TSX rallies 29% even as delistings dwarf IPOs and 2026 deal pipeline quietly rebuilds
Canada’s stock market is rallying even as its roster of public companies shrinks — and that disconnect is what matters most for your clients.
According to Reuters, the S&P/TSX Composite Index surged about 29 percent in 2025, beating the S&P 500’s 16 percent gain, driven by big banks and mining stocks.
At the same time, there were only two IPOs in 2025 versus 55 delistings on the Toronto Stock Exchange, largely due to take-private deals and consolidation in financials and energy.
BNN Bloomberg reports that since 2023 about $125bn in value has left the TSX through companies being taken private, with 54 firms going private in 2025 and “another forty‑something” in 2024, according to Dan Nowlan, vice chair at National Bank Capital Markets.
He warned that the small‑cap segment is “hollowed out,” and that a shrinking pool of listed small caps raises risks for jobs, head offices and long‑term growth in Canada.
Peter Miller, head of equity capital markets at Bank of Montreal, told Reuters that “a lack of supply, not a lack of demand” is holding back IPOs.
He said the Canadian IPO pipeline is now “the strongest I’ve seen since 2021,” with interest from consumer, resources, fintech and technology names.
Royal Bank of Canada’s Jackie Nixon said her team is working on “a handful” of deals expected to go public in 2026.
Deal quality and scale are shifting as well.
BNN Bloomberg reports that investors increasingly prefer larger IPOs with strong liquidity and potential index eligibility at around $1.8bn in value.
Nowlan said the companies now considering going public tend to be larger than the tech‑heavy small caps that accessed the market in early 2021.
Recent issuance supports that bias.
Reuters said last year’s largest IPO, Rockpoint Gas Storage, raised about $704m in October and is trading roughly 25 percent above its offer price, which JP Morgan’s David Rawlings describes as a “positive precedent” for future deals.
Structurally, small caps face tougher conditions.
Nowlan told BNN Bloomberg that institutional investors feel there are not enough “good‑quality” Canadian small caps, and that the institutional shareholder base for companies under a $1.5bn market cap is significantly smaller in 2025 than in 2020.
He argued that if small caps cannot get fair valuations at home, they are more likely to sell to foreign strategics, with a real risk of jobs and decision‑making leaving Canada.
Tax and policy also sit in the backdrop.
Nowlan said on BNN Bloomberg that Canada has “punished risk‑taking” with a “debilitating tax system,” pointing to incremental tax increases since the financial crisis and a recent, ultimately reversed, push to raise capital gains taxes as factors that discouraged growth investing.
