New forecast contracts let Canadians price political and climate risks like any other trade
A Canadian robo‑advisor is about to let clients bet on inflation, climate data and other market‑moving events — and regulators are only just catching up to what that really means.
Wealthsimple Inc. says it has received approval from the Canadian Investment Regulatory Organization (CIRO) to offer “futures and forecast contracts tied to economic indicators, financial markets and climate trends” to Canadian investors, according to Financial Post.
The Toronto‑based firm has not announced when it will launch the product, and told the Toronto Star, “We have not announced any product plans at this time.”
As per the Star, Wealthsimple is only the second firm to receive this kind of permission from CIRO. Interactive Brokers Canada Inc., an automated global electronic broker, expanded its offering of prediction trading through forecast contracts into Canada in April 2025.
Bloomberg reports that Interactive Brokers allows Canadians to trade on events such as US Federal Reserve decisions, inflation data and the weather, according to Jean‑Francois Bernier, managing director of the broker’s Canadian unit.
According to Financial Post, these products fall under the broader banner of prediction markets — trading venues where users buy and sell contracts tied to real‑world events ranging from sports and politics to the economy.
The mechanism is simple: investors can buy “yes” or “no” contracts based on how they think a particular event will play out.
The Star explains that in Canada, Interactive Brokers’ forecast contracts let investors 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?”
The Star reports that each contract is priced between US$0.02 and US$0.99, based on the market’s assessment of probability.
If the investor is right, the contract settles at US$1; if not, the investor gets nothing.
Interactive Brokers says forecast contracts can help investors manage risk amid global economic and geopolitical uncertainty by hedging against undesirable outcomes.
For example, as per its launch material cited by Financial Post, if an investor believes inflation will rise above a certain level, they can buy a “yes” contract, or a “no” contract if they think it will not.
But regulators have drawn firm boundaries.
Bloomberg notes that Canadian watchdogs remain more reluctant than US regulators to allow a broad range of bets.
While newly approved firms can offer certain forecast contracts, some of the hottest US prediction markets — notably sports and elections — are not available in Canada.
The Toronto Star adds that, under the Interactive Brokers model, investors cannot bet on election outcomes.
The Canadian Securities Administrators (CSA) prohibited the advertising, offering and trading of “binary options” in 2017, but there is an exception for approved CIRO members.
Bloomberg reports that even contracts of 30 days or longer, which fall outside the CSA’s binary‑options restriction, are not automatically lawful for retail sale.
Noah Billick, a partner and director of regulatory, funds and compliance at Renno & Co., told Bloomberg that “Canada appears to be permitting some forecast contracts on a controlled basis through a registered dealer structure, not broadly legalizing prediction markets.”
Enforcement has already reached some players.
Bloomberg reports that Blockratize Inc. and Adventure One QSS Inc. were penalised by the Ontario Securities Commission for allowing residents to use Polymarket between 2020 and 2023, agreeing to pay more than $250,000 and accept a two‑year market ban.
CBC notes that buying and selling binary options has been banned Canada‑wide since 2017, and that any prediction market services not covered by that ban may be treated as “securities, derivatives or both” and must comply with existing rules.
Investor‑protection advocates see significant downside risk if event‑based contracts become just another feature inside popular trading apps.
The Toronto Star quotes Werner Antweiler, professor at the UBC Sauder School of Business, warning that “pushing this onto the retail market is asking for trouble,” and comparing prediction trading to gambling.
Based on his not‑for‑profit prediction market experiment, he told the Star that unsophisticated investors are drawn to high‑risk positions and more prone to losing money, and that these markets tend to attract younger, male investors.
Jean‑Paul Bureaud, executive director of FAIR Canada, told the Star he is concerned that if forecast contracts become a common feature on an investing platform, retail participation could grow faster than effective safeguards, raising the risk of significant losses.
In his view, “for most retail investors, prediction markets look and behave much more like online gambling — fast, speculative, and event‑driven,” and “calling them ‘markets’ doesn’t change the risk or make them appropriate for everyday investors.”
Meanwhile, the broader sector is already under scrutiny for insider‑trading‑style concerns.
Financial Post reports that one user won US$400,000 just hours after correctly betting on when the US would capture former Venezuelan president Nicolas Maduro.
CBC describes a separate Venezuela‑linked trade in which an anonymous gambler put more than US$30,000 on Maduro being ousted by the end of January shortly before a US military operation removed him, a bet that paid out more than US$400,000.
