What if Canada Did an IPO?

Can a private company be worth more than Canada’s entire economy? Some people seem to think so. Every so often, a superstar company, usually in the tech sector, hits a record valuation, prompting comparisons to a country’s GDP.

For example, NVIDIA’s market capitalization surpassed Canada’s GDP in 2025. By May 2026, the chip designer was worth more than the annual GDP of every country except the United States and China.

The reason this comparison doesn’t give us much information beyond the emotional reaction is that the two numbers are measured in different units, so they are incomparable.

Physicists love discussing units of measurement. You can’t compare the temperature outside on a given day to the temperature increase between different days. When economists examine similar dynamics, they usually focus on the distinction between stocks and flows.

Textbooks often talk about taps and bathtubs to illustrate the difference. A stock is a quantity measured at a single instant, such as the water sitting in the bath. A flow is a quantity measured over an interval, such as the water from the tap in litres per minute. The two are linked because flows fill and drain stocks, but they carry different units and cannot be directly compared. 

In our scenario, market capitalisation is a stock. NVIDIA’s roughly $5 trillion, as of mid-June 2026, is the present value of every dollar of profit the company is expected to earn until it stops trading.

But GDP is a flow. Canada’s nominal GDP of about 3.25 trillion Canadian dollars in 2025 (approx. 2.4 trillion US dollars) is the value of all final goods and services the country produced in one year. Comparing these two numbers is like comparing an owner’s income to their house’s net worth.

So what if we do want to get some information from these numbers? The best way to do so is to compare like for like. In our situation, this means imagining what would happen if all of Canada’s economic activity was packaged into a company, Canada Inc., and that company was offered for sale to investors in a public listing, just like an IPO.

This IPO would put a single number on Canada Inc. today by capitalising the profits it is expected to earn in the future. So to  figure out whether a company is worth more than Canada, one has to ask what Canada would list for.

The standard tool is the Gordon growth model, used to value a company’s shares based on its dividends. A flow growing at a constant rate, discounted at a constant rate, has a present value equal to next year’s flow divided by the gap between the two:

Flotation value = Output next year / (Discount rate − Growth rate)

The obvious discount rate is the long-dated Government of Canada yield, about 3.8 percent in June 2026. However, Olivier Blanchard has shown that the safe rate tends to run below the growth rate in advanced economies, and a rate that low cannot sensibly discount a whole economy. So we’re going to price the economy’s output as equity instead, at a rate carrying a risk premium above gilts. (This is the extra yield (or return) an investment offers compared to a UK government bond, which compensates investors for taking on additional default or market risk). We went for a range of 5% to 8% to align with the behaviour of the Canadian stock market and to give us some room to experiment with different valuations. Results are summarised in the table below:

 Discountrate

 Discount rateminus growth 
 Flotation value,CAD
 Flotation value,USD
Multiple ofone year’s GDP 

5%

1.5%
224 trillion
161 trillion

69 times

6%

2.5%
135 trillion
97 trillion

41 times

7%

3.5%
96 trillion
69 trillion

30 times

8%
4.5%
75 trillion
54 trillion

23 times

​Even at a punishing 8% discount rate, which prices Canadian output as riskier than most corporate equity, Canada would still list at twenty-three times its annual output, and at a gentler 6% at forty-one times (159 trillion CAD, or 112 USD). NVIDIA, one of the most valuable companies in history, is worth about $5 trillion. Stock against stock, the company is not larger than the country.  

One criticism of this back-of-the-napkin calculation is that valuations are usually based on profits rather than revenues, and GDP is closer to being a revenue, the whole of national output before it pays wages, settles suppliers’ bills, and replaces worn-out capital.

If accountants and finance experts were involved in a genuine Canada Inc. IPO, they would be interested in capitalising on the residual that an owner could actually bank and would likely end up with a smaller number. But that smaller number would still run into the tens of trillions at the very least.

In short, no private company on earth is worth more than the net present value of the Canadian economy. But the real lesson is to stop comparing stocks with flows.