Canada's Vanishing Public Companies: A National Economic Crisis

VANCOUVER, BC – December 18, 2025 – Canada's public equity markets are sounding a stark alarm about the nation's economic health, with a new report revealing a dramatic hollowing out of the country's stock exchanges over the past 15 years. The number of publicly listed companies has plummeted by nearly a third, while the pipeline of new companies going public has slowed to a trickle, raising urgent questions about Canada's future productivity, innovation, and prosperity.

According to a study published by the Fraser Institute, an independent public policy think-tank, the trend points to deep-seated structural issues within the Canadian economy. The findings paint a picture of a capital market that is shrinking in breadth, limiting investment opportunities for everyday Canadians and potentially starving the next generation of businesses of the capital needed to grow.

A Market in Decline

The statistics are staggering. The report, titled Canada's Shrinking Stock Market: Causes and Implications for Future Economic Growth, found that the number of companies listed on the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV) fell from 3,141 in 2010 to just 2,114 in 2024—a precipitous 32.7% decline.

Even more concerning is the collapse in initial public offerings (IPOs), the process by which private companies raise capital by selling shares to the public for the first time. In 2010, Canada saw 67 IPOs. In 2024, there were only four. This represents a 92.5% drop, indicating that the path to public markets, once a celebrated milestone for successful enterprises, has become a road far less traveled.

"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. This decline is not merely a statistical curiosity; it's a symptom of a broader malaise. Previous research has consistently shown that vibrant, diverse public markets are essential engines of economic growth, funneling capital to businesses for expansion, research, and innovation.

This shrinking of public markets is seen by many analysts as a reflection of Canada's well-documented struggles with weak productivity and chronically low business investment. Without a robust and accessible public market, the capacity for Canadian firms to scale up, compete globally, and become national champions is severely hampered.

The Silent Shift to Private Equity

While public listings have dwindled, a different part of the financial world has been booming. The Fraser Institute's report highlights an explosive growth in private equity, where firms raise capital from institutional and high-net-worth investors to buy companies or invest in private businesses directly. Assets under management in Canadian private equity have surged from US$21.7 billion in 2010 to over US$93.1 billion in 2024.

This massive shift provides a crucial clue as to why companies are shying away from public markets. For many businesses, raising capital privately has become a more attractive alternative. It allows them to avoid the significant costs, stringent regulatory and disclosure requirements, and intense public scrutiny that come with being a listed company. Businesses can pursue long-term growth strategies without the pressure of quarterly earnings reports.

However, this migration from public to private has profound consequences for the average Canadian investor. Public stock markets are democratizing forces in finance, providing an accessible and low-cost way for anyone with a savings or retirement account to invest in the success of domestic businesses. Private equity, in stark contrast, is an exclusive club.

"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," Cherniavsky explained. As more of the country's most dynamic and high-growth companies remain private for longer, the returns they generate are captured by a small pool of sophisticated investors, potentially exacerbating wealth inequality.

A Global Trend with Unique Canadian Risks

The phenomenon of shrinking public markets is not unique to Canada. Other developed nations, including the United States and the United Kingdom, have witnessed similar trends. In the U.S., the number of listed companies has roughly halved from its peak in 1996. The drivers are often the same: the rising burden of regulation and the ample availability of private capital.

However, the implications for Canada may be more severe. While the U.S. market remains deep and is home to many of the world's largest technology giants, Canada's economy is more concentrated in mature sectors like finance and natural resources. The decline in public listings, particularly among smaller, high-growth firms, poses a direct threat to economic diversification and innovation.

Experts suggest that an increasingly "hostile" regulatory and governance environment in Canada has made going public—or even remaining public—an unappealing proposition for many corporate leaders. This creates a risk that promising Canadian companies will either stay private indefinitely or sell to foreign buyers rather than grow into major domestic employers and global competitors.

A Call for Revitalization

To reverse the decline, the Fraser Institute's report makes several key recommendations aimed at making public markets more attractive. These include a comprehensive reform of the complex regulatory regime for listed companies, a scaling back of corporate disclosure requirements to reduce compliance costs, and a broader push for policies that improve Canada's lagging performance on business investment and new business formation.

The goal is to create an ecosystem where going public is once again seen as a viable and attractive path for growth. Without such reforms, the report warns, the continued erosion of public markets could lock in a future of slower growth and diminished opportunities for both businesses and individual investors.

Jock Finlayson, a senior fellow with the institute and co-author of the study, stressed the urgency of the situation. "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," he stated.

"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."