In his recent address at Davos, Prime Minister Carney spoke boldly about what Canada must do to succeed in a more uncertain global economy: strengthen domestic capacity, keep value creation at home, and ensure growth works for Canadians.
That message lands at exactly the right moment.
Canada is not short on good businesses. We are facing a different challenge altogether: a looming succession crisis that will determine who owns our economy, where wealth flows, and whether communities remain resilient in the years ahead.
There is a practical, proven solution already on the table. It is employee ownership.
A succession crisis hiding in plain sight
Over the next decade, more than $2 trillion in Canadian small and medium-sized business assets are expected to change hands. At the same time, 75–80 percent of small business owners plan to retire or sell, yet only a small fraction have formal succession plans in place.
When succession pathways are limited, outcomes are predictable. Viable businesses are sold because it is easier, not because it is better. Ownership and decision-making move away from communities and often into the hands of third, sometimes foreign, parties. Jobs become more precarious. Long-term investment gives way to short-term extraction.
If Canada is serious about strengthening its domestic economy, succession can no longer be treated as a private issue. It is a national economic one.
Why ownership matters to economic resilience
Ownership is not an abstract concept. It shapes incentives, investment decisions, and resilience over time.
International evidence from the United States and the United Kingdom shows that employee-owned companies are more productive, more stable, and more resilient during downturns. They are less likely to relocate, less likely to fail, and more likely to reinvest locally. Workers in these companies build wealth, earn more over time, and stay engaged in the success of the business.
This is not theoretical. The United States now has over 6,000 employee-owned companies, generating more than $2 trillion USD in worker wealth. The United Kingdom has nearly 3,000 employee-owned firms, built on permanent policy support that made employee ownership a mainstream option.
Canada has begun to follow this path, but only just.
Employee Ownership Trusts: a made-in-Canada solution
Employee Ownership Trusts (EOTs) were introduced into Canadian law in 2024 to provide a clear succession option for privately held businesses. Under an EOT, a business is sold to a trust that holds the company on behalf of its employees. Employees do not buy shares individually or take on personal financial risk. Ownership transfers gradually, using future company profits to repay the former owner.
The early results are promising. Canada’s first EOT transitions have already created over 900 new employee-owners, keeping strong companies locally rooted and financially stable.
Just as importantly, an ecosystem is forming. Financial institutions are developing EOT expertise. Advisors are building practices around employee ownership. Researchers are beginning to track outcomes. This is how durable economic models take hold.
What is holding this progress back is not demand or viability. It is policy certainty.
The simplest economic win Canada can take
Selling to employees is not the easiest option for a business owner. EOT transactions typically involve deferred payments and additional complexity compared to third-party sales. That’s why, and as international experience suggests, employee ownership scales best when supported by clear, stable tax policy and incentives that recognize the added risk owners take on.
Canada’s current $10 million capital gains tax exemption for EOT sales is temporary, set to expire at the end of 2026. Evidence already shows that this short timeline discourages business owner adoption. Succession planning often takes more than a year. Temporary incentives do not align with long-term decisions.
Making the incentive permanent would be a high-impact policy choice. The federal government has projected the fiscal cost at roughly $80 million over five years, a low-cost intervention to economy building. In return, Canada would retain domestic ownership, protect existing jobs, strengthen productivity, and build worker wealth without creating new programs or bureaucracy.
Economists suggest Canada could see roughly 60–95 EOT transitions per year in the early years, with thousands to potentially over 10,000 employees per year becoming employee-owners.
That is not a niche policy outcome. It is a structural economic shift.
A Canada-strong choice
In a world where global capital is more mobile and economic shocks more frequent, resilience matters. Ownership matters. And succession matters.
Employee ownership is not about ideology. It is about aligning incentives so that growth, stability, and prosperity reinforce one another. It keeps businesses Canadian. It empowers workers to share in success. It anchors investment in communities where it belongs.
As Prime Minister Mark Carney argued at Davos, strengthening Canada’s domestic economy requires practical choices that deliver real results. Making employee ownership a permanent, mainstream succession pathway is one of those choices.
Canada has already laid the groundwork. The opportunity now is to finish the job.
Like you, we know the path forward does not have to be complicated.
If a strong, resilient Canadian economy is the future you want to see, we invite you to add your name to our collective letter calling for permanent support for Employee Ownership Trusts.
Sign the letter and help build a Canada-strong economy.