From the Fraser Institute

By Ben Cherniavsky and Jock Finlayson

Initial public offerings down 94% since 2010, reflecting country’s economic stagnation

Canadian equity markets are flashing red lights reflective of the larger stagnation, lack of productivity growth and lacklustre innovation of the
country’s economy, with the number of publicly listed companies down 32.7 per cent and initial public offerings down 92.5 per cent since 2010, finds a new report published Friday by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“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 Canada’s Shrinking Stock Market: Causes and Implications for Future Economic Growth.

The study finds that 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 in 2024—a 32.7 per cent decline.

Similarly, the number of new public stock listings (IPOs) on the two Canadian exchanges has also plummeted from 67 in 2010 to just four in 2024, and only three the year before.

Previous research has shown that well-functioning, diverse public stock markets are significant contributors to economic growth, higher productivity and innovation by supplying financing (i.e. money) to the business sector to enable growth and ongoing investments.

At the same time, the study also finds an explosion of investment in what’s known as private equity in Canada, increasing assets under management 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,” explained Cherniavsky.

Crucially, the study makes several recommendations to revitalize Canada’s stagnant capital markets, including reforming Canada’s complicated regulatory regime for listed companies, scaling back corporate disclosure requirements, and pursuing policy changes geared to improving Canada’s lacklustre performance on business investment, productivity growth, and new business formation.

“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.”

Canada’s Shrinking Stock Market: Causes and Implications for Future Economic Growth

• Public equity markets are an important part of the wider financial system.
• Since the early 2000s, the number of public companies has fallen in many countries, including Canada. In 2008, for instance, Canada had 3,520 publicly traded companies on its two exchanges, compared to 2,114 in 2024.
• This trend reflects [1] the impact of mergers and acquisitions, [2] greater access to private capital, [3] increasing regulatory and governance costs facing publicly traded businesses, and [4] the growth of index investing.
• Canada’s poor business climate, including many years of lacklustre business investment and little or no productivity growth, has also contributed to the decline in stock exchange listings.
• The number of new public stock listings (IPOs) on Canadian exchanges has plummeted: between 2008 and 2013, the average was 47 per year, but this dropped to 16 between 2014 and 2024, with only 5 new listings recorded in 2024.
• At the same time, the value of private equity in Canada has skyrocketed from $12.8 billion in 2008 to $93.2 billion in 2024. These trends are concerning, as most Canadians cannot easily access private equity investment vehicles, so their domestic investment options are shrinking.
• The growth of index investing is contributing to the decline in public listings, particularly among smaller companies. In 2008, there were 1,232 listed companies on the TSX Composite and 84 exchange-traded funds; in 2024, there were only 709 listed companies on the TSX and 1,052 exchange-traded funds.
• The trends discussed in this study are also important because Canada has relied more heavily than other jurisdictions on public equity markets to finance domestic businesses.
• Revitalizing Canada’s stagnant stock markets requires policy reforms, particularly regulatory changes to reduce costs to issuers and policies to improve the conditions for private-sector investment and business growth.

Ben Cherniavsky

Jock Finlayson

Senior Fellow, Fraser Institute

From The Center Square

By Thérèse Boudreaux 

President Donald Trump signed an executive order moving marijuana from a Schedule I to a Schedule III controlled substance, despite many Republican lawmakers urging him not to.

“I want to emphasize that the order I am about to sign is not the legalization [of] marijuana in any way, shape, or form – and in no way sanctions its use as a recreational drug,” Trump said. “It’s never safe to use powerful controlled substances in recreational manners, especially in this case.”

“Young Americans are especially at risk, so unless a drug is recommended by a doctor for medical reasons, just don’t do it,” he added. “At the same time, the facts compel the federal government to recognize that marijuana can be legitimate in terms of medical applications when carefully administered.”

Under the Controlled Substances Act, Schedule I drugs are defined as having a high potential for abuse and no accepted medical use. Schedule III drugs – such as anabolic steroids, ketamine, and testosterone – are defined as having a moderate potential for abuse and accepted medical uses.

Although marijuana is still illegal at the federal level, 24 states and the District of Columbia have fully legalized marijuana within their borders, while 13 other states allow for medical marijuana.

Advocates for easing marijuana restrictions argue it will accelerate scientific research on the drug and allow the commercial marijuana industry to boom. Now that marijuana is no longer a Schedule I drug, businesses will claim an estimated $2.3 billion in tax breaks.

Chair of The Marijuana Policy Project Betty Aldworth said the reclassification “marks a symbolic victory and a recalibration of decades of federal misclassification.”

“Cannabis regulation is not a fringe experiment – it is a $38 billion economic engine operating under state-legal frameworks in nearly half of the country that has delivered overall positive social, educational, medical, and economic benefits, including correlation with reductions in youth use in states where it’s legal,” Aldworth said.

Opponents of the reclassification, including 22 Republican senators who sent Trump a warning letter Wednesday, point out the negative health impact of marijuana use and its effects on occupational and road safety.

“The only winners from rescheduling will be bad actors such as Communist China, while Americans will be left paying the bill. Marijuana continues to fit the definition of a Schedule I drug due to its high potential for abuse and its lack of an FDA-approved use,” the lawmakers wrote. “We cannot reindustrialize America if we encourage marijuana use.”

Marijuana usage is linked to mental disorders like depression, suicidal ideation, and psychotic episodes; impairs driving and athletic performance; and can cause permanent IQ loss when used at a young age, according to the Substance Abuse and Mental Health Administration.

Additionally, research shows that “people who use marijuana are more likely to have relationship problems, worse educational outcomes, lower career achievement, and reduced life satisfaction,” SAMHA says.

Thérèse Boudreaux