Jeff Foster: Investors enjoy U.S. innovations while Canada hesitates

Canada’s capital markets have long punched above their weight. We built a system that is stable, trusted and globally connected. That stability has served us well, but stability without evolution becomes stagnation.

While we debate incremental changes, the global market continues to modernize at speed. If we do not move with similar urgency, we risk becoming a secondary market for our own companies and investors. This is not about national pride. It is about relevance.

Today, Canadian investors routinely trade on United States markets for superior convenience, liquidity and user experience. Increasingly, they are doing so outside traditional market hours.

Investor behaviour has also changed. Canadians want to trade when it suits them, whether that is early morning or late at night. Extended-hours trading is no longer a niche pursuit; it has become standard in many global markets. Canadian markets largely close at 4:00 p.m. (eastern time), yet investors can trade U.S. equities nearly around the clock.

The implications for Canadian capital markets are significant. An ever-growing number of Canadian companies are dual listed on U.S. exchanges or quoted over the counter in the U.S. Price formation for those Canadian-listed securities happens in the U.S. when Canada’s markets are closed.

Order flow that should contribute to Canadian liquidity, Canadian price discovery and Canadian capital markets instead migrates south. We are effectively outsourcing the trading of our own companies for a growing portion of the day.

Globally, extended-hours participation is rapidly expanding. If our infrastructure does not meet that expectation, investors will continue to route activity to markets that do.

Extending trading hours on Canadian venues would signal that we are prepared to aggressively compete for market share and defend and grow our position in global markets. Currently, while we sleep, the Asia-Pacific region is actively trading and investing in U.S. markets, so extending hours would open Canada up to those same investors hungry for diversification.

At the same time, we would support Canadian companies through added liquidity, data and price formation — anchored at home. There is no practical or structural reason why Canadian-listed companies should not be accessible during those same hours on Canadian exchanges.

Modernization and democratization of capital markets also require rethinking the investor experience.

Most people think and invest in dollars, not shares. They want to invest $500 in a company, not calculate how many shares that buys. Fractional and notional trading have normalized this approach globally. It is intuitive and accessible.