Fast & Curious: Short Takes on Random Things

Worker Ownership

I’ve recently discovered  that “Lefty feminist economist” Angella MacEwen, a Broadbent Institute Fellow and senior economist with CUPE National, has a substack (Social Economics) on which she promises to do her best to:

… put economic analysis into plain language, and and add feminist working class context to issues that are so often covered as if they are technical and neutral. The whole point of an economy is to serve society, so let’s think about it that way.

To which I can only say, “Amen.”

Angella MacEwen

Angella MacEwen (Source: Social Economics)

Her latest post caught my eye first, because it’s about worker ownership, an issue that always interests me (I’ve often wondered why it never seems to be an option, here in the cradle of the Antigonish Movement, when we discuss economic development) and second, because what she’s doing in this post is what I try to do—taking a bland, mainstream media story based on a press release and digging deeper.

The triggering piece for MacEwen’s post is a TVO article by the Ontario public broadcaster’s “affordability” reporter headlined:

What is employee ownership, and could it be coming to Canada?

Sub head: As small-business owners retire, this coalition is advocating to replace them with an employee-focused model.

The coalition in question is the “newly launched” (as in, established on 10 January 2023) Canadian Employee Ownership Coalition (CEOC) which advocates (as in, already has engaged lobbyists to push the federal government to enact legislation enabling) something called an Employee Ownership Trust (EOT) based on a UK model. (And if you have been following anything that’s been happening with workers in the UK these days, you are probably already hearing alarm bells.)

MacEwen says she was unfamiliar with this model of worker ownership, so googled it and the first result she was presented with was “an ad telling business owners that they can avoid taxes by selling through an ownership trust.”

Disappointed but not discouraged, she continued her research and it all got…so much worse:

It turns out that employee ownership trusts involve no actual employee ownership at all. They don’t even provide improved employee involvement in decision making.

How does it work? The owner sells some or all of the business to a general trust, which is then directed to make decisions in the best interests of all of the enterprise’s employees. There is no requirement that employees have a voice in the decisions of the trust. Trustees (established by the former owner) get to decide what it means for a decision to be in the best interests of employees. Theoretically, an employee could be a trustee, but there’s nothing that even promotes that as an option.

Current employees do share in the profits of the trust, and sharing has to be made in a consistent fashion (based on the number of hours an employee worked that year, for example). Often though, the trust has borrowed money to pay out the selling owner, and so that can affect the amount of profit available to be shared.

Also, in the UK model, the sale of the company to the trust is not subject to capital gains tax—another win for the business owner.

Excerpt from Canada's Federal Corporations Registry re: establishment date of CEOC.

Source: Canada’s Federal Corporations Registry.

Having debunked the notion that EOTs are actually a form of employee ownership, MacEwen turned her attention to the “Delivering Benefits to the Canadian Economy” section of the CEOC’s website and things got even more interesting.

She discovered that none of the supporting evidence presented by the coalition is about ESOTs and almost all of it is about American Employee Stock Ownership Plans (ESOPs) under which:

…employees not only share in profits, they also accumulate stock while they are working at the company (often without having to purchase it). When an employee leaves the business, they sell their stock back to the ESOP.

Some of the papers and articles cited reference other types of worker ownership, like worker co-ops and “equity grants” where “employees receive stock ownership as part of their compensation.” But none—as in, not one—of the references is to EOTs and yet, the EOT model is the only one recommended by this freshly hatched “coalition” with its steering committee of business, bank, private equity and accounting executives. (Those venerable guardians of the workers’ interests.)

List of lobbyists for the Canadian Employee Ownership Coalition

Source: Canadian Registry of Lobbyists

I really recommend the whole post, MacEwen’s link-by-link analysis is deadly and her conclusion seems reasonable to me:

There are some heavy-hitters on the “supporters” page of CEOC site. The existence of the webpage and the TVO story, though, tell me that it’s not a done deal – they’re still trying to sell it to us normies.

Finding a way to help small business owners transition their businesses as they retire is a very good idea. Enabling employee ownership as part of that transition would be even better.

Subsidizing a scheme that doesn’t provide ownership or voice to workers? Not great, not progressive, probably not even good for Canada’s economy or inequality once you factor in the effects of the capital gains tax break. I really hope our Finance Minister agrees.

I share that hope and I’d add one of my own: that reporters covering stories like this would take the time to do the work MacEwen did instead of the taking a group like the CEOC at its word.


Berlin Boondoggle

One of the podcasts I listen to regularly is called “Well, There’s Your Problem (WTYP)” a podcast about engineering disasters—with slides. I usually listen instead of watching the YouTube version (with the slides) but last night I started listening to an episode about Berlin’s Brandenburg Airport and ended up switching to the video because I needed to see the pictures. (It was a good decision.)

The hosts are very funny and extremely rude (they bleep the worst bits but it’s still pretty blue, so if you are more refined than I am, you might want to stick to one of the mainstream accounts of this incredible story).

Berlin Brandenburg Airport, Flying Carpet: The Magic Carpet by Pae White

“The Magic Carpet” by Pae White, Berlin Brandenburg Airport (Photo by Hervé Joseph Lebrun, CC BY-SA 4.0, via Wikimedia Commons)

I think the Berlin Brandenburg Airport piqued my interest as a topic because I lived in Europe for a long time and I had no idea such an airport existed. That, it turned out, is because, although plans to build it stretched back to the time of Berlin reunification and ground was broken on the project in 2006, the airport didn’t actually open until 2020—just in time for a global pandemic and long after I’d returned home (through Frankfurt airport, about which, more later).

The 14-year delay—and ballooning budget, which more than tripled in size from roughly €2 billion to roughly €7 billion (CAD$3.6 billion to CAD$10 billion)—are explored in depth on the podcast and there are too many jaw-dropping details to recount them all here even if I wanted to, so I’ll just mention a few of my favorites:

  • Construction began in 2007, despite serious flaws in the design plans, and a grand opening was planned for 2012. Weeks before this event, it was discovered that the fire protection system didn’t work. Airport officials proposed to the local Fire Marshall that they would get around this by deploying 800 interns with walkie-talkies and instructions to watch for signs of fire and if they smelled smoke, to call it in while simultaneously raising a red flag and pointing passengers toward the exits. The Fire Marshall didn’t go for this and the grand opening was postponed.
  • Screens were installed early on in the construction process but nobody could figure out how to turn them off, so they were on continuously for years and had reached the end of their seven-year service life and had to be replaced by the time the airport actually opened in 2020.
  • The smoke evacuation system (which neither sucked out smoke nor replaced it with fresh air) was designed by an “Italian guy pretending to be an engineer.”
  • Under the terms of a settlement of a lawsuit over noise pollution, flight paths were drawn to limit the number of villages passed over. As a result, on days when the winds are such that pilots flying west must take off towards the east, they are required to come off the end of the runway then go immediately into a 135-degree turn called the “Hoffmann Curve” or the “Vomit Curve.”

Of course, the troubled history of the Berlin Bradenburg Airport has been well documented elsewhere. I missed it because I stopped paying attention to a lot of European news after I left Europe.

Also, I just generally don’t like airports, although this photo of the Tegel airport (one of three in Berlin that were replaced by the Berlin-Brandenburg Airport) appeals to me. The airport itself was hexagonal as was some of its original 1970s seating:

Interior: Tegel Airport Berlin

“The original early 1970s interior reflects a time when air travel still held a certain novelty and glamour.” (Photo: GMP Architekten via uncube)

I always flew through Frankfurt airport, which I really hated—it seemed to be eternally under construction and there was never anywhere to sit. Which reminds me of one of the funniest lines from the podcast. Ben Miller, the guest host, says he was in the new Berlin airport, standing next to an elderly German man who turned and said, “At least under communism, there was somewhere to sit.”



I was messing around with the home page layout, as you may have noticed, trying out a “Most Popular Posts” feature in favor of the old “Recent Posts” but as the “most popular” list never changed (no idea what’s up with that) and a reader told me they preferred the list of recent posts, I’ve reinstated it.

I am still working on the Joint Subscription situation and hope to get it sorted out this weekend so Iris at the Examiner won’t kill me. (JK, Iris is too nice for that, but I do need to get this done.)