Canada's IPO Market Heats Up: What Weak Jobs Data Means for Investors and Small-Cap Stocks

Canada's Labour Market Shows Hidden Strength

Canada's latest employment report came in weaker than expected, but the underlying details suggest the labour market may be more resilient than the headline indicates. At the same time, renewed activity in Canada's IPO market is raising hopes for a recovery in domestic equities after years of contraction.

BNN Bloomberg spoke with Kelsey Keane, director of equity capital markets at National Bank of Canada, about how investors are interpreting the jobs data, expectations for Bank of Canada policy, recent sector rotation on the TSX and what a strengthening IPO pipeline could mean for Canada's small-cap universe.

Key Takeaways from the Interview

• Canada's employment headline was weaker than expected, but gains in full-time jobs suggest the labour market is firmer than the topline number implies.
• Structural factors such as tariffs and slower population growth are complicating economic signals and making it harder to distinguish cyclical weakness.
• More than $100 billion in Canadian small-cap companies have been taken private in recent years, shrinking the investable universe.
• A growing pipeline of Canadian IPOs could help rebuild the small-cap sector and improve diversification opportunities for investors.
• Recent sector rotation on the TSX reflects a risk-off tone, with consumer-oriented sectors outperforming technology and materials.

Investor Reaction to Jobs Data

As you heard earlier, Travis O'Rourke was talking about how these numbers can be read in different ways, depending on whether you focus on the positives or the negatives. What are you looking at? What's your takeaway?

Kelsey Keane: As you mentioned, the composition of the data isn't as bad as the headline number looks. There were positive gains in full-time employment, which is strong data. I think what investors will be looking at is how central bank policy reacts to this data. What's really interesting is that policymakers are going to have to decipher between structural changes in the economy — tariffs and slower population growth in Canada — and cyclical changes.

Bank of Canada Policy Outlook

What do you think the Bank of Canada will do? The labour market is obviously a huge factor in rate decisions.

Kelsey Keane: Right now, the outlook is still for rates to remain stable in the near term. I think policy will be very data dependent. There's a lot of economic data to come out before the next meeting on March 18, and further throughout the year.

The silver lining, as you said, is that full-time jobs are up, while part-time jobs are down. Some analysts say that's just noise. Do you think it's actually something investors should focus on, especially the part-time aspect?

Kelsey Keane: Once again, I think the takeaway there is positive. Full-time employment is really the heart of the employment number. Part-time jobs reflect employer confidence around everything that's happening with trade negotiations and the broader economy in general.

Developments in the Canadian IPO Space

Let's move on to developments in the Canadian IPO space. AGT Food & Ingredients announcing it's going public again. What do you make of that? The company says it could raise hundreds of millions of dollars in an initial public offering. Do you think that's realistic?

Kelsey Keane: They filed their prospectus yesterday. It's actually for a $460-million IPO. I think it's important to look at the broader backdrop in Canadian IPO markets. Over the last three years, we've seen more than $100 billion worth of small-cap Canadian companies taken private. That's shrunk the small-cap sector and made it harder for Canadian investors to build strong portfolios in this space. When we see a strong Canadian name like AGT Food & Ingredients looking to list publicly, that's a really exciting development.

They were taken private a few years ago. Was there a benefit to that for the company?

Kelsey Keane: Being a public company comes with a lot of scrutiny — quarterly reporting and constant market oversight. When companies go private, buyers are often looking at businesses they believe have more inherent value and an opportunity to monetize that later. For the company itself, being private can provide time to recalibrate and build a stronger, more resilient business.

And then potentially go public again. Let's turn to the markets. It's been an interesting and volatile week for North American equities. The TSX is higher today and U.S. markets are rebounding as well. What's driving that resilience?

Kelsey Keane: It was definitely a rough start to the week. We saw a big rout in technology and materials. By the end of the week, investors may be viewing some of that selloff as overdone. We've seen a lot of sector rotation, with money moving out of tech and materials and into consumer staples and consumer discretionary. That largely reflects a risk-off shift. Today, we're seeing some stabilization.

How should investors think about positioning from here? Should they expect more volatility, and where might they look for relative safety?

Kelsey Keane: We can expect volatility, given everything happening geopolitically. More defensive areas like consumer staples and utilities can offer stability, and fixed income is another place investors are allocating capital. What's interesting is that the volatility index has remained relatively stable despite all the economic and geopolitical developments. That suggests there's still underlying confidence, with investors staying invested rather than moving entirely to the sidelines.

This BNN Bloomberg summary and transcript of the Feb. 6, 2026 interview with Kelsey Keane are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.