A recent study by the Fraser Institute says there are concerningly few Canadian-based companies up for public investment on Canada’s two stock markets.

Ben Cherniavsky, co-author of the report, says the number of companies listed on the TSX and TSXV has dropped from 3141 in 2010 to 2114 just 14 years later; a 32.7 per cent decrease. The number of new public stock listings has seen a steep decline as well, plummeting from 67 in 2010 to 4 in 2024.

“So, on one hand, we think this a reflection of poor productivity and meager growth that everyone is increasingly familiar with in Canada, but there is also another element to this. That is, there are still companies that are still growing…Increasingly, those companies are turning to alternative pools of capital to finance their growth.”

In addition to that, there’s also been a shift to private equity investment, with assets increasing from $21.7 billion in 2010 to over $93.1 billion in 2024.

“Our main conclusion there is strictly that the cost to go public these days is so high, so much regulation, so much disclosure requirements, that there are real disincentives to being public in Canada.”

He explains that economic consequences that could prevail from this trifecta of reform could include limiting investors on where they can infuse their money and reducing competition for capital. According to Cherniavsky, the most shocking thing he discovered through the study is that no one seems to be alarmed by it.

“This is something that should concern Canadians, should concern policy makers. It’s a long-term trend. It’s not something you can dismiss by saying it will turn around next year. There’s some clear structural issues here that we have to contend with.”

Cherniavsky underlines the importance of reversing this trend, and he hopes several recommendations included in the report will grab the attention of policy makers. To the country as a whole, he suggests decreasing the burden for going public and generating more economic growth.