Conservative Party in Canada Endorses Employee Ownership Incentives
In its new election platform, the Conservative Party in Canada joins the ruling Liberal Party in pushing for major changes in Canadian law to create an employee ownership structure similar to ESOPs in the U.S. and employee ownership trusts in the UK. The Liberals had already included proposals to promote employee ownership in their proposed budget. The Conservatives endorsed providing capital gain deferrals for owners selling to employee ownership trusts as well as government support to help finance the sales.
The platform states: “Canadian employees deserve the opportunity to earn more than just a salary for their hard work. They also deserve greater security in retirement. Canada’s Conservatives will increase employee ownership of Canadian companies by establishing Employee Ownership Trusts, which provide a tax advantage for company owners to sell to their employees. This will take the form of a reduction in capital gains tax when the owner sells to a trust owned by the employees, enabling ownership to transfer to the people who have partnered in building the business. We will also ensure that BDC makes financing available to support these trusts.” (BDC is the Business Development Bank of Canada.)
The bipartisan support makes it increasingly likely that Canada will join the UK and the U.S. as a leading promoter of employee ownership. The changes have been spearheaded by NCEO member Social Capital Partners in Toronto, which also helped arrange the financing for the recently implemented ESOP at Taylor Guitars.