Ontario’s securities regulator says it is caught in a balancing act: trying to stop Canadian companies from relocating to the U.S., while strengthening Canada’s defences against a rise in threats like fraud and insider trading. 

Speaking on stage at the Ontario Securities Commission’s annual symposium in Toronto on Thursday, CEO Grant Vingoe said Canadian capital markets risk facing a “hollowing out.” A looser and more favourable U.S. regulatory environment, including in sectors that the Trump administration has supported, like crypto, could entice Canadian companies to move there.

To combat this, the commission is focused on both short and long-term measures to reduce regulatory burdens. Last week the Canadian Securities Administrators (CSA), said it would waive certain paperwork requirements for companies angling to go public and give firms more flexibility to raise capital. CSA is Canada’s umbrella group for provincial securities regulators, including the OSC. 

“My hope is these additional mechanisms will allow independent dealers to participate, because they’re often the engines for new ideas,” Vingoe said.

The CSA paused its work on climate and diversity-related disclosure requirements on Wednesday, citing risks to the country’s competitiveness. The move is intended to “support Canadian markets and issuers as they adapt to the recent developments in the U.S. and globally,” according to the OSC release.

“Clearly we’re going to take some heat around the pause,” OSC board chair Kevan Cowan said on stage. “The theme here, obviously, is competitiveness and access to capital.”

Canadian companies often leave for a chance at U.S. index inclusion, Vingoe says, and the OSC is looking at that issue so “Canadian companies can stay in Canada.” The S&P Dow Jones Indices, which oversees the S&P/TSX Composite Index, said in March it is considering letting companies list on both U.S. and Canadian stock exchanges.

IPOs on Canadian exchanges have stalled over the past few years, with insiders expecting a  rebound this year. But market volatility has left most companies planning to go public delaying their plans to the fall or early 2026. There were no new corporate IPOs this year on the Toronto Stock Exchange or Venture Exchange last quarter, while the smaller-cap Canadian Stock Exchange saw only two. 

Most of Canada’s companies are small and medium-sized businesses, and Vingoe wants to ensure they stay. “I worry about that ecosystem, and I want to make sure that we adapt the environment to preserve those companies in Canada,” he said.

But the “OSC has a job to do too,” Daniel Daviau, chief executive of wealth management firm Canaccord Genuity said, in a later panel. It’s “a fact” that multibillion dollar companies will go to the U.S.’s deep capital markets, he added. “We need to target our securities legislation here to small-and mid-cap companies and a lot of [natural] resource companies.” 

Canadian investors’ lower risk appetite in specific sectors they don’t fully understand disincentivizes them from partaking, he said. When investors better understand their risks, it  lowers the cost of capital and lifts up valuations, Daviau said. “Be good at certain areas, and you’ll attract all the capital,” he said.

Meanwhile, the rapid pace of U.S. deregulation and an unstable geopolitical environment means it’s easier for wrongdoers to “find a place,” Vingoe said. The increasing volume of scams, fraud, insider trading and corruption are “enabled by an atmosphere in which ‘anything goes’ and the traditional norms are not being observed as they have in the past,” he added.

But Canada must find a way to balance the perceived threats while keeping the common goal of bolstering competitiveness in sight, Vingoe said.