This is a guest contribution by Johnny Jaswal and Brian Thomas Hall, founding Partners of Jaswal Hall. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.

If you leave things alone, you do not leave them as they are; you leave them to a tide of change.

A recent Globe and Mail article highlighted that two of Canada’s once highly profitable independent investment banks, GMP and Canaccord Genuity, are struggling with losses, lack of deal flow, job cuts and stock trading near all-time lows in the wake of the commodities crash. Given their heavy exposure to resources and the bearish sentiment with respect to commodities, the situation as it stands does not look promising for Canada’s independent capital market participants and leads to the conclusion that they must diversify more broadly into non-resource sectors. Faced with this reality, Harris Fricker, chief executive officer of independent investment bank GMP, stated in November, “we would happily diversify the business more broadly if we felt there were sufficient non-commodity corporate targets to cover; the reality is, there aren’t.”

I found Mr. Fricker’s comments odd and, frankly, concerning on a macro level. As a Partner in an independent shop myself, his comments got me thinking. Why, in the aftermath of a commodities crash, would the head of a major independent Canadian business be in a position where his business could not pursue broader diversification into non-resource based revenue streams due to insufficient non-commodity corporate targets? Are there systemic problems that are holding our independent competitors down and, if so, is that the Canada we want? As I am looking forward to a long and prosperous run as an independent player, these are issues that matter to me. To that end, I decided to add more work to my hectic schedule in a quest to examine Canada’s seemingly uncompetitive capital markets that favour the big banks and the conditions we need to create to foster a competitive environment.