Canada’s largest tech company has recently made steps that could accelerate its potential to become domiciled in the United States (US).
Timed to its fourth-quarter earnings report earlier this month, Shopify listed its New York City office alongside its normally-standalone Ottawa headquarters in a 10-K filing to the US Securities and Exchange Commission (SEC).
“It is officially defcon-1 for Canada’s capital markets.”
Peter Haynes
First noted by TD Securities managing director Peter Haynes in a series of index bulletins, it’s the first time Shopify filed a 10-K form with the SEC. A 10-K form is required from domestic issuers while, up until now, Shopify had been filing the 40-F form used by foreign issuers.
Shopify spokesperson Alex Lyons told BetaKit in an email statement that Shopify is a global company, and chose to voluntarily file the 10-K form “in order to align our disclosures more closely with other software peers we believe our investors are familiar with.”
Haynes also noted that Shopify added a US Employer Identification Number to its filing, and changed how it reports its segmented assets. According to Haynes, Shopify chose to include its current assets as part of its asset calculation in this year’s filing, while last year it only included long-term assets. The change flipped the company’s geographic breakdown from approximately 86 percent Canadian to approximately 78 percent US-based.
Haynes said the Shopify filings could accelerate its potential to be a US domiciled company, but also noted that it now meets the criteria to gain membership into US indices, namely the Russell 1000. Haynes added the index would result in approximately 52.2 million shares, or $6 billion, of demand from Russell indexers and would likely increase the percentage of Shopify stock traded in the US by 5 percent in the long term.
Haynes noted that Shopify’s moves are part of an “existential crisis for Canada,” as other Canadian companies like Barrick Gold and TFI International follow Brookfield Asset Management in explicitly becoming US companies.
“With three of Canada’s largest companies now indicating—either vocally or quietly— intentions to be viewed as a US company, it is officially defcon-1 for Canada’s capital markets,” Haynes said.
BetaKit has asked Shopify if its SEC reporting changes are part of a plan to redomicile Shopify as a US company but did not hear back by press time.
Such a decision by the country’s largest tech company would be shocking to many in Canadian tech. After US President Donald Trump kicked off a trade war with Canada, Shopify CEO Tobi Lütke criticized the implementation of tariffs, writing that he loves Canada and wants it to thrive.
“I built Canada’s biggest tech company here because I know it’s a special place,” Lütke wrote.
Key Shopify leaders like Lütke and president Harley Finkelstein also recently joined 28 Canadian tech entrepreneurs supporting Build Canada, a new platform for entrepreneurs to share policy recommendations for boosting Canadian exports, increasing productivity, and tax reforms. Build Canada was created by recently departed Shopify VP Daniel Debow.
However, according to Haynes, such corporate decisions are not about heart strings.
“If an issuer thinks it can gain significant incremental index demand from US domestic indexers by switching headquarters to the US, then such a move appears to be a no brainer,” Haynes said.
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At the same time Shopify’s leadership is claiming a love for Canada, the company has displayed behaviours some would consider anti-Canadian. Shopify’s strong fourth-quarter earnings call earlier this month was overshadowed by reaction to Kanye West selling a Nazi t-shirt via his Shopify-powered storefront Yeezy.com, which was taken down after nearly two days without public comment on the matter. Reporting from The Logic indicates Shopify took the store down due to the risk of fraud, rather than the Nazi swastika t-shirt being sold.
Shopify has also been actively dismantling its diversity, equity, and inclusion (DEI) initiatives in the new year, quietly shutting down its Build Native program for Indigenous entrepreneurs in January and its Build Black program earlier this month.
Businesswoman and investor Arlene Dickinson recently denounced Shopify’s rollback of DEI initiatives. In a LinkedIn post, Dickinson said the shift is disappointing because Shopify “built its company in Canada on the idea that anyone, anywhere, could start and grow a business.”
The changes coincide with US President Donald Trump’s executive order against DEI, calling the efforts “immense public waste and shameful discrimination,” which inspired large American tech companies like Google, Meta, and Amazon to scale back DEI programs and language, according to TIME.
Shopify was specifically named in an open letter signed by over 350 Canadian tech leaders stating that such DEI rollbacks are the “wrong direction for Canada.”
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Feature image courtesy Shopify.