The Canadian tax deadline is May 1st and as we all know only two things in life are certain – death and taxes. And for a lot of people doing taxes is a death defying experience.
ESOPs or Employee Share Ownership Plans have special tax related issues. There are three types of ESOPs in Canada.
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It is estimated that less than 10% of the workforce actually own their own business. That means over 90% are employees. This statistic is important because owners and employees differ in how they think about business issues.
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Most owners of privately-held companies are also the founders. Why? At some point in the past, they had a dream and a desire to own their own business. For many, this required giving up a secure job working for someone else and entering the uncertain and ambiguous realm of an entrepreneur. Although there was a huge risk, they believed in themselves and their dream, and they took the leap. For many, this required using their own savings, as well as putting their house and everything they owned on the line as collateral. This was not an easy decision on their part.
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What is the foundation for effective employee engagement within your ESOP?
Trust.
Actually, trust is the foundation for every relationship, in any area of your life. And the only way to create a workplace environment for greater connection, collaboration, innovation, creativity, and success, is by building incrementally higher levels of trust every day.
A basic understanding of neuroscience can allow us to have a simple, understandable dialogue about some of the elements that instill trust, employee engagement, and can lead to an even more successful Employee Share Ownership Plan (ESOP).
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Canadians born between 1979 and 2000 now outnumber baby boomers for the first time in history. The Millennials (or Generation Y) form a distinctive segment of the work force, aged 16 to 37 years old. There are two types of Millennials: those aged 16 to 27 have been called the iGeneration Millennials since they were raised with iPads; while those aged 28 to 37 are called the Net Generation Millennials as they were brought up on the internet.
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When business owners think of offering their employees equity in the company, a stock option plan often comes to mind.
Stock options can be a great tool for owners to engage their employees and attract and keep talented staff. So let’s discuss what stock options are, and in what scenarios they perform best.
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A “management buyout” is a buzz phrase currently used in many business discussions, and for good reason.
The greatest generation of entrepreneurs in Canadian history will retire within the next 10 to 15 years, and these men and women are looking for a way to exit their companies in a way that meets their needs. Not only do they want to leave with an abundance of retirement funds, they also want to leave a legacy. They want to ensure the business they built and nurtured will thrive and continue to support the employees and enhance the community.
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Admittedly, the business of Canada Post has changed dramatically in recent years, which is contributing to the looming postal strike.
Moving away from paper-based communication and transactions has slowed the flow of business to Canada’s Postal Service. As consumers we have seen increased rates and cancelled home delivery as two public facing ways the public corporation has tried to make its business model make sense.
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If Canada is facing a retirement savings crisis, then expansion of Canada Pension Plan (CPP) is only a small part of the solution. How else can we encourage Canadians to save for retirement?
A model that’s proven to be extremely effective in helping more people build wealth while keeping businesses competitive is employee share ownership plans (ESOPs).
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Updated Dec 2022
On its 10th anniversary, the owners of Canada’s largest organic brewery, Beau’s All Natural Brewing Company, announced it will be selling the company to employees through an Employee Share Ownership Plan (ESOP).
The owners, a father-and-son team, said selling to employees ensures the Vankleek Hill, Ont., brewery that has approximately 150 employees stays independent, an important factor for the founders.
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There are several common questions business owners ask us when first exploring an employee share ownership plan (ESOP). Learn the answers to these questions in this video we produced in partnership with SuccessionMatching.com:
Our experience shows there are key attributes that suggest a company is a good candidate for an employee share ownership plan (ESOP). Read through these questions to learn if an ESOP is a good fit for your company:
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Our experience shows there are key attributes that suggest a company is a good candidate for an employee share ownership plan (ESOP). Read through these questions to learn if an ESOP is a good fit for your company:
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A majority of the companies we work with share that one of the major goals for implementing an employee share ownership plan (ESOP) is to attract and retain key people. While many owners know intrinsically that ownership will help with this important issue, their assumptions are backed by research.
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Updated December 2022
A new business certification called B Corp is becoming a leading business innovation, and the model works extremely well with an ESOP. 
B Corp companies have a mission to maximize “stakeholder value.” Stakeholders include employees, community and the environment, in addition to shareholders. Consider it like certification of a LEED building or Fair trade coffee, but for companies.
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In a meta analysis of 225 academic studies by Sonja Lyubomirsky, Laura King and Ed Diener (as reported in the 2012 Harvard Business Review) it was shown that happy employees have a higher productivity rate by 31%, increased sales by 37% and are 3 times more innovative and creative.
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Should you make the scary switch to an ESOP? Or is it a scary switch?
There is often a perception that inviting employees into the ownership circle can take away value, rather than adding value to a company. When designed well, this is not true at all. In fact, there are many huge advantages for the owner, the company and the employee team.
Tema Frank of Frank Reactions interviewed Employee Ownership Specialist, Dan Ohler, from Edmonton, AB to explore these questions.
We invite you to grab a cup of coffee, put on your headset, and enjoy the interview.
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In our daily conversations with business owners and senior management, we receive lots of questions about employee ownership of business through an ESOP. Most fit into two categories characterized as:
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It is no secret that our Canadian economy is changing. How does this relate to Canadian employee ownership? A great question.
In Alberta, as in many other places across Canada, thousands of oil-related jobs have been lost. Downtown Calgary was almost impossible to drive through a year ago, yet now, rush hour is quite manageable – and it’s not because people are riding bikes.
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Employee Share Ownership Plans in Canada are often thought to work best in industries such as engineering, construction, high-tech, and famous little airline companies like the one based out of Calgary, AB. Any guesses?
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