The biggest companies on the Toronto Stock Exchange get most of the attention, but the company that owns Canada's largest stock market is pushing hard to get into financing for smaller and smaller companies.
TMX Group Inc. chief executive officer Tom Kloet was in Ottawa Tuesday, speaking to the Economic Club of Canada and meeting government officials. His message, laid out in a speech to the Economic Club, is that the company is very interested in helping to develop a crowdfunding market in addition to the market for private shares of companies that is currently under development.
The company is "very interested" in crowdfunding, Mr. Kloet said.
"We don't know exactly where this financing method will go, but it is also understood that, in time, this will be a very important capital raising tool for Canadian entrepreneurs, particularly for the smallest companies. Given that Canada is a nation of SMEs [small and medium-sized enterprises], it could be transformational."
The company has also started work on a new private market venture that will be rolled out later this year, creating a venue where investors can trade shares of companies that are not yet listed on stock markets. In both cases, the pitch from TMX is that its history in vetting companies for markets makes it the place where investors can be the most confident going to trade.
"We think it is helpful to the market to be involved in other areas like exempt market, and maybe crowdfunding one day, by providing structure and oversight. Our involvement itself would provide a measure of confidence."
The TMX Group isn't completely convinced of the business case for crowdfunding, Mr. Kloet said. "No one is sure where these financing methods like crowdfunding are going. So we aren't really sure what's in it for us directly just yet."
He said the message to the government on crowdfunding is that he would like to see the market, as it develops, have consistent regulation across the country.
He also laid out some other ideas that the government could pursue to help small and medium-sized businesses outside the resource sector. He pointed to flow-through shares, which are tax-efficient ways to invest in junior mining and energy companies.
"Should they be available for technology companies as well?," he asked. Also, there is a research and development tax credit that is not available to public companies, but maybe should be, he suggested.
"One area that we spend a lot of time on is the innovation sector. There is a lot of exciting work being done by companies in this space and I think they would really benefit from formal programs that support their growth."
In an interview, Mr. Kloet said he wanted to push the message that there are areas of the economy aside from resources that could use help.
"We have a pretty efficient capital-raising environment but the reality is much of its focus over the past six-seven years has been in the resource sector. One of our aims is to extend that and to address the needs of more sectors of the economy."