PROMOTING BUSINESS CONVERSIONS TO CO-OPERATIVES

CMC is asking that the Government of Canada encourage and enable Business Conversions to Co-operatives (BCCs), through awareness and financing, to help maintain local businesses and offer retirement-aged owners another option for their succession plans.   

BCCs are a tried-and-true solution for business succession around the world and in Canada, hundreds of conversions have successfully taken, like grocery stores, coffee shops, a shortline railway, funeral homes and much more. Despite this, the scenario is still not broadly known among small- and medium-sized enterprises (SMEs) owners, employees, unions, and policymakers in Canada. This is a lost opportunity for keeping potentially thousands of businesses alive considering the SME succession crisis, all while meeting local needs.  

BCCs take place when private, public, or non-profit companies transition into co-operatives. In Canada, many conversions occur as part of a succession plan whereby a retiring owner or owners sell their business to employees and they, in turn, continue to operate the enterprise as a co-operative. The recent commitment to have Employee-Ownership Trusts-related incentives harmonized to make them available for sellers who are part of a worker-co-op buyout were welcome.  However, other types (consumer, producer and multi-stakeholder) represent most co-operatives in Canada and 70% of documented conversions.  

The need to raise awareness for business conversion to co-operative scenarios and support the transitions through financing programs and tailored business advisory services, remains high. 

CMC, along with various stakeholders such as the Canadian Worker Co-op Federation and the Canadian CED Network, would be delighted to provide more information, including case studies.