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MNI BRIEF: Canada Debt Management Strategy Highlights

(MNI) OTTAWA
OTTAWA (MNI)
Bank of CanadaPolicy NewsCentral Bank NewsHomepageCanadaFiscalGovernment sectorBriefStoryRegionNorth AmericaBond Market News

Following are highlights of the Canadian finance department's debt management strategy released Tuesday alongside the federal budget.

  • "The aggregate principal amount of money to be borrowed by the government in 2024-25 is projected to be $508 billion, 83 per cent of which will be used to refinance maturing debt. This level of borrowing is consistent with the current legislated limit of $1,831 billion set out in the Borrowing Authority Act and the government has received approval from Governor in Council for a related annual borrowing limit for 2024-25."
  • "In 2024-25, borrowing needs are expected to remain elevated to fund maturing debt and financial requirements, including Canada Mortgage Bond purchases. Given the uncertain path of interest rates, the borrowing program for 2024-25 is focused on reducing refinancing risk and minimizing volatility to public debt charges through the period of expected rate adjustment over the next few years."
  • "In this context, the government plans to reduce issuance of treasury bills to 54 per cent of total domestic issuance compared to 57 per cent last year. The government is also increasing the issuance in the 10-year to $60 billion and 30-year to $16 billion. During the Fall Debt Management consultations, market participants clearly articulated a need for more long-term debt issuance. The government will continue to monitor the functioning of this sector and may opt to adjust issuance should market conditions necessitate a change."
  • "The Government of Canada will introduce, in May, a 1-month treasury bill as a new tenor for the domestic debt program to support the Canadian money market’s transition from Bankers' Acceptances where issuance will be discontinued following the cessation of the Canadian Dollar Offered Rate (CDOR) in June 2024. Refinitiv Benchmark Services (UK) Limited currently publishes CDOR and will cease this publication as of June 2024."
  • "Annual gross bond issuance is planned to be $228 billion in 2024-25. Issuance has been increased across the curve particularly in the long-end of the curve (10-year and 30-year). The share of issuance in the longer tenor sectors as a proportion of total bond issuance is expected to increase to 33 per cent from 30 per cent in 2023-24. Issuance has been increased in the 10- and 30-year sectors to respond to requests from market participants, as was highlighted in the recent Debt Management Strategy consultations. The government remains committed to supporting liquidity across all bond sectors and promoting a well-functioning market across the entire yield curve."
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Following are highlights of the Canadian finance department's debt management strategy released Tuesday alongside the federal budget.

  • "The aggregate principal amount of money to be borrowed by the government in 2024-25 is projected to be $508 billion, 83 per cent of which will be used to refinance maturing debt. This level of borrowing is consistent with the current legislated limit of $1,831 billion set out in the Borrowing Authority Act and the government has received approval from Governor in Council for a related annual borrowing limit for 2024-25."
  • "In 2024-25, borrowing needs are expected to remain elevated to fund maturing debt and financial requirements, including Canada Mortgage Bond purchases. Given the uncertain path of interest rates, the borrowing program for 2024-25 is focused on reducing refinancing risk and minimizing volatility to public debt charges through the period of expected rate adjustment over the next few years."
  • "In this context, the government plans to reduce issuance of treasury bills to 54 per cent of total domestic issuance compared to 57 per cent last year. The government is also increasing the issuance in the 10-year to $60 billion and 30-year to $16 billion. During the Fall Debt Management consultations, market participants clearly articulated a need for more long-term debt issuance. The government will continue to monitor the functioning of this sector and may opt to adjust issuance should market conditions necessitate a change."
  • "The Government of Canada will introduce, in May, a 1-month treasury bill as a new tenor for the domestic debt program to support the Canadian money market’s transition from Bankers' Acceptances where issuance will be discontinued following the cessation of the Canadian Dollar Offered Rate (CDOR) in June 2024. Refinitiv Benchmark Services (UK) Limited currently publishes CDOR and will cease this publication as of June 2024."
  • "Annual gross bond issuance is planned to be $228 billion in 2024-25. Issuance has been increased across the curve particularly in the long-end of the curve (10-year and 30-year). The share of issuance in the longer tenor sectors as a proportion of total bond issuance is expected to increase to 33 per cent from 30 per cent in 2023-24. Issuance has been increased in the 10- and 30-year sectors to respond to requests from market participants, as was highlighted in the recent Debt Management Strategy consultations. The government remains committed to supporting liquidity across all bond sectors and promoting a well-functioning market across the entire yield curve."