“We’ve really tried to harness a culture of inclusivity and innovation. We try to differentiate ourselves as a leadership company and move into spaces that other companies haven’t been,” Busch says. “What I want is to encourage employees to look at our business with a more innovative and creative eye.”

In February, Busch began transitioning the company to an employee ownership trust (EOT) model. An EOT is a structure in which a trust holds an ownership stake in a business on behalf of its employees. The employees don’t buy shares from the company; instead, the trust finances the purchase from the owner. Employee-owners receive profit-sharing, allowing them to build wealth and equity in the company they work for, and the trust pays back the owner over time.

Busch retained a 49% ownership stake in the company and plans to stay on as CEO. He sees the transition as the natural next step to fuel the company’s culture of innovation and ensure job security for employees. After months of uncertainty, a recent announcement from the federal government has paved the way for other business owners to follow in these footsteps, and do business differently.

“For me, it’s a way to create longevity in what we’ve created, make it last beyond me so that it has more infrastructure, deep roots in the community, and continuity in what our product, thought, and social leadership is,” says Busch.

In 2023, the federal government amended the Income Tax Act to enable EOT transitions, announcing a time-limited $10-million capital gains tax exemption for qualifying business transfers between January 1, 2024, and December 31, 2026. The incentive addressed a financial barrier faced by business owners by reducing or eliminating the tax on the owner’s gain from the sale, making selling to an EOT more competitive with selling to a third party. Canada’s move followed in the footsteps of the United States and the United Kingdom, which introduced similar incentives in 1974 and 2014, respectively. Since then, data in both countries have shown that the EOT model increases productivity, competitiveness, entrepreneurship and employee wealth.

EOT transitions can take between 12 and 18 months, so the two-year window gave companies a limited time to get going. When an extension to the incentive didn’t materialize in the November 2025 federal budget, EOT advocates expressed concern that it would kill interest and that the government was missing out on an opportunity to strengthen Canadian ownership at a time when it faced the dual challenges of a succession tsunami and U.S. threats to Canada’s economic sovereignty.

“I think this is really important for the future of Canada,” Busch says. He cites a number of local businesses in Barrie that have been bought by foreign firms. “Thankfully, they’re still around, but they’re not in the community the way they were.”

He and other advocates were relieved earlier this year when the government announced in the spring 2026 economic statement that the $10-million incentive would become permanent. The government also introduced a similar incentive for business transitions to cooperatives.

The road to permanence

The evidence of the benefits of EOTs has been growing for decades. In the United Kingdom, employee-owned businesses employ more than 350,000 people. A study by the EO Knowledge Programme found that employee-owned businesses had 8% to 12% higher productivity than comparable businesses, paid employees higher annual salaries on average, and had lower turnover.

In the United States, the National Center for Employee Ownership found that employee share ownership plans (ESOPs) have driven increased competitiveness and employee engagement and have grown to hold more than US$2 trillion in retirement assets for 15 million employee-owners.

According to the Canadian Federation of Independent Business, 76% of Canadian small business owners plan to exit their businesses in the next decade, most of them to retire. Only 10% of these business owners have succession plans. Experts fear that a lack of planning and options may force some owners into closures or sales to foreign owners and that the scale of the potential shift in ownership could significantly affect Canadian workers, communities, and the country’s economic sovereignty and vibrancy.

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Pete Walker advises businesses on succession transitions through his firm, Boughton Riverview Consulting. He is also a director with Employee Ownership Canada. “When you look at this generational transition of ownership that we’re going through right now, there is tremendous macroeconomic and societal risk to the Canadian economy and communities across the country,” he says. “A lot of the conventional wisdom would point people in the direction of selling to a third party, and that that’s the only option. It’s great that business owners now have more options. When an owner can make a confident decision for themselves and the business, they’re more likely to meet the outcomes they’re looking for.”

Moving EOTs up the government’s priority list at a time of political and economic uncertainty was a challenge. When the Carney Liberals gained power in 2025, their focus was on global competitiveness, not small business succession. But Trump’s sovereignty threats opened a new door. Employee Ownership Canada recruited a broad coalition of supporters from across business, finance and government to make the case that enabling employee ownership was an important tool in the government’s sovereignty plan. “Advocates were able to position the benefits of this new model in a way that continues to address some pretty important strategic priorities for the Canadian government and economy,” Walker says. “It feels like an overnight success that was years in the making.”

The road ahead

While there’s no official count of the number of EOT transitions that have occurred since 2023, estimates put the total at close to 10 companies from a range of sectors, including Taproot Community Support Services, Paradigm Transportation Solutions, Grantbook, Brightspot Climate, Terra Remote Sensing, KCI Philanthropy and Busch Systems. While many have been succession transitions, some, like Busch Systems, have been driven by the belief that employee-owned businesses have an advantage over other structures.

Joanna Philips, a director at Rewrite Capital Advisors, a firm that advises clients on all types of employee ownership models, says the company saw an increase in the number of inquiries in April and May, an uptick that was echoed by Wesley Novotny, a corporate tax lawyer with Bennett Jones who has been working on EOT transitions since 2024.

“For us, the transition was an ideal alignment across the philosophical, structural and financial buckets,” says Paul Koreen, co-owner of KCI Philanthropy, a consultancy that has been supporting charitable organizations for more than 40 years. “It’s a perfect fit with our core values as a firm, which are focused on improved communities and lives. This was a way to extend that thinking into how we structure the ownership of KCI.”

The government estimates that the annual cost of the permanent exemption will rise to $80 million over the next five years, a sharp increase from the $25-million projection it released in 2023 – signalling an expectation of substantially higher transaction volumes over time. “The regulatory certainty that we now have gives everybody the time and the runway to plan with confidence and make educated decisions,” Walker says.

Craig Busch has adopted an “evangelistic” approach to sharing what he’s learned about the process with other owners. He says the decision to become an EOT has shifted not only the structure of Busch Systems, but also how he leads the business: “I’m more focused on the bottom line and the business since the transition. I’ve always been on it, but I’m more on it now that I know the employees are going to own most of it. I’m more motivated to get to a payday for them than I was for myself.”

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The party’s momentum has been building since the United Kingdom’s July 2024 general election, when voters elected four Green Party members of Parliament out of a total of 650, quadrupling the party’s number of representatives in the House of Commons while removing a handful of seats from the Labour and Conservative parties. 

Nearly two years later, the Greens are now averaging around 13.5% support nationally, with a notable gain in recent months, according to an aggregated Guardian tracker. In February, Green Party candidate and plumber Hannah Spencer won a by-election in Manchester’s Gorton and Denton constituency, an area that had been previously held by Labour for the past 90 years, bringing the party’s total number of MPs to five. 

What’s powering the surge? Experts say increasing political fragmentation is a key factor, with more voters looking for alternatives to Labour and the Conservatives, which have held the most seats in recent elections. Growing disillusionment with the governing Labour Party is another factor. Britain’s centre-left party is tanking with voters, many of whom feel it has failed to address the cost-of-living crisis or deliver on its promises. According to YouGov’s polling, Prime Minister Keir Starmer’s personal favourability sat at 18% in January 2026. 

There’s a big space to the left of the Labour Party that’s been there for a few years. Polanski is tapping into that opportunity.

— Mitya Pearson, University of Warwick

While Starmer’s support stagnates, the Green Party’s Polanski, who is 43, is on an upward trajectory. He was elected party leader in fall 2025, beating two of the party’s MPs with a left-wing eco-populist platform and a direct communication style. Polanski has said the party needs to “connect with that anger and turn it to hope, turn it to possible solutions.” And his message and style have been resonating with an increasing number of voters who feel abandoned by the Labour Party. Since fall 2025, Green Party membership has almost tripled, from 68,500 to more than 200,000.  

“I finally feel seen by a politician and someone who is willing to not only defend but make my family’s lives better,” says Tinashe Warikandwa, a London resident who describes herself as a member of the queer community and the daughter of an immigrant and a disabled mother. She is one of the thousands of Brits who recently became Green Party members. “My great interest in Zack is his push to tax the rich,” Warikandwa says. “There is such a discomfort in the U.K., with the cost of everything and not much funding going into our communities. I like his angle of saying there’s more of us than the 1%, so he’s trying to bring us all together. He’s young and fresh and unfiltered.” 

Polanski’s message connects the dots between cost-of-living pressures, economic inequality and the climate crisis. He has also taken on issues that Labour and other parties have been reluctant to engage with, including the rights of Palestinian people to self-determination and trans rights.  

“There’s a big space to the left of the Labour Party that’s been there for a few years. Polanski is tapping into that opportunity,” says Mitya Pearson, assistant professor in the Politics of Climate Change MA program at the University of Warwick. “Although [the Greens] have always really emphasized the environment and climate change, they’ve been keen to point out that they’re not a single-issue party. So while climate change is part of [their platform], it’s not absolutely front and centre.”  

The rise of the Green Party and forward push on climate policies in the United Kingdom stands in contrast to what’s happening in Germany, Austria and other European countries, where far-right parties have been trying to dismantle support for climate policies by blaming them for cost-of-living challenges. Environmentalists and think tanks are raising alarm bells about what they’re calling a “greenlash” against the European Green Deal and other climate policies. 

Pearson believes that European voters are still supportive of progressive climate policies but that support for these issues has been superseded by affordability concerns. In both Europe and the United Kingdom, voters are sending the message that affordability and the climate are interconnected and must be addressed as such.   

Will Polanski and the Green Party be able to continue to build support in the United Kingdom by connecting those dots? Calls are growing for Starmer to resign, and Pearson says some expect the Labour Party to begin leaning more to the left to rebuild its base. If that happens, there may be more competition for the space the Greens have been moving into. Which could mean more debate about progressive issues, and more choice for voters. 

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According to the Canadian Federation of Independent Business, 76% of Canadian small-business owners plan to exit their businesses in the next decade, most of them to retire. Roughly 2-trillion dollars in business assets could change hands. But only 10% of these business owners have a succession plan. Some businesses will wind down, others will be sold to management or to a third party or be bought by private equity. The scale of the shift could significantly affect the country’s business landscape and have a lasting impact on Canadian workers and communities.

After spending 25 years building Paradigm, Chartier and his business partners want to ensure that the company continues to thrive after they retire. “We didn’t want to sell to a big company or to private equity. We were concerned about all the horror stories we’ve heard about losing corporate culture,” Chartier says. “We want the company to keep going and leave it in the hands of the people that helped us make it what it is.”

The company launched an employee share ownership program in 2021, but uptake was limited because its 30- and 40-something staff’s household budgets were tied up in mortgage payments and daycare costs. And a management buyout wasn’t in the cards.

So Chartier and his partners began exploring a transition to an employee ownership trust (EOT) model. The federal government had amended the Income Tax Act in 2024 to enable EOTs and announced a temporary $10 million capital gains tax exemption for qualifying business transfers between January 2024 and December 2026 to create an incentive for business owners.

An EOT is a model in which a trust holds a company’s shares for the benefit of its employees. The employees don’t buy shares from the company; instead, in a succession scenario, the trust finances the purchase from the owner and shareholders. The owner is paid back over time instead of all at once. And employee-owners receive profit-sharing, which enables them to build wealth and equity in the company they work for. Evidence from the United States and the United Kingdom, which have both promoted the model for some time, shows that EOTs increase productivity, resilience, entrepreneurship, and employee retention and wealth. Supporters of EOTs in Canada say encouraging the model here could also keep more companies in Canadian hands.

“It really made perfect sense for our company,” Chartier says. “It aligned with our philosophy of employee ownership, our business size and what we anticipated our value to be.” Paradigm fully transitioned into an EOT on January 1, 2026. “The tax exemption was a huge benefit and allowed us to close the gap between what we would’ve gotten on the market and what we were able to sell it to the trust for.”

Employee ownership trusts in Canada

Paradigm is one of a handful of EOTs in Canada. Friesens, a book printer based in Altona, Manitoba, was a pioneer in employee ownership in Canada and has been employee-owned since 2010. Grantbook, a strategic tech consultancy, was the first company to become an EOT under the current model in January 2025. In September 2025, Taproot Community Support Services, a 41-year-old B.C.-based company that employs 750 people, became Canada’s largest EOT.

Momentum has been building since the federal legislation took effect in 2024. Tiara Letourneau of Rewrite Capital, a firm that helps companies make the EOT transition, says that more than 80 businesses have approached her to explore the possibility. Transitions can take anywhere from one to two years, depending on the firm. Justine Janssen, interim executive director at Employee Ownership Canada (EOC), says they expect that the number of EOTs across Canada will rise to between 20 and 30 by the end of 2026. “What’s true now that wasn’t true when we started is that there’s a much bigger understanding in Canada about the importance of owning our assets and what that means for economic sovereignty and the overall wealth and strength of the nation,” Janssen says.

Letourneau believes there is urgency in keeping Canadian companies in Canadian hands and believes EOTS could encourage economic activity to flourish in local areas. “Who owns businesses matters,” she says. “If a huge number of our mid-market companies end up being just about the numbers, not about the people, the community or the services they provide, we’re going to change the landscape of what it feels like to be an employee, a consumer and a community member all across this country.”

Supporters of EOTs say the key to unlocking more transitions is to remove the time limit and cap on the tax exemption and to broaden eligibility and who can access those incentives. In the United Kingdom, which introduced EOTs in 2014 and offered a complete and unlimited capital gains tax exemption to business owners selling to an EOT until 2025, the number of employee-owned businesses grew to 2,470 by mid-2025. In the United States, where employee ownership has been a model since the 1970s and where business owners can access a capital gains tax deferral, there are more than 6,500 employee-owned businesses.

However, the future of EOTs – and of those dozens of interested Canadian companies – became more uncertain in November 2025 when the Liberal government presented a federal budget that did not extend the capital gains tax exemption beyond the end of 2026.

“I’ve been getting messages from owners who have been looking at the EOTs and who have to now put that on pause because they won’t be able to get [the transition] done in time,” says Jon Shell, chair of Social Capital Partners, a non-profit that has led the charge on encouraging EOTs in Canada. “Now we’re all holding our breath [until the April 2026 economic statement] because that will determine the path of employee ownership in Canada.”

Watchers have speculated about the reasons the government didn’t jump on what some consider an easy win that would cost taxpayers little and would have provided a good-news story for Canadian-owned businesses at a time when they’re in short supply. Maybe the issue got lost in the shuffle of the big-ticket items in the Liberals’ long-awaited budget. Maybe the Department of Finance opted to be fiscally prudent about reductions to tax revenue at a time of economic uncertainty. Or maybe the government chose to defer the decision until closer to the December 2026 end date. Whatever the reason, many fear that the lack of clarity will slow momentum at a time of significant transition for Canadian businesses.

“It has probably put sand in the gears of EOT conversions and will delay any early momentum there was towards EOTs, which I think is quite regrettable because it’s a no-brainer,” says former Alberta premier Jason Kenney, a proponent of EOTs. “It has all the parties’ support, and it aligns perfectly with the government’s strategy of strengthening the Canadian economy and retaining capital in Canada.”

How EOTs build wealth and engagement

Andrew Achoba has been working at Taproot Community Support Services for more than seven years, running family support programs in northern Alberta. When Taproot transitioned to an EOT in fall 2025, Achoba became a trustee. He and Taproot’s two other trustees represent the interests of the company’s 750 employee-owners, working with leadership to ensure the sound management of the company.

Achoba says he often gets questions from friends who can’t believe he became an employee-owner without having to make a financial investment. He believes EOTs are an important vehicle for employee wealth-building at a time of increasing economic precarity – especially for those earning hourly wages or in lower salary brackets. “We’re seeing the price of things go up and the affordability rate going down. Any extra money that can go to the individuals doing the hard work, I think, is important.”

A 2025 Harvard Business School report, The Possibilities of Worker Ownership, cited a 2017 finding from the National Center for Employee Ownership (NCEO) that employee-owners in the United States reported 92% more wealth than people working in non-employee-owned businesses. In the United Kingdom, a report found that employee-owned businesses were 8% to 12% more productive than comparable businesses, and regional studies showed that EOTs are more stable in downturns and report fewer layoffs. There is also evidence that EOTs can encourage greater business skills development, deepen employees’ commitment to the business and expand entrepreneurship.

Achoba is seeing some changes firsthand. “We’re seeing a very high level of ownership among staff now. People are more responsible because they have a collective vision for the agency.”

Prior to becoming an EOT, Taproot was owned by a small group of about 30 shareholders, many of them former employees who had retired and wanted to sell their shares. CEO Michael Fotheringham says leadership explored several models, including selling to a third party, a management buyout and expanding its ESOP model beyond the current owners. The EOT model was the simplest option and the one most aligned with the company’s values. The capital gains tax exemption was a key factor in the company’s decision to move forward.

In Taproot’s model, every employee has an equal ownership share in the company. “Now, when I meet with my employees, they’re my owners, so I have this built-in check and balance every day,” Fotheringham says. “That changes some of the traditional dynamics that I think need to change anyway. It‘s a democratization of the workplace, so to speak.”

At a time when all eyes are on how Canada will respond to economic and political headwinds it faces, proponents of EOTs hope that leaders will consider the potential of employee ownership and the importance of small- and medium-sized businesses to building individual, community and national economic strength and vibrancy.

“I don’t want us to wake up in Canada a decade from now and find that we’ve watched a hollowing out of what’s left of our industrial heartland because we were unwilling to be creative and ambitious about solutions like this,” Kenney says.

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