Photo by Charles Deluvio/Unsplash

In his first post-election news conference, Prime Minister Mark Carney made a bold commitment to “take control of our economic destiny to create a new Canadian economy.” If that is to happen, Canadian employees deserve more than inspiration—they deserve a greater ownership stake and voice in the companies where they work.

In Budget 2023, the federal government enabled the creation of employee ownership trusts (EOTs), which can purchase and hold shares of businesses in perpetuity on behalf of employees. Unfortunately, the associated capital gains tax incentive was limited to three years and will expire in 2026. Budget 2025, expected this fall, is an opportune moment to make employee ownership permanent by extending and expanding the capital gains exemption for EOTs.

Employee ownership trusts are one model among several of broad-based employee ownership, and empirical research from around the world shows they have strong benefits for firms, employees, and the broader economy: greater resilience, improved productivity, reduced inequality, and stronger continuity in business succession. For example, a recent UK study found that companies converting to employee ownership via EOTs have, on average, enjoyed a 4.4 percent higher productivity increase over three years compared to similar firms.

Early conversions in Canada—at companies like Taproot Community Support Services, Brightspot Climate, and

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