Canada’s first ever EOT (Employee Ownership Trust)
From share purchase plan to EOT
Here at ESOP Builders, we are ecstatic that one of our share purchase plan clients, Grantbook, has become the first ever EOT in Canada under the new legislation. This means that the company is owned by an Employee Ownership Trust, therefore ALL employees are the owners! Each employee participates in ownership as a beneficiary of the trust without having to purchase shares themselves. See below for general EOT structure information.
Founded in 2012, Grantbook specializes in helping grantmaking organizations operationalize their mission and vision by leveraging their people, processes, and tech. As a social purpose organization, B Corp and now 100% employee-owned, the team really walks their talk.
In an article from around 2021 on Grantbook’s website, Co-Founder Peter Deitz was asked what advice he would give to others considering employee ownership. ” ‘It’s never too early to create and implement an [employee ownership] plan. The earlier your company is able to put in place the [employee ownership] structures, the sooner your company will accrue the benefits that come from having [employee ownership]. It’s one of those things, like B Corp certification, that feels like a secondary priority, but actually produces an outsized impact over the long term of your business.
Another piece of advice is to not underestimate the complexity involved. Extending ownership to any groups—whether investors, employees, or business partners—is inherently complex and takes time to do well. Grantbook benefited enormously from engaging ESOP Builders, a Canadian firm that specializes in helping Canadian companies design and implement employee ownership plans.
The most important piece of advice is to spend the time and money understanding the tax implications for employees. As with any investment, there is always risk for the investor. So it’s incredibly important to be able to discuss that risk with employees and outline both the upside and downside implications of their investment.’
An Employee Share Ownership Plan (share purchase plan) was formally launched in February 2020 with help from ESOP Builders. In 2024, officially announced in 2025, Grantbook then transformed their employee ownership plan into the Employee Ownership Trust with help from the company’s other professionals. Grantbook’s employee ownership plan represents the concretization of their core values and mission as a social enterprise and B Corp. It further formalizes the culture of ownership that many employees feel and enact in their work everyday.”
What employee owners had to say (2021):
“Between our transparency around Grantbook’s financial data, my plan to stay here long term (both for my career, and for the [employee ownership plan] specifically to take advantage of tax upsides), and my gut feeling that investing would be a sound investment, it felt like a no-brainer to buy shares in Grantbook.”
“It was primarily a financial decision. In the best case scenario, the shares could do quite well. In a worst case scenario, the shares lose all of their value—but as an employee, at least I would likely be able to see this coming and take action to avoid it. It seemed like a reasonable risk on the whole. While most of my analysis had focused on the ultimate return when selling shares, I hadn’t considered the return through dividends as I assumed my percentage ownership was too small to be significant. I was pleasantly surprised when it was a decent amount!”
“The [program] is still an infant, so it will be interesting to see how it impacts our culture over time, and to see how many team members invest as we grow. For me the biggest difference is that, as a part owner, I think more about the bigger picture health and wellness of Grantbook—and about how my role contributes to that big picture.”
“Before the [plan], we already had a very strong culture of ownership—we’re really transparent about financials, and the team has plenty of opportunities to weigh in on decision making and strategy, so not much has changed in our culture. Perhaps the biggest difference for me is at a values level: employee ownership distributes ownership of Grantbook in a way that feels more in line with our values.”
An EOT is a specific structure the Canadian government has created after advocacy efforts by the Canadian Employee Ownership Coalition and now Employee Ownership Canada.
This specific trust allows qualifying organizations to sell majority ownership, at Fair Market Value, to the trust for the benefit of all employees. The deal is financed by a financier and/ or the seller, which is paid back through company profits over time (such as 10 years).
Employees automatically become beneficiaries of the trust, subject to an eligibility period (such as 1 year), and can receive profit distributions and/or proportional equity value payouts upon certain events (such as retirement).
The governance of the company is quite typical with an EOT. The organization would be owned by the EOT but still maintain a Board of Directors, of which the seller(s) can still be part of with certain limitations. The EOT would also have a kind of board, the “Board of Trustees”, of which the seller(s) can still be part of with certain limitations. Employee-owners can be represented on the Board of Directors, but don’t have to be, however there must be at least 33% employee-owner representation on the “Board of Trustees”.
If you are interested in transitioning your current share program to an EOT, schedule a time to talk to us.
To explore which employee ownership model is for you, complete the feasibility survey on our website for a complimentary report and discussion with an employee ownership expert.
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