Canada’s lost over 30 per cent of its publicly listed companies since 2010
The number of publicly traded companies in Canada has tanked by nearly a third since 2010, a clear sign of the country’s stagnant economy under liberal policies.
The number of publicly traded companies in Canada has tanked by nearly a third since 2010, a clear sign of the country’s stagnant economy under liberal policies.
Canada’s publicly listed companies have fallen by over 30 per cent since 2010.
According to a new report from the Fraser Institute published on Thursday, the number of initial public offerings (IPOs) are also down 92.5 per cent over the same period.
“Even though the value of the companies trading on Canada’s stock exchanges has risen substantially over time, there has been an alarming decrease in the number of companies listed on the exchanges as well as the number of companies choosing to go public,” said Ben Cherniavsky, co-author of the report.
Over the past 15 years, the number of companies listed on Canada’s two stock markets (the TSX and the TSXV) has fallen from 3,141 in 2010 to 2,114 last year.
Meanwhile, the number of new public stock listings (IPOs) on the two Canadian exchanges plummeted from 67 in 2010 to just four last year, with only three in 2023.
The number of companies and IPOs act as reliable metrics for gauging economic health and offer predictable indicators for assessing future growth.
Cherniavsky attributes Canada’s poor business climate, “including many years of lacklustre business investment and little or no productivity growth,” as a major factor in the downsizing of stock exchange listings.
“Canadian savers are now faced with a shrinking pool of domestic public companies in which to invest for retirement and to build and manage their accumulated wealth,” reads the study.
“Policy makers, regulators, and business leaders should be worried that fewer promising Canadian companies are opting to list on stock exchanges. The evidence suggests that firms that stay private, on average, are less productive and more likely to be acquired by foreign buyers, than similar companies traded on Canadian stock exchanges.”
While public listings are down, the study noted an “explosion of investment” in Canada’s private equity, which is stock in a private company not offered to the general public.
Instead, private equity is only offered to specialized investment funds and limited partnerships, which take an active role in the managing and structuring of the companies.
According to the study, private equity assets under management rose from $21.7 billion (US) in 2010 to over $93.1 billion (US) in 2024.
“The shift to private equity has enormous implications for average investors, since it’s difficult if not impossible for average investors to access private equity funds for their savings and investments,” said Cherniavsky.
The study calls on the government to enact policy changes geared towards reforming Canada’s complicated regulatory regime for listed companies, including scaling back corporate disclosure requirements.
Additionally, the study calls for a reduction in costs to issuers, as well as policies to improve the conditions for private-sector investment and business growth.
“Public equity markets play a vital role in raising capital for the business sector to expand, and they also provide an accessible and low-cost way for Canadians to invest in the commercial success of domestic businesses,” said Jock Finlayson, a senior fellow with the Fraser Institute and study co-author.
“Policymakers and all Canadians should be concerned by the alarming decline in the number of publicly traded companies in Canada, which risks economic stagnation and lower living standards ahead.”