Advisors navigate a 90% IPO slump as capital floods into billions in private equity
A shrinking pool of Canadian public companies and a 90 percent-plus collapse in IPO activity are quietly reshaping where your clients can put their money.
According to a new Fraser Institute report, the number of companies listed on the TSX and TSX Venture Exchange has dropped from 3,141 in 2010 to 2,114 in 2024—a 32.7 percent decline.
The same study finds initial public offerings on the two exchanges have fallen from 67 in 2010 to just four in 2024, with only three the year before.
Co-author Ben Cherniavsky wrote in the report Canada’s Shrinking Stock Market: Causes and Implications for Future Economic Growth that, while the value of companies on Canada’s stock exchanges has climbed sharply over time, the number of listed firms has dropped significantly, and fewer businesses are choosing to go public.
For advisors, that means fewer domestic names to build portfolios around, less breadth across sectors and market caps, and a growing mismatch between where capital is flowing and what most clients can realistically access.
The authors frame this as part of a broader economic problem rather than just a market-structure curiosity.
They argue that Canadian equity markets are “flashing red lights” that reflect wider stagnation, lack of productivity growth and lacklustre innovation in the economy.
Previous research cited in the study shows that well-functioning, diverse public stock markets contribute to economic growth, higher productivity and innovation by supplying financing to the business sector to enable growth and ongoing investments.
When public markets thin out, those channels weaken.
At the same time, capital is surging into private markets.
As per the Fraser Institute report, private equity assets under management in Canada have jumped from US$21.7bn in 2010 to more than US$93.1bn 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," Cherniavsky explained.
That shift matters directly for wealth managers.
A growing share of corporate growth and value creation is happening off-exchange, in vehicles that many retail and even mass-affluent clients cannot access—or can only access through higher-fee, less liquid structures.
Meanwhile, the listed universe at home is smaller, older and more mature.
The report notes that public equity markets still play a critical role in connecting households to 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 co-author and Fraser Institute senior fellow Jock Finlayson.
The authors warn that if these trends persist, they risk reinforcing economic underperformance and squeezing ordinary investors out of a larger share of Canada’s growth.
“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,” Finlayson said.
To address the problem, the study recommends a mix of capital-markets and broader economic reforms.
On the market side, the authors call for simplifying Canada’s regulatory regime for listed companies and scaling back corporate disclosure requirements.
They argue that today’s framework has become increasingly complicated and costly, especially for smaller issuers that might otherwise consider going public.
More broadly, the report urges governments to pursue policies aimed at improving Canada’s performance on business investment, productivity growth and new business formation—conditions the authors see as essential to rebuilding a vibrant pipeline of companies that can eventually list on public markets.
