A Revolutionary Employee Ownership Model

In a groundbreaking move, Taproot Community Support Services, based in Maple Ridge, British Columbia, has made history by becoming Canada’s largest employee-owned company! This remarkable transition to employee ownership was finalized recently, making Taproot a pioneer in the new employee ownership trust (EOT) model introduced just last year in Canada.

Empowering Employees and Ensuring Legacy

With 750 employees now holding equal stakes in the company, this shift not only secures their livelihoods but also presents a unique approach for business succession, especially as a significant number of small business owners are gearing up for retirement. CEO Mike Fotheringham touted the trust as the simplest way for business owners to transition their ownership, ensuring that the company remains vibrant and community-focused.

Support Services with a Purpose

Taproot provides crucial support services to adults with disabilities and vulnerable families across British Columbia, Alberta, and Ontario, raking in an impressive $54.3 million in revenue last year. Prior to the transition, the ownership was divided among about 30 long-standing employees, many of whom were retired.

A Bright Future for Employees

Finance Minister François-Philippe Champagne celebrated Taproot’s innovative transition, emphasizing the hope and opportunities this model presents for the younger generation. He remarked that it allows employees to envision themselves as owners, thus paving the way for a vibrant future in Canadian business.

How the Trust Works

Under the EOT structure, Taproot is entirely owned by the trust and managed by trustees who represent the employees’ interests. All workers receive equal ownership stakes without any upfront costs. This model enables the company to purchase its former shares using profits, allowing for a smooth transition and equitable participation.

Tax Benefits and Future Prospects

This innovative model has gained support from the government as well, with Bill C-59 introducing significant tax incentives until 2026. This includes exemptions on the first $10 million of capital gains during qualifying sales, potentially saving owners up to $3.5 million. Experts predict that if this trend continues, Canada could soon see an explosion of employee-owned companies, potentially benefiting over 115,000 workers by sharing nearly $10 billion in wealth!

Real Stories, Real Impact

For many employees, such as Talica Bautarua, who has dedicated ten years to her role at Taproot, the employee ownership model is a dream come true. She expressed how rewarding it feels to be part of the company’s ownership and highlighted how this change positively impacts her family during challenging economic times.

A Promising Path Ahead

While the employee ownership model is not suitable for every company, it presents a much-needed solution for the upcoming wave of business transitions in Canada. With 76% of small business owners planning to exit in the next decade without a clear succession plan, the EOT may just be the future of community-centered businesses.