Ottawa pledges to create a dedicated employee ownership trust, like in other countries
The founder and chief executive officer of Toronto’s Juno College of Technology – formerly known as HackerYou, which built its reputation on coding boot camps – can’t help but wonder about the company’s long-term outlook.
Such a plan could become easier to execute in the near future. In its recent budget, the federal government said it would amend the Income Tax Act to create an employee ownership trust , following similar reforms in the United States and Britain. The design of the trust and its launch date are still being worked out.The budget pledge follows a public campaign from Social Capital Partners, a Toronto-based non-profit financing company, to create a dedicated EOT in Canada.
But there are relatively few examples of broad-based employee ownership, its proponents say, citing regulatory issues and few incentives for sellers. Social Capital Partners says there is no trust in Canada with the three key attributes that help facilitate such deals: an ability to invest largely in company shares, take on debt to finance the purchase and hold shares for a lengthy period without employees incurring a tax hit.
Succession is a pressing issue. As Canada ages, so too have its business owners. In 2018, almost seven in 10 private enterprises were owned by someone 45 or older, according to recent Statistics Canada figures.Mr. Masson, 43, is the CEO of Ian Martin Group, an Oakville, Ont.-based employment agency that was co-founded by his grandmother in the late 1950s.
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