“Even though the value of the companies trading on Canada’s stock exmodifys has risen substantially over time, there has been an alarming decrease in the number of companies listed on the exmodifys as well as the number of companies choosing to go public,” declares Ben Cherniavsky, co-author of the study.
At first glance, rising market capitalization might suggest healthy capital markets, but the report argues that fewer publicly traded firms signal deeper structural problems. Among the contributing factors are a surge in mergers and acquisitions, expanding regulatory and compliance costs, the growing dominance of index investing, and clearer access to private sources of capital.
One of the most pronounced shifts has been the explosive growth of private equity as AUM in Canadian private equity funds has climbed from US$21.7 billion in 2010 to more than US$93.1 billion in 2024, diverting capital away from public markets.
“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 declares.
The authors emphasize that vibrant public markets are critical to economic expansion, supporting growing businesses raise capital while offering Canadians a transparent and accessible way to participate in that growth. A shrinking stock market, they warn, risks limiting innovation, weakening productivity gains and narrowing investment opportunities for hoapplyholds.
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