ESOP Association Canada News/Mail Release

EOT in Canada

In early 2023 the federal government released draft legislation for a new Employee Ownership Trust (EOT).  This week it has released a new commitment in its Fall Economic Statement, exempting taxes on the first $10 million in capital gains realized on the sale of a business to an Employee Ownership Trust.  While we await the final version of the legislation, we are very pleased to celebrate this step towards growing employee ownership in Canada. 

The ESOP Association Canada has long been passionate about creating employee owners.  With over six different types of employee ownership structures already available, there has always been a way to help employees become owners. The addition of this new legislation and structure, coupled with incentives for selling owners, makes a powerful contribution to employee ownership across the country.

This policy initiative comes at a critical time. Over the next decade, 76% of Canadian business owners intend to retire and the government’s creation of an Employee Ownership Trust will provide owners with an alternative to selling their businesses to private equity firms or competitors, at no cost to the workers. The ESOP Association Canada is excited to support new legislation that will benefit Canada’s economy enormously by creating meaningful wealth for workers, protecting local jobs, and creating a more resilient economy.

Employee Ownership Trust legislation is new in Canada, but we are working closely with experts who have helped to design the legislation to grow our knowledge.  We are committed to bringing that knowledge to you and delivering it in a timely way to our current and future members.  If you wish to learn more about it now, you can visit the website for the Canadian Employee Ownership Coalition.  And stay tuned for more information from the ESOP Association as the final legislation is published.