Social Consequences of Employee/Management Buyouts: Two Canadian Examples From the Forest Sector*

Abstract

Abstract Local control of natural resource processing facilities in small rural communities is often viewed as beneficial to community development. This paper employs social impact assessment tools to examine the social and economic effects of change in the ownership of forest products mills in two communities. Our analysis documents (1) the degree to which local ownership of the new, locally owned corporations led to local reinvestment of profits, and (2) whether the goals of the architects of these buyouts were realized: the maintenance of jobs, income, population, and a way of life. Overall, both communities were able to maintain jobs, population, and real estate values, and profits were reinvested in mill upgrades. After the buyouts, however, both communities experienced a rise and then a decline in community cohesion, and changes in local social and power relations, in which local ownership was short‐lived; benefits to relationships within the community were mixed.