Toronto-based fintech Wealthsimple has obtained regulatory permission to offer forecast contracts in Canada, meaning it could soon allow its customers to essentially bet on the likelihood of future events such as climate disasters and economic data releases.
Wealthsimple confirmed the development, which was first reported by the Globe and Mail, in a statement. “We have not announced any product plans at this time,” the company added.
The fintech is the second entity to receive this kind of approval by the Canadian Investment Regulatory Organization (CIRO), which oversees investment dealers, mutual fund dealers and trading activity.
Last April, Interactive Brokers expanded its offering of prediction trading through forecast contracts into Canada.
In a statement, a CIRO spokesperson said that the regulator doesn’t comment on the regulatory status of individual firms, adding that trading of forecast contracts is subject to certain “terms and conditions.”
As platforms such as Polymarket and Kalshi become more popular in the United States, one academic worries that the growth of prediction trading in Canada could harm retail investors — mainly everyday Canadians — without appropriate oversight.
“Pushing this onto the retail market is asking for trouble,” said Werner Antweiler, professor at the UBC Sauder School of Business, who compared prediction trading to gambling.
“In Canada, we need to be stepping very carefully into this territory, making sure that investors are protected if such markets are allowed.”
Prediction trading enables investors to purchase “yes” or “no” contracts based on what they think the outcomes of a certain event will be.
In Canada, the Interactive Brokers offering of forecast contracts has some restrictions, according to law firm Borden Ladner Gervais LLP, who advised the company on its Canadian expansion. For example, investors cannot bet on the outcome of elections.
They can bet on questions such as “will the United States economy enter a recession by the end of the first quarter of 2026?” or “will 2026 be the warmest year on record?”
Each contract is priced between $0.02 and $0.99 USD, based on the market’s assessment of probability. If the investor ends up right, the contract settles at $1. If not, the investor gets nothing.
Interactive Brokers says that forecast contracts can help investors manage risks amid global economic and geopolitical uncertainty by hedging against undesirable outcomes.
But Antweiler, who ran a not-for-profit prediction market experiment at UBC, found that unsophisticated investors are drawn to high-risk positions, meaning they are more prone to losing money. He also said that prediction markets tend to attract younger, male investors.
Jean-Paul Bureaud, executive director of FAIR Canada, which advocates for investor rights, said he is concerned that once these products are treated as a common feature on an app, retail use could expand quickly.
“In that situation, investor harm can outpace the development of effective regulatory protections, increasing the risk of significant retail losses,” Bureaud told the Star.
In 2017, the Canadian Securities Administrators (CSA) prohibited the advertising, offering and trading of so-called “binary options,” but there is an exception for approved CIRO members.
The Ontario Securities Commission referred the Star’s inquiries about risks of prediction trading to the CSA, the umbrella organization of provincial securities regulators. The CSA did not provide a response by the Star’s deadline.
“For most retail investors, prediction markets look and behave much more like online gambling — fast, speculative, and event‑driven,” said Bureaud.
“Calling them ‘markets’ doesn’t change the risk or make them appropriate for everyday investors.”
