The number of companies listed on the TSX has fallen from 1,486 in 2008 to 747 in 2023 – an astonishing 50% decline in 15 years. Canadian companies are opting to sell to foreign buyers and leave the country than go public. A flight of capital and the concentration of capital allocation decisions outside the country poses danger to the ecosystem, harming the economic position of issuers, employers/employees, investors, intermediaries, and governments.

The goal of this paper is not to be a sensationalist or controversial, but to start an honest conversation to begin to effect policy changes to reverse course.

Put simply, it is in everyone’s economic self-interest to defend, support and build a robust Canadian investment culture.

The paper explores some of the causes of the hollowing out of equity markets such as rising fixed costs for intermediaries and issuers, the shift towards a knowledge economy, the fall of the four pillars in the financial industry, private capital as a substitute for public equity, and a crowding out by governments.

The paper argues that thoughtful deregulation and commercial leadership can arrest the hollowing out of public equity markets so Canada can lead on the international stage.