In Part One of this series, we covered the decision: the real reasons companies go public in Canada, what founders and business owners give up, and the tax consequences that most people only discover mid-process. If you have not read it yet, start there.
This article takes the next step. The decision has been made to go public. Now the question is what the process actually looks like.
Going public in Canada follows a defined sequence of events, involves a team of advisors with specific roles that need to be engaged in a specific order, and carries a cost structure that is larger and more persistent than most business owners expect. Several requirements (most notably the IFRS conversion) have a way of catching companies off guard when they are discovered too late, delaying the process.
This series of articles takes the accountant's perspective. Part Two covers the four paths to a public listing, what each Canadian exchange actually requires, the IFRS conversion reality, a full cost breakdown, the phase-by-phase timeline, and how to sequence the process correctly from first advisor engagement to listing day.
Most founders and business owners picture "going public" as one thing: an IPO. It is not. There are four distinct transaction structures in Canada, each with different costs, timelines, regulatory requirements, and practical implications for the company making the decision.
The most visible path. A company files a prospectus with the applicable securities regulator, raises capital through a public offering underwritten by an investment bank, and lists on the exchange. This is the highest-profile route and often the most expensive. It usually requires a full underwriting syndicate, significant legal and audit work, and direct engagement with regulators through a formal review and comment process. For larger capital raises at established businesses, it remains the right choice. For earlier-stage companies, it is often not the right path to take.
An RTO involves acquiring a company that is already listed to gain public market access without going through the full prospectus process. It is faster and typically less expensive than a traditional IPO. RTOs are suited to companies that want a public listing but are not ready for the rigour of the traditional route, or where speed and cost are the primary considerations. One important clarification: the target is not necessarily a shell. It may have prior operations, existing shareholders, and residual liabilities, and those details need to be assessed carefully before the target is selected.
The cost depends on which kind of target you are buying. If it is just a shell, the value (or cost, depending upon how you look at it) is usually around $500,000 and sometimes more: that is the cost of the equity you will give up to the shareholders of the shell. If the target has an operating history, there is no comparable rule of thumb. The price is set by relative valuation, meaning your shareholders and the target's shareholders negotiate what percentage of the combined company each side holds, and the target's operations, assets, and liabilities all feed into that number. Expect additional valuation and due diligence cost on that path, plus legal work to deal with residual liabilities or to unwind a legacy business the combined entity does not want.
The TSX Venture Exchange's CPC program offers a structured alternative. This is also a reverse takeover, but with a key distinction: the CPC is a clean shell that has not had prior operations. It has been formed specifically to raise capital and then acquire a private operating business through a qualifying transaction. The CPC usually has cash to fund some or all of the go-public process and provide working capital after the qualifying transaction closes. This structure is common with junior resource companies and earlier-stage businesses across industries.
A listed blank-cheque company formed to acquire a private business. Similar in logic to a CPC but typically at a significantly larger scale. SPACs gained widespread attention in the US market and are present in Canadian markets as well. For most growth-stage companies, a CPC or RTO is a more common and accessible path.
Which path is right for you depends on company size, sector, capital requirements, timeline, and readiness. A specialized accounting advisor should be part of that conversation before any transaction structure is selected.
Selecting the right exchange is not just about prestige. It determines your listing requirements, the regulatory framework you operate under after listing, the type of transaction available to you, and the auditor requirements that flow from the listing structure. There are three exchanges to understand.
The Toronto Stock Exchange (TSX) is the senior exchange and carries the highest standards. Listing on the TSX requires meeting minimum financial thresholds for market capitalization, earnings, and net tangible assets that vary by industry and listing category. The TSX is the destination for companies that have achieved meaningful scale and are raising capital at a size that justifies its higher regulatory and governance requirements. For most growth-stage companies, the TSX is a longer-term objective, not the starting point.
The TSX Venture Exchange (TSXV) is the junior exchange and the most common listing destination for growth-stage companies going public in Canada. The TSXV operates in two tiers with different financial requirements. Tier 1 companies have stronger financial profiles and lower ongoing compliance costs; Tier 2 has more flexible standards. The TSXV has active markets for mining, energy, technology, and life sciences companies. It also runs the CPC program described above.
The Canadian Securities Exchange (CSE) operates at the entry level with the lowest financial thresholds and has seen significant growth in listings, particularly in technology, cannabis, and cryptocurrency. The CSE has a streamlined listing process and faster review timelines for eligible issuers, and is very entrepreneur-friendly. For companies in those sectors or at the earliest stages of public company formation, the CSE is worth serious consideration.
For companies looking to access US investors without a full SEC registration, the OTCQX Market allows CSE, TSX, or TSXV-listed companies to trade in the US using an exemption available to qualified foreign private issuers. This is the standard first step for Canadian companies seeking US investor exposure. The costs and obligations of a direct US listing were covered in Part One of this series.
Work with your advisors to determine the best exchange for you. The exchange you target shapes the transaction structure available to you, the type of auditor you need, and the regulatory pathway your deal will follow.
This is the preparation step that adds the most unplanned time to the going public process. It is also the one most commonly started later than it should be.
Most private companies in Canada report their financial results under ASPE (Accounting Standards for Private Enterprises). Most CSE, TSX, and TSXV listings require two or three years of audited financial statements prepared under IFRS. The gap between those two accounting standards is where many companies lose months they had not planned to lose.
The requirement is not simply "get your financials audited." If you have been reporting under ASPE, or any non-IFRS generally accepted accounting principles, a conversion is required and it takes time. Then the new IFRS statements have to be audited. That is a two-step process, and both steps take meaningful time. The conversion itself typically runs one to two months, depending on the complexity of the business, the quality of existing records (both accounting and legal), and how different ASPE and IFRS treatment is for the company's specific operations. Only after the conversion is complete can the audit of the financial statements commence.
Companies that discover this requirement only after engaging a securities lawyer (often two to three months into the process) discover that the delay has real costs. Advisor fees continue accumulating. Management attention stays divided. Market windows can close.
For companies planning to pursue both Canadian and US listings, or have specific US shareholder compositions, the audit firm must also be PCAOB-registered. The pool of firms that qualify is smaller, and early engagement matters. The Forbes Andersen audit and assurance team has direct experience helping companies navigate both the IFRS conversion and the audit requirements across listing venues.
The takeaway is simple: if you are seriously exploring a public listing, find out your IFRS status before you do anything else. Some IFRS conversions and adoptions are more straightforward than others. It will shape your timeline more than almost any other single factor.
Most founders and business owners who have explored a public listing have some sense of the upfront costs. Most underestimate the ongoing ones. Both matter, and both need to be modelled before you commit.
Underwriter commissions on a traditional IPO typically run 5 to 10 percent of gross proceeds. For a $10 million raise, that is $500,000 to $1 million in commission before a dollar reaches the company.
Legal fees are the second major line item. Even for a small go-public transaction, legal fees often land between $300,000 and $500,000 or more. Sometimes you can get away with a smaller firm or sole practitioner to bring the cost down, but not often. The securities law work required (prospectus or listing statement preparation, regulator filings, exchange approvals, and due diligence) demands specialist counsel, and specialist counsel charge accordingly. Generalist corporate lawyers are not a substitute.
Audit and accounting fees add $150,000 to $300,000 or more. This covers the IFRS conversion work if required, the audited financial statements for the required period, and the review and advisory work that feeds into the prospectus or listing statement. Companies starting from ASPE that need two or three years of IFRS-compliant audited financials will land at the higher end of this range.
The fourth cost rarely appears in financial models but is real and significant: senior management time. Going public typically consumes six to twelve months of senior management attention before a dollar is raised. The CEO and CFO are deeply involved throughout the process. So is the board. That is bandwidth taken from the business during one of the most demanding stretches of its growth, and it needs to be planned for.
The costs do not stop at listing. Public company compliance carries a recurring annual cost structure that most founders and business owners significantly underestimate before going through it.
Annual securities filings and continuous disclosure obligations are non-negotiable and do not simplify over time. The Annual Information Form, management information circular, press releases, and material change reports go out on a time-limited defined schedule. Quarterly financial reporting (interim financial statements and MD&A) is due every three months, with CEO and CFO certification on each filing. Audit committee requirements and independent director fees add to the governance cost. Transfer agent fees, annual stock exchange listing fees, and ongoing securities legal costs round out the picture.
For most companies, the incremental annual cost of being public (above what a comparably sized private company would spend) runs several hundred thousand dollars per year. It scales upward with company size and complexity. This number needs to be part of the decision, not a surprise that arrives after listing.
For companies considering a US listing, be warned: The cost to list and operate as a US public company runs two to three times higher than in Canada, both upfront and on an ongoing basis. SEC registration, additional legal and audit fees, Sarbanes-Oxley compliance, US securities counsel, and PCAOB-compliant audits and quarterly reviews apply across the board. A direct US listing generally makes sense for companies that specifically need to raise more than $50 million in US capital. Below that threshold, the compliance burden and cost typically outweigh the capital access benefit.
The often-cited six-to-twelve-month timeline for going public in Canada assumes something important: that preparation started early and in the right sequence, and that no significant surprises emerged during the process. For well-prepared companies, six months is achievable. For companies that discover gaps mid-process, it extends, often by a meaningful amount.
Here is what the process looks like, phase by phase.
This is where the accounting and tax work happens, and it is the phase that starts earlier than most companies expect. Pre-IPO tax planning, corporate restructuring, and shareholder planning (CDA access, LCGE triggers, share class reorganizations) need to be done before going public and require time to execute properly. Counsel is engaged. IFRS conversion begins here if required. The audit firm is engaged to start on the required financial statements. Board and governance structure is assessed and strengthened, because underwriters and regulators will evaluate it. This phase is often the most consequential in terms of value preserved for shareholders, and the most often underinvested.
The full advisory team is assembled. Securities lawyers are engaged alongside the accounting advisor. The investment bank or broker begins due diligence, assesses market conditions, and structures the offering. Deal terms and qualifying transaction structure are negotiated in this phase. Financial projections are prepared and stress-tested. A data room is assembled. The underwriters put a syndicate together and begin selling to the market.
The document-intensive phase. The prospectus or listing statement is drafted, reviewed, revised, and filed with the applicable securities regulator. Comment letters from the regulator follow: multiple rounds is the norm, not the exception. Each round requires a detailed written response and document revisions. The quality of the initial filing directly determines how many rounds are needed. Brokers are actively taking orders and building the book of buyers.
For larger go-public transactions there may be road shows, investor presentations, price discovery, and final offering size determination. Final approvals are received from the exchange and the regulator. The offering is re-priced if required and closes.
Trading begins. Continuous disclosure obligations start immediately. The first quarterly reporting cycle is weeks away. The ongoing compliance requirements covered in Part Three of this series begin on listing day.
Significantly longer when IFRS conversion has not started early, when governance requires substantial build-out, or when the regulatory comment process runs long. The companies that hit the shorter end of the range are the ones that have already started Phase 1.
The prospectus is the central document in a traditional IPO. The listing statement performs the same function for RTO and CPC transactions. Both require the same level of disclosure rigour: the regulatory pathway differs, not the standard.
A prospectus is filed with the applicable securities regulator (the Ontario Securities Commission for Ontario-based companies, the British Columbia Securities Commission for BC-based companies, or through a coordinated multi-province review process). It must disclose all material information a reasonable investor would want before purchasing securities.
The standard components include: audited financial statements for the required period prepared under IFRS; a Management Discussion and Analysis (MD&A); a detailed description of the business and its operations; risk factors; management team bios and compensation disclosure; material contracts and agreements; and the use of proceeds from the offering.
A listing statement, used in RTO and CPC transactions, achieves the same disclosure standard through a different process. The exchange reviews it directly, in many cases alongside the securities regulator. The timeline is typically shorter than a full prospectus, but the completeness and accuracy required are not lower.
Expect multiple rounds of comment letters in both cases. Regulators identify gaps, ask for clarification, and sometimes require material changes to the document. The initial filing quality determines how many rounds you go through.
The practical implication: both documents are built largely from information the company must have organized before drafting begins. Audited financials, a clear business description, identified and documented material contracts, a disclosable management team. The companies that move through Phase 3 fastest are the ones that arrive with that groundwork already completed.
Most companies get this wrong. They call the investment banker first because that is the relationship they have, or because the banker reached out. The banker builds excitement, sets a timeline, and then two months later the company discovers the IFRS conversion has not started, the audited financials do not cover the required period, and the accounting advisor is working backwards against a deadline that was set before the foundational work was assessed.
Here is the right sequence, and what each advisor is actually doing in the process.
Ideally the entire process is coordinated by a single advisor who supervises all the professionals required. The pre-IPO tax and corporate planning work that preserves shareholder value must happen before the company is publicly committed to a timeline. CDA access, LCGE triggers, share class reorganizations, and corporate restructuring require planning time and execution time. Missing these windows has real financial consequences for shareholders and cannot be reopened once the company has listed. The accounting advisor(s) would bring in the tax person, and also assesses the IFRS situation early, identifies auditor requirements and hires the auditor, and begins or coordinates conversion work if needed.
Forbes Andersen Limited has been in this accounting advisor role on many going public transactions: preparing projections, converting financial statements to IFRS, writing MD&A, quarterbacking auditors and lawyers, assisting with building and vetting prospectuses and listing statements, and taking some of the pressure off management during a process that demands a lot from the company's leadership team. That work needs to start earlier than most people expect.
Securities law, prospectus or listing statement preparation, and securities commission filings require specialists. Generalist corporate lawyers are not equipped for this work. Bringing a good securities lawyer onboard at the same time as or shortly after the accounting advisor is mission critical. The two work together through the document preparation and regulatory review phases.
The underwriter leads the offering syndicate, guides pricing and marketing strategy, and conducts its own due diligence. Often a syndicate of banks is assembled to raise capital alongside the go-public process. Road shows, investor presentations, and many meetings with management follow. The investment banker should be engaged once the accounting and legal advisors are hired, not before.
Two or three years of audited IFRS financials are required for most listings. The audit engagement must start early because the work cannot be rushed without compromising quality and regulatory compliance. If the company is pursuing both Canadian and US listings, the audit firm must be PCAOB-registered. That requirement limits the eligible pool of firms and makes early engagement even more important. Generally, if the investment bankers / brokers throw up a green light on the go-public, we move to hire auditors right away. Our preference is to hire an audit firm that will stay with the Company after the go public.
Many private companies pursuing a public listing do not have the internal finance capability for public company reporting. Fractional CFO support can fill that gap during the process (you will need one for your Deck!) and after listing, when quarterly reporting obligations begin immediately and the internal team is often still building capacity. Engaging a firm like Forbes Andersen provides access to a group of experienced professionals with the ability to scale when it is needed.
The investment banker conversation is exciting. The accounting and legal foundation conversation is less glamorous. But the latter determines whether the timeline set at the beginning is actually achievable, and whether shareholders capture the full value they built before the listing closes.
Going public in Canada is not a mysterious process. It is a defined sequence of steps with clear requirements, and the companies that navigate it well are the ones that start early and get the advisor sequence right.
The ones that struggle discover requirements they were not expecting (a missing period of audited financials, an IFRS conversion that has not started, a governance structure that needs significant work) when they are already committed to a timeline and deep into the process. Understanding what you are committing to before the process starts, not during, is what separates a smooth transaction from a protracted one.
Part Three of this series covers what comes after listing: the ongoing reporting obligations, governance requirements, and compliance costs that define life as a public company in Canada.
If you are working through the going public decision, the accounting and tax work should start before you commit to a timeline. Reach out to our team to discuss where you are in the process and what the realistic path forward looks like.
Six to twelve months for well-prepared companies. The timeline extends when IFRS conversion has not been started early, when audited financials do not cover the required period, or when governance requires significant build-out. Transaction structure also matters: a CPC or RTO typically moves faster through the regulatory process than a traditional prospectus IPO.
A prospectus is used in a traditional IPO and filed directly with the applicable securities regulator. A listing statement is used in RTO and CPC transactions. Both require full disclosure of financials, management, and business operations. The listing statement pathway is typically faster, but the disclosure standard is not less rigorous.
The TSX has the highest financial thresholds: minimum requirements for market capitalization, earnings, and net tangible assets vary by industry. The TSXV has two tiers with more flexible standards and is the most common listing destination for growth-stage companies. The CSE has the lowest thresholds and has grown significantly in relevance for technology, cannabis and resource companies. Requirements vary by tier and company type within each exchange.
Not always in the same way as a traditional IPO. RTO and CPC transactions can be structured without a full underwriting syndicate, though investment banking guidance on deal structure, pricing, and investor introductions is often still part of the process. Theoretically, if you have enough cash, you don’t need to raise any money and therefore don’t need an investment banker or broker involved… like if you are going public for liquidity reasons. But there are requirements for a minimum number of shareholders so you might need one if you don’t have enough.
Most private companies report under ASPE, or sometimes even non-GAAP. Converting to IFRS requires restating financial statements across the required period. Once the conversion is complete, the new IFRS statements must be audited. The full process typically adds a few months to preparation, depending on company complexity and the quality of existing records.
Annual securities filings, quarterly financial reporting, securities lawyer fees, audit costs, transfer agent fees, investor relations, and annual exchange listing fees add up to several hundred thousand dollars per year for most companies, scaling with size and complexity. Ongoing costs are covered in more detail in Part Three of this series.
Mike Johnston, CA, CPA, is a partner at Forbes Andersen LLP specializing in going public transactions and financial reporting (IFRS, ASPE, US GAAP). If you would like additional information regarding your organization’s going public or financial reporting requirements, Mike can be reached at mike@fa.ca or 416-947-0464 ext 232. This article is for informational purposes only and does not constitute financial or other advice.
