London Inc. December-January 2024 - 26

The VOICE of
BUSINESS
Connecting, empowering and advocating for the business community in London
Signalling support for
employee-owned businesses
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.
In November, the London Chamber 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 U.S.
The recent tax reforms outlined in the Fall Economic Statement
pave the way for a potential surge in employee-owned businesses
across our country.
WHY DOES THIS MATTER?
The impending Silver Tsunami, with approximately 75 per
cent 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 per cent of shares are
owned by a broad-based group of employees prove to be more
26|londonincmagazine.ca|DECEMBER / JANUARY 2024
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, it's also 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.
written by kristen duever for
the london chamber of commerce
London Inc. December-January 2024

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