Canada’s reliance on public markets is the highest in the world — double that of the next highest country.
It is troublesome, then, that fewer and fewer Canadian companies are choosing to go public. Alarm bells are ringing in this research paper authored by Bryce C. Tingle, QC and J. Ari Pandes and published by The School of Public Policy at the University of Calgary.
Going public has its many advantages, they write. Companies that go public grow faster, grow larger, become more efficient, more productive, and have cheaper access to capital than those that do not.
And yet: “What is evidently causing more and more Canadian executives to avoid going public, despite all these advantages, is a regulatory and governance ecosystem that has grown increasingly hostile to and distrustful of corporate leadership.”
How to reverse this worrisome decline? Tingles and Pandes write of the need to lessen intrusion on corporate governance and to excise the dominant one-size-fits-all governance models often imposed by outside forces, particularly third-party commercial proxy advisors, that have stifled performance and dissuaded businesses from going public in the first place.
Failure to do so would have adverse consequences for Canada’s economy and the country as a whole, they argue.
“Rather than helping Canada’s markets become stronger, public markets have grown substantially weaker, and rather than making Canadian companies better, we now face an environment where companies would rather sell to a foreign buyer and leave the country, than go public here,” they write.
