Canada’s Market Evolution: CIBC’s Buy-and-Hold Sectors to Watch
CIBC names four emerging sectors poised to challenge Canada’s traditional market giants, from insurance to waste and pipelines.
For years, Canada’s equity market has carried the stereotype of being a haven for banks, energy, and mining. The Toronto Stock Exchange, in the minds of many global investors, was synonymous with financial institutions, oil sands, and resource plays. But CIBC Capital Markets is challenging that narrow view, arguing that the TSX hides a set of long-term, buy-and-hold gems beyond its entrenched oligopolies.
In its latest report, a team led by Ian de Verteuil revisits the “land of oligopolies” thesis from 2019 – an analysis that spotlighted sectors with few players but commanding market dominance, such as railroads, banks, grocers, and telecoms. These stalwarts have delivered enviable returns and made up a hefty slice of the index’s market cap, dividends, and buybacks. Yet CIBC now sees another tier emerging: four “wanna be” oligopolies in life insurance, property and casualty insurance, waste management, and pipelines.
Life Insurance – Scale and Stability
The Canadian life insurance market has consolidated dramatically over the past two decades. The acquisition of Canada Life by Great-West Lifeco (TSX:GWO) and Clarica by Sun Life Financial (TSX:SLF), along with other mergers, has left just four major players controlling over 70 percent of the market. Alongside Great-West and Sun Life, Manulife Financial Corporation (TSX:MFC) and iA Financial Corporation (TSX:IAG) round out the group.
This concentration gives them pricing power, vast distribution networks, and diversification across products and geographies. With steady demand for insurance and wealth management services – and growing exposure to high-growth Asian markets – these companies offer investors consistent dividends and the kind of predictability prized in long-term portfolios.
Property and Casualty Insurance – Domestic Leaders Step Up
In the property and casualty space, foreign insurers have steadily retreated, leaving room for domestic champions to expand. The recent acquisition of Travellers by Definity Financial Corporation (TSX:DFY) underscored the sector’s consolidation trend.
Here, Intact Financial Corporation (TSX:IFC) remains the heavyweight, with a broad underwriting portfolio across auto, home, and specialty coverage. Definity, meanwhile, is leveraging scale and strategic acquisitions to capture more market share. As climate risks and economic uncertainty fuel demand for comprehensive coverage, these players stand to benefit from stable premium growth and disciplined underwriting.
Waste Management – Essential and Expanding
Waste management may not make headlines, but it’s become a quiet powerhouse on the TSX. The sector’s turning point came in 2016, when Waste Connections (TSX:WCN) merged with Progressive Waste, creating a North American leader. More recently, GFL Environmental (TSX:GFL) has delivered strong post-IPO performance, further solidifying waste management as a defensive, cash-generating business.
With high barriers to entry – from municipal contracts to regulatory approvals – these companies enjoy predictable revenue streams and a customer base that’s not going anywhere. As urban populations grow and sustainability concerns rise, the sector’s role is only becoming more critical.
Pipelines – Infrastructure You Can Bank On
Pipelines are Canada’s cash-flow machines in waiting, sharing many traits with the established oligopolies. Like telecom networks or railroads, they are capital-intensive, deliver essential services, and form a critical backbone of the economy. Enbridge (TSX:ENB) and TC Energy (TSX:TRP) dominate the space, with vast infrastructure networks moving oil, gas, and liquids across North America.
These assets are nearly impossible to replicate, thanks to enormous construction costs and regulatory hurdles. That gives today’s incumbents entrenched positions, backed by long-term contracts that support generous dividends and steady expansion projects. For income-focused investors, they remain among the most dependable plays on the TSX.
The Long Game
CIBC’s takeaway is clear: Canada’s market is not just a playground for banks and miners. The “wanna be” oligopolies – in life insurance, property and casualty insurance, waste management, and pipelines – already show the qualities that make traditional oligopolies so successful. High market concentration, essential services, and durable cash flows combine to create reliable, long-term wealth-building opportunities.
For investors willing to look beyond the usual suspects, these sectors offer the stability of Canada’s economic bedrock, paired with growth potential driven by consolidation, innovation, and rising demand. In other words, the next great Canadian buy-and-hold stories may already be hiding in plain sight.