Article. Conversions to Co-ops and Saving Businesses (in The Conversation)
Vieta, M. (2021). Canada’s small businesses could be saved by converting them to co-operatives. The Conversation Canada (Aug. 3).
Most of Canada’s 1.2 million small- and medium-sized enterprises have been affected by COVID-19. A substantial number of them remain heavily indebted as pandemic restrictions ease, while workforce shortages and supply-chain disruptions are still a problem.
The pandemic has added to the looming succession crisis for these companies due to the growing number of owners nearing retirement who don’t have a formal plan in place for the continuity of their businesses.
One strategy for saving troubled firms and their jobs are business conversions to co-operatives — selling or transferring companies to employees or other community stakeholders who then create co-operatives and continue the business’s activities.
These converted businesses can take on different member ownership forms, such as worker, consumer, multi-stakeholder or producer co-ops. More than 200 of them, of all these different types, already exist in Canada.
As my earlier research on Italy’s worker buyouts and Argentina’s worker-recuperated companies has shown, businesses that convert to co-operatives represent a tried-and-true rescue and succession strategy. However, the Co-opConvert Project's SME succession study shows that in Canada it’s still a largely overlooked option by most owners of small- and medium-sized enterprises and employees, unions and policy-makers.