic Statement that deserves celebration is the government’s commitment to meaningful tax incentives that will support Employee Ownership in business. This is a significant step forward, especially considering the fact that up until now employee-owned businesses have been somewhat rare in Canada due to restrictive tax laws.
Only last week, the London Chamber of Commerce hosted an event that explored this very topic. Our event featured keynote speaker Geoff Smith, former CEO of Ellis Don, who bravely initiated the transfer of ownership of Ellis Don to its employees. Historically, such ventures have been scarce in Canada, in contrast to their prevalence in other jurisdictions such as the UK and the US. The recent tax reforms outlined in the Fall Economic Statement pave the way for a potential surge in employee-owned businesses across our country. You can watch the event video here.
Why does this matter?
The impending Silver Tsunami, with approximately 75% of business owners preparing to retire in the next decade, underscores the urgency of succession planning for Canadian businesses. This planning is crucial not only for the well-being of the business owners but also for preserving jobs and sustaining the economic impact on local communities.
Numerous studies have shown the benefits of employee ownership. Companies where at least 30% of shares are owned by a broad-based group of employees prove to be more productive, experience faster growth, and demonstrate greater resilience against economic downturns. Recent research by the National Center for Employee Ownership further supports this, revealing that employee-owners enjoy higher wages and net worth, better benefits, and increased job security compared to their counterparts in non-employee-owned businesses.
Ultimately, these tax incentives to support employee ownership will give Canadian business owners a greater amount of choice in how they want to go about their success planning. Many of these owners would prefer to pass the torch to their employees rather than foreign investors, thereby safeguarding jobs within the community.
This victory is not just an advocacy win for the London Chamber of Commerce; it's a resounding win for businesses across the country. As we embrace these positive changes, we look forward to witnessing the positive impact on the business landscape both in London and across the country.
