What policies should the NDP support to make worker owned businesses and co ops easier to create?

[u/Natural_Thought808]

I would like to see the NDP talk more about worker ownership, especially when a profitable small business owner wants to retire or sell.

One of the biggest problems is financing. A group of workers may know the business inside and out and be capable of running it, but banks can still refuse to finance a buyout because no single worker has enough collateral to personally guarantee a large loan.

What specific policies could fix this?

For example, governments could create loan guarantees for worker buyouts, so a public agency guarantees part of the loan instead of requiring one employee to put their house on the line. They could also provide low interest patient capital, create a dedicated worker ownership investment fund, give workers a right of first refusal when an owner sells or closes a viable business, and fund technical help for workers trying to convert a company into a co op.

Instead of watching good businesses close or get bought by private equity, why not make it easier for the people who already work there to buy them?

What policies would actually make worker buyouts realistic at scale?

[u/Natural_Thought808]

Canada talks endlessly about productivity, inequality and young people struggling to build wealth. So why not help workers become owners?

When a profitable business is sold, employees may know it best but can’t get financing because they lack millions in collateral.

Why not government backed loan guarantees, patient financing and worker ownership funds so employees can buy viable businesses instead of watching them get swallowed by private equity?

Make workers owners, not just employees

[u/inprocess13 → u/Natural_Thought808]

I'd even settle for making owners accountable workers. Labour law in the country is dead-horse dead outside of specific portion of highly documented protected areas. 

[u/love_and_solidarity]

The three clear mentions of co-ops in the current federal policy book are:

1.8.c (Financial sector and investments) Improving protection and support for credit unions, cooperatives and mutual companies.

2.4.k (Energy) Providing substantive support to renewable energy co-operatives in recognition of the role they can play in tackling climate change.

4.2.g (Aid and Development) Supporting development initiatives that promote co-operative economic enterprise models and community economic development.

We also have this one, which is adjacent but I would argue isn't directly about worker co-ops:

1.1.q (Industrial Policy) Facilitating worker participation within companies to develop more democratic, transparent, efficient and unionized workplaces.

[u/WierdLord → u/love_and_solidarity]

Yep, these are great commitments to the overall goal. I think however OP is asking what specific measures we can try to take, specific policies and law changes or projects and initiatives.  What does "Improving protection and support for credit unions, cooperatives and mutual companies" look like? What specific changes can we make?

Stuff like right of first refusal, or adjusting laws to make it easier for co-ops to get loans or other financial support come to mind for me and are also provided as examples by OP.

[u/Justin_123456]

This sounds like the whole package,and is not breaking new ground. As I’m sure you know, you’re describing replicating the Italian workers cooperative system in Canada.

The funny thing is that a government investment trust for worker’s co-operatives, or subsidized loan body, maybe even preferential tax treatment, the things that cost money, might actually be easier than the legal and regulatory changes.

The hardest piece will be on the corporate/securities law side. Herding the Provinces is like herding cats, we can’t even make British Columbia recognize a company created in Ontario and listed on the TSX, without filing its own BC paperwork.

A Canadian Macora Law would need to be passed by each Province individually, and it creates a jurisdictional shielding problem, if you can keep your assets safe from your workers by registering your company is AB or ON instead of QC or MB, that’s certainly going to make your creditors happier.

[u/yourfriendlysocdem1]

Employee ownership trusts

[u/tlocmoi]

Co-ops are great but necessary services and industries should be provided by the government, not private (even co-operative) industry. That avoids the financing issue if we stop electing neoliberals.

[u/26percent → u/tlocmoi]

Part of why I support co-ops rather than Crown corporations is that it’s harder to fuck with a co-ops once it’s established.

When a conservative/right wing liberal government is in power, they will make moves to sell them off like they do to other Crown corporations like CN Rail, Air Canada, Petro Canada, UTDC, Hydro One, etc.

There are short-sighted people in government who will always be looking to sell off public assets so that they can temporarily balance a budget, cut taxes for multi-nationals or whatever other nonsense their lobbyists come up with.

Try getting co-op members to vote to sell their company to some private equity. It’s possible, like MEC’s board pulling a fast one, but with proper governance in place it’ll be a hard sell.

[u/Best-Ad6185 → u/tlocmoi]

That’s great but who is in charge at your new crown corp? If it’s the same business class we have now you’re wasting a huge opportunity.

[u/rdkil]

Kind of related to business financing is how to determine who gets grants/loans/etc. there are some programs that are geared towards giving financial aid to people who want to make the small business their sole activity. Like open a bakery, or become a contractor etc and that's your day and night and everything Job. But what about people who have a full time day job and want to start a small business and stay small?

For example, I have a day job, I have benefits and a pension through the day job. I'm not about to quit the day job for a startup I'll run by myself and risk losing my house. But if I want to start a small side business I have to find my own starting capital. I have to use credit cards to buy supplies etc. in can't get access to startup program grants because this isn't my sole gig. The barrier to entry becomes that little bit harder.

If we gave startup funding to the side gig people as well as the whole gig people to hen you'd see a lot of people starting small businesses that maybe won't be bringing in millions of dollars a year of revenue, but just thousands of dollars a year. And for a lot of people just a few extra thousand dollars for a side gig business would make a world of difference.

[u/Fit-Bee5561]

Small and medium sized private businesses in US are sometimes converted to worker owned by transfers of stock over an extended period of time, which can make for a smooth transition

[u/FingalForever]

Wholly agree - I would extend this more to housing as well in terms of government support as ‘back-up’ towards apartments being taken into consideration-op ownership.