ABOUT EMPLOYEE OWNERSHIP (EO)

WHAT does the acronym "ESOP" mean in canada?

While our neighbours to the south have extensive legislation that lays out what an ESOP is and how it can be created, Canada has not had such legislation in the past. "ESOP" has been used in Canada to stand for "Employee Share Ownership Plan".

We have now transitioned to the use of a more broad term; "Employee Ownership" or "EO", and identified the different models that could fall under this term.

ARE THERE DIFFERENT ways to achieve employee ownership (EO)?

The various ways a company might create an employee ownership plan can be broken down as follows. Ultimately the right plan and specific structure for each company will be different, based on the goals the plan is meant to achieve.

Equity share ownership plans – employees purchase (or acquire) and own shares

Stock option plans – employees have the right to purchase shares in the future

Phantom plans (such as Restricted Stock Units - RSUs, Share Appreciation Rights - SARs, and Deferred Stock Units - DSUs) - many of the benefits of stock ownership without actually giving any company stock 

Employee Ownership Trusts (EOTs) - provide business owners with an additional option to consider when succession planning for their businesses and facilitate employees becoming owners of the business 

ARE THERE ANY GOVERNMENT PROGRAMS SUPPORTING CANADIAN EMPLOYEE SHARE OWNERSHIP? 



Here are the programs we are aware of at the moment. This list may not include all programs out there. 

BRITISH COLUMBIA EMPLOYEE SHARE OWNERSHIP PROGRAM

MANITOBA EMPLOYEE SHARE PURCHASE TAX CREDIT 

YUKON INVESTMENT TAX CREDIT

ESOP QUESTIONS AND ANSWERS FROM THE EXPERTS

EAC Academy Hub to find answers to more detailed Employee Ownership questions regarding Employee Participation, Tax, Legal, and, Valuation. 

WHAT ARE THE BENEFITS?

There are more than 40 years of research to show that Employee ownership plans improve a number of business outcomes. To view the most recent research, visit our Research Page

WHICH CANADIAN COMPANIES HAVE EMPLOYEE OWNERSHIP PLANS?

ESOPs are found across Canada, from small and medium-sized privately owned businesses to large publicly-traded firms. 

Some of Canada's most admired companies have ESOPS, including Friesens, PCL Construction, and Golder Associates. 

We are compiling a list of Canadian companies with some percentage of employee-ownership. Click Here  to see the current list. If you are Canadian employee-owned company and would like to be included in the list please let us know Contact Us

International Association for Financial Participation (IAFP)

IAFP (https://aipf-association.fr/en/) promotes wider employee financial participation and share ownership among national associations, employers and interested academics. The association aims to support national organizations to develop and foster financial participation in their countries. IAFP members are national organizations, entities, and individuals willing to help develop financial participation.

The Employee Ownership Association (EOA) – United Kingdom

The EOA (https://employeeownership.co.uk/) is a not for profit and politically independent organization that works in close partnership with its members to champion, promote and provide insight into the business case for employee ownership. Members benefit from unique learning, networking, and trading opportunities across the network of diverse companies of all sizes and sectors.

National Center for Employee Ownership (NCEO) - USA

The NCEO (https://www.nceo.org/) is a nonprofit organization that has been supporting the employee ownership community since 1981. Their mission is to help employee ownership thrive. The NCEO is an invaluable resource for reliable information about the benefits of employee ownership, including technical matters and developing and maintaining ownership culture.

Employee Ownership Australia (EOA)

EOA (https://employeeownership.com.au/) is an independent not-for-profit organization funded entirely by its members. EOA’s mission is to promote awareness of the transformative power of employee ownership and to advocate for change at a legislative level so it becomes feasible for more businesses to implement employee ownership.