Busch Systems has been producing waste and recycling solutions for more than 40 years. The Barrie, Ontario-based B Corporation prides itself on its commitment to sustainability and innovation. It uses post-consumer recycled materials in production and recently started tracking the cradle-to-grave carbon outputs of its products. CEO and co-founder Craig Busch believes that employee-led innovation is key to the company’s future success.
“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, at least 10 companies from a range of sectors have publicly announced their transitions, 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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