Securities statistics, fourth quarter 2020
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Released: 2021-03-09
Net issuances of debt securities by Canadian governments and corporations totalled $23.0 billion in the fourth quarter. Canadian entities—led by the federal government—issued a net $83.6 billion of bonds. Net retirements of $60.6 billion in the form of money market instruments moderated the overall activity.
At the end of the fourth quarter, the total outstanding value of Canadian debt securities was $4,981.7 billion—down $24.5 million from the end of the third quarter. This decline was mainly attributable to the downward revaluation of US dollar-denominated instruments. The total outstanding amount of securities denominated in US dollars accounted for 16.6% of all debt securities at the end of the fourth quarter. The Canadian dollar continued to appreciate against the US dollar over the quarter to reach its highest level since January 2018.
The fourth quarter closed a year of strong financing activities resulting primarily from the Government of Canada's economic response plan to support enterprises and households affected by the COVID-19 pandemic.
Chart 1
Canadian debt securities issues by sector, net issuances
Record net issuances of federal government bonds
Net issuances of federal government bonds reached $96.1 billion in the fourth quarter—a record. About one-half of these bonds had an original term to maturity of between two and five years. This borrowing activity was moderated by net retirements of $57.5 billion of money market instruments. As a result, the federal government issued $38.6 billion of debt securities in the quarter.
Total retirements of debt securities issued by Canadian corporations exceeded new issuances by $28.1 billion in the fourth quarter. Net retirements were recorded for both financial and—to a lesser extent—non-financial corporations.
Chart 2
Debt securities issues by the federal government, net issuances
The market value of outstanding Canadian equities reaches an all-time high
Net issuances of equity securities by Canadian corporations totalled $5.0 billion in the fourth quarter. Non-financial corporations—led by professional, scientific and technical services firms—contributed the most to the net issuance activity over the quarter. The funds were raised mainly for merger and acquisition activities.
Chart 3
Canadian equity securities issues by sector, net issuances
The market value of total outstanding Canadian equity securities reached an unprecedented $3,282.8 billion at the end of the fourth quarter, up $302.7 billion from the third quarter. Canadian equity prices—as measured by the S&P/TSX composite index—rose 8.1% in the fourth quarter.
Chart 4
Canadian equity securities issues by sector, stocks at market value
Unprecedented federal government borrowing activities in 2020
On an annual basis, Canadian entities issued a net $618.8 billion of debt securities in 2020, up from $138.7 billion in 2019. The federal government contributed the most to this increase, with net issuances of $368.9 billion over the year, compared with an average of $15.5 billion over the previous five years. The overall borrowing needs from the federal government increased substantially in 2020 to support Canadian enterprises and households affected by the COVID-19 pandemic.
In the first half of 2020, federal government funding activities were mainly in the form of short-term debt securities, with net issuances of $259.9 billion. The trend was reversed in the second half of the year, when the federal government repaid $133.8 billion of short-term debt securities and issued $171.2 billion of long-term debt securities.
At the end of 2020, the total outstanding value of federal government debt securities reached an unprecedented $1,111.4 billion—a 49.7% increase from the end of 2019. About one-third of all outstanding debt securities will have to be repaid by the end of 2021. In 2020, Canadian short-term interest rates fell 159 basis points to reach the lowest levels on record, and long-term rates fell 91 basis points.
A rapid recovery in the market value of Canadian equity securities in 2020
In 2020, the Canadian equity market experienced significant turbulence in reaction to the shock of the COVID-19 pandemic. The total outstanding market value of Canadian listed equities fell $662.8 billion (-21.4%) in the first quarter and rebounded strongly in subsequent quarters to finish the year at a record high of $3,282.8 billion, up $190.8 million from the end of 2019. This increase was driven in large part by higher equity prices.
On an industry basis, non-financial corporations accounted for 82.9% of the annual growth in 2020, with the information and cultural industries, as well as the wholesale trade industry, posting the largest increases. Meanwhile, the manufacturing industry posted the largest decline.
In addition to price appreciation, new issuances of Canadian equity securities also contributed to the overall increase in market value. Net issuances over the year totalled $23.5 billion—the largest amount since 2017. On an industry basis, the mining, quarrying, and oil and gas extraction industry posted the largest net issues.
Note to readers
In September 2015, the G20 Finance Ministers and Central Bank Governors launched the second phase of the G20 Data Gaps Initiative (DGI-2). The goal of the initiative is to ensure the financial sector, governments, businesses and citizens have the necessary information to monitor and react to the build-up of financial risk in the domestic and global economies.
The DGI-2 consists of 20 recommendations encouraging countries to compile and disseminate new or increasingly detailed statistical products. The goal of the initiative is to have each member of the G20 disseminate these recommended datasets on a regular and timely basis by 2021.
This quarterly release, available about 70 days after the reference period, addresses recommendation 7 of the DGI-2 on securities statistics. It includes information on debt securities issues by sector, currency, maturity, type of interest rate and market of issuance. It also includes information on equity securities by sector and industry. With this release, new series on issuances of securities by type of use of proceeds are available. In addition, new information on foreign debt securities by currency is available. Definitions and concepts used are consistent with the recommendations of the Handbook on Securities Statistics, an internationally agreed framework for classifying securities instruments.
Data are accessible through an easy-to-use and flexible visualization tool. The tool includes dynamic cross-tables that allow users to look at the dataset from a variety of dimensions, as well as other visualization layers that illustrate different characteristics of the data in the form of interactive tables and charts.
Definitions
Securities statistics cover issuances and holdings of financial negotiable instruments. Securities include debt instruments designed to be traded in financial markets, such as treasury bills, commercial paper and bonds, as well as equity instruments, such as listed shares.
The book value of a debt instrument reflects the value of the debt at creation, and any subsequent economic flows, such as transactions (e.g., repayment of principal), valuation changes (independent of changes in its market price) and other changes. The book value is composed of the outstanding principal amount plus any accrued interest. The market value reflects the value at which securities are acquired or disposed of in transactions between willing parties, excluding commissions, fees and taxes.
Currency valuation
The value of securities denominated in foreign currency is converted to Canadian dollars at the end of each period. When the Canadian dollar is appreciating in value, the restatement of the value of these instruments in Canadian dollars lowers the recorded value. The opposite is true when the Canadian dollar is depreciating.
Products
The data visualization product "Securities statistics," part of the series Statistics Canada – Data Visualization Products (71-607-X), is available online.
The document "Enhancing Canada's statistics on securities," part of Latest Developments in the Canadian Economic Accounts (13-605-X), is also available.
The Economic accounts statistics portal, accessible from the Subjects module of our website, features an up-to-date portrait of national and provincial economies and their structure.
Contact information
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).
To enquire about the concepts, methods or data quality of this release, contact Vivian Niu (647-961-8794; Chenvivian.niu@canada.ca), International Accounts and Trade Division.
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