The head of the Toronto Stock Exchange is counting on recent market volatility to sway some companies towards listing in Canada this year, even as tariff-fueled uncertainty dries up risk appetite across the globe.
U.S. listings have dwarfed Canadian ones for years, with companies drawn to larger capital pools, lower regulatory burdens and a better-performing market in New York. But recent market turbulence — which has hit U.S. stocks harder than Canadian ones — could bolster Canada’s appeal for some companies, said John McKenzie, CEO of the TMX Group.
“Let’s be candid, it’s chaos,” said McKenzie, in an interview with Bloomberg. “There are companies that don’t want to look in that sphere because of that noise.”
Canada’s S&P/TSX Composite Index was down nearly 3 per cent on Thursday in a global rout sparked by fears that harsher-than-expected U.S. tariffs announced the day before by President Donald Trump will hurt economic growth. Still, the index has fallen just 0.6 per cent this year, compared to a 7.1 per cent decline for the S&P 500.
McKenzie hopes 2025 will mark a rebound after a dry spell of IPOs and corporate listings that has hit Canadian exchanges in recent years, as investors have preferred tech names to the detriment of old economy sectors like energy, banking and mining. Those types of industries make up nearly two-thirds of the TSX, which is owned by TMX Group Ltd.
Ten foreign companies listed on the TSX and smaller TSX-Venture exchanges last year, down from 14 a year earlier. Despite the difficult environment, “we are engaged with some now that are going to come to market this year, in this climate,” McKenzie said.
Of course, the activity for newly-public companies in Canada pales in comparison to what’s been raised in the U.S. First-time share sales in the U.S. have pooled in US$13.7 billion through April 3 compared to a paltry $3.5 million on Canadian exchanges, data compiled by Bloomberg show.
Australian uranium miner Paladin Energy Ltd. headlined last year’s new additions after buying fission Fission Uranium. Other new listings of 2024 included Sharp Therapeutics Corp, FireFly Metals Ltd. and Zero Candida Technologies Inc.
Nevertheless, equity financings are down sharply so far in 2025, while investment bankers have blamed volatility and trade policy uncertainty for the drop in stock issuances. Canadian-listed firms raised just $2 billion in the first quarter, down from $2.9 billion in the same period a year ago, according to data compiled by Bloomberg.
TMX Group data show a 39 per cent drop in the value of financings through the end of February, though the number of deals has jumped — suggesting there are more firms doing smaller deals this year than last.
McKenzie said the underlying conditions in the market are actually conducive to more share issuances, despite the lighter activity year-to-date.
Rising market liquidity, falling interest rates and cheap stock valuations in Canada could be supportive of equity capital market deals, according to McKenzie.
“If we didn’t have this noise, I actually believe we would have substantial financing activity now,” he said.
Geoffrey Morgan, Stephanie Hughes and Curtis Heinzl, Bloomberg News
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