Canadian IPOs Are Back, and the Numbers Say This Isn't a Head Fake

Between January and June, 130 companies raised equity capital on Canadian exchanges. That figure alone won't turn heads, until you notice it represents a 44% jump from the same period last year, according to London Stock Exchange Group data. The money raised climbed even faster: $10.8 billion, up 84% year-over-year.

This isn't a statistical blip dressed up as a trend. IPO activity, the part of the market that dried up completely during the 2022-2023 rate shock, is actually moving again. Forty-one IPOs priced in the first half of 2024. That's more than double the 18 that made it to market in the first six months of 2023. And the money they raised, $2.4 billion, is nearly four times last year's $642 million.

The last time Canadian equity markets saw this kind of momentum was before the Bank of Canada's hiking cycle began. When the policy rate sat at 0.25%, anything could price. When it hit 5%, nothing could. The calculus was simple: why buy a newly public growth story when GICs paid 5.5% risk-free? The IPO window didn't just narrow. It welded shut.

The Debt Side Tells the Same Story

Debt issuance followed the same arc, just with bigger numbers. Canadian borrowers raised $196.3 billion in the first half, up 26% from $155.8 billion a year earlier. Government of Canada issuance climbed 46% to $95.8 billion. Provincial borrowers added another $44.9 billion, up 35%. Corporate debt rose a more modest 6%, to $41 billion, but the directionality is what matters. Every category moved up and to the right.

The common thread is cost of capital. When rates were rising, issuers pulled back or waited. When rates stabilized, they tested the market. When it became clear that the Bank of Canada had finished hiking and might even cut, the backlog started clearing. That's what these numbers represent: not speculative froth, but deferred business getting done.

The IPO rebound deserves particular attention because it's the part of the market that shuts down first and reopens last. Debt can always price if you're willing to pay up. Follow-ons and private placements can get done quietly with existing investors. An IPO requires genuine two-way interest from institutional buyers who don't already own the name. It requires pricing discipline, a credible equity story, and enough certainty about the rate environment that a long-only fund is willing to lock up capital for three to five years. When IPOs come back, it means the market believes something has changed.

What Changed

The Bank of Canada cut its policy rate in June, the first reduction since March 2020. That was the explicit signal. The implicit one came earlier, when inflation data started behaving and central bank language shifted from "higher for longer" to "data-dependent." By April, issuers and their underwriters had already started preparing filings. The June cut confirmed what the market had priced in: the worst was over.

This doesn't mean every name will work. Plenty of 2024's IPOs will trade below issue price by year-end. Some will deserve to. But the window being open matters more than whether every deal through it is good. When 41 companies can raise $2.4 billion in six months, the market has an opinion about forward returns. The opinion is that equity risk is worth taking again.

The debt numbers reinforce that view. Governments and provinces aren't market-timers, but corporates are. The 6% increase in corporate debt issuance, modest as it sounds, represents real treasury departments making real calls about locking in funding while the window is favorable. They see what the IPO market sees: the cost of waiting went up.

Canadian capital markets spent two years in a defensive crouch. The first-half numbers say the crouch is over.