Canada’s equity markets aren’t just underperforming the S&P 500—they’re structurally disadvantaged. The gap in returns is widening, driven by fundamental weaknesses in Canada’s economic makeup, sector concentration, and sluggish productivity growth. Normalized index values since 2010 highlight the stark underperformance of Canadian equities relative to the S&P 500 (Chart 1).

Chart 1: S&P 500 vs. TSX: A Widening Gap Since 2010