The Case for Employee Ownership Trusts
When news breaks that another major Canadian steel producer is being sold to a foreign buyer, it feels like déjà vu for many industrial towns. Another reminder that ownership — not just management — matters. Models like the Employee Ownership Trust now offer a way to keep companies locally owned.
But what if there had been another path?
When Ownership Moves Away, Communities Feel It
The story of Canada’s steel sector is a study in what happens when ownership drifts far from the communities that built it. Over the past two decades, many companies have cycled through creditor protection, private equity control, and offshore ownership. Each phase has moved decision-making farther away, testing confidence and costing local jobs.
For these communities, the consequences are tangible: lost employment, uncertainty around pensions, and a growing sense that large employers can no longer stay both competitive and community-rooted.
Now imagine an alternative version of that story.
Imagining an Alternative: The Employee Ownership Trust Model
In this version, instead of being sold abroad, a Canadian steel company transitions to an Employee Ownership Trust (EOT). The trust purchases a controlling stake, with financing from lenders and government support. Trustees — representing employees, management, and independents — hold the company for the long term, not for a flip.
When global markets weaken, the challenges remain real — falling demand, rising costs — but the response looks different. The EOT’s board makes decisions with employees and the community at the table. Jobs are preserved where possible, retraining is prioritized, and pension funding becomes a shared stewardship goal rather than a liability to shed.
As the economy stabilizes, profits are reinvested locally: in modernization, sustainability, and the next generation of skilled tradespeople. When governments launch green manufacturing programs, a locally anchored, employee-owned company becomes a natural partner.
A Model for the Future of Canadian Industry
This “what if” is not fantasy. It is exactly the kind of ownership model that Employee Ownership Trust legislation (effective 2024) now makes possible for Canadian companies. The EOT structure builds stewardship into ownership — focusing on continuity, shared prosperity, and keeping key employers rooted in their communities.
We cannot rewrite the past, but we can learn from it.
The next time a strong Canadian company faces succession or sale, the question should not be “Who will buy it?” — but “Who will keep it?”
Keeping Canadian Businesses Locally Owned
At Firefly Insights, we help business owners explore options that protect jobs, preserve legacy, and keep companies rooted in their communities.
Ready to keep your business in Canada?
Talk to us about whether employee ownership could be the right path.
