Darcy Morris
Special to The Globe and Mail
Another one’s gone. Last week, Guardian Capital GCG-T, one of Canada’s oldest and most respected investment companies, announced its sale to Desjardins Group in a $1.67-billion take-private deal − at a 66-per-cent premium to its share price.
The transaction removes yet another high-quality company from the TSX X-T and hands control to a nonpublic buyer. It’s a familiar pattern – and it’s accelerating.
Once a source of national pride, Canadian public markets are now caught in a cycle of erosion. Great companies are leaving or never arriving. Small- and mid-cap stocks trade at discounts, lack coverage and are prone to manipulation. Domestic investors have fled. Institutional capital flows south. Our stock market is shrinking.
This isn’t just about Bay Street. It’s about Main Street. Our pensioners, savers and small investors all rely on healthy public markets to build wealth and participate in the upside of Canadian enterprise.
But the trend is increasingly clear: Canada is experiencing a negative selection bias in its public markets. The best companies are being acquired or taken private, while the ones left behind are often lower quality, undercapitalized or facing structural challenges.
Guardian Capital joins a growing list of high-quality Canadian companies that have disappeared from public markets over the past 12 months: Canadian Western Bank, Héroux-Devtek, Copperleaf, Sleep Country, Softchoice, First National, Andlauer and Parkland, to name a few. These aren’t struggling businesses. They’re precisely the kind of companies we should want in our public markets − resilient, innovative and Canadian.
Take Parkland Corporation, a strong, diversified fuel and convenience retailer based in Calgary. In May, 2025, it was acquired in a US$9.1-billion deal by Sunoco, offering shareholders $44 per share in cash or the option to roll into equity.
Even with Sunoco’s commitment to preserve Canadian jobs and operations, the message was clear: capital finds more attractive terms and support outside Canada.
Meanwhile, the index itself is becoming less hospitable to quality businesses. As of July, 2025, Metals & Mining made up 30.8 per cent of the index, up from 17.8 per cent a decade ago. Oil, Gas & Consumable Fuels is now 17.4 per cent, up from 13.6 per cent in 2015. Add in Energy Equipment & Services (4.4 per cent), and nearly half the Canadian index (48.2 per cent) is now cyclical, volatile and dependent on external factors.
In other words, our Canadian index has become commoditized, dominated by sectors with limited pricing power and minimal innovation. High-quality, recurring-revenue businesses − the kind that long-term investors seek − are being steadily siphoned off or crowded out.
This isn’t isolated. In the past 18 months alone, nearly 100 Canadian public companies were taken private in deals worth more than $50-billion − about half backed by private equity.
Meanwhile, promising private businesses are delaying or avoiding IPOs altogether, opting instead for private equity or U.S. listings where valuations and liquidity are better.
Why does this matter? Because public markets are supposed to be a mechanism for shared prosperity and price discovery − not a clearance aisle for whatever is left behind.
If we don’t reverse this trend, Canada risks becoming a satellite economy with fewer head offices, less innovation and diminished investor participation.
What can we do? We need a deliberate national effort to rebuild trust, liquidity and dynamism in our capital markets. That means encouraging pension funds and institutional investors to re-engage with Canadian equities, reducing regulatory friction and costs for small-cap companies, increasing enforcement and transparency to better protect retail investors, and celebrating − rather than punishing − entrepreneurial ambition in the public square.
Capital is mobile. If we want it to stay here, we need to give it a reason. A vibrant, inclusive and trusted public market should be part of our national identity.
Otherwise, we’ll keep watching our best companies – and our future − quietly exit stage left.
