Securities statistics, third quarter 2020
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Retirements of debt securities issued by Canadian corporations and governments exceeded new issuances by $6.1 billion in the third quarter. Overall borrowing activity slowed considerably in the quarter, following unprecedented levels of net issuances totalling $507.5 billion in the second quarter.
The total outstanding value of Canadian debt securities was $5,010.3 billion at the end of the third quarter, down $14.4 billion from the previous quarter. The net retirement activity over the quarter, as well as the downward revaluation of US dollar-denominated instruments due to the appreciation of the Canadian dollar, contributed to the decline. This was the first reduction in the total outstanding value of Canadian debt securities since the fourth quarter of 2019.
Federal government borrowing activities slow
The federal government issued a net $3.2 billion of debt securities in the third quarter, following net issuances totalling $331.4 billion in the first half of the year. The borrowing activity of the quarter consisted of record net issuances of $75.2 billion of bonds, moderated by net retirements of $71.9 billion of money market instruments.
By the end of the third quarter, the total outstanding amount of federal government debt securities reached $1,079.6 billion and 38.4% of this amount was to be repaid within one year. This share was 45.2% at the end of the second quarter.
Net retirements of debt securities by financial corporations
The value of debt securities of financial corporations decreased by $62.5 billion to $2,192.3 billion. The decline was mainly attributable to net retirements of $39.3 billion in the quarter. The downward revaluations of the instruments denominated in US dollars also contributed to the decline. The Canadian dollar appreciated by 1.6 US cents against the US dollar in the quarter.
With net issuances amounting to $9.9 billion, non-financial corporations were net borrowers of funds in the third quarter. Net issuances of foreign currency-denominated instruments were $8.8 billion, the highest amount since the first quarter of 2015. The activity in the third quarter was mainly for the purpose of debt repayments and refinancing. The total outstanding value of non-financial corporations' debt securities was $725.4 billion at the end of the third quarter. Non-financial corporations are significantly exposed to foreign currency fluctuations, as 44.0% of their total debt securities outstanding were denominated in foreign currencies at the end of the third quarter.
Largest net issuances of equity securities since the first quarter of 2017
Net issuances of equity securities by Canadian corporations totalled $17.8 billion in the third quarter, the largest since the first quarter of 2017. Non-financial corporations led the activity with net issuances of $18.6 billion. Funds were mainly used for general corporate purposes and to finance merger and acquisition activities. On an industry basis, the utility industry and, to a lesser extent, the mining, quarrying, and oil and gas extraction industry, posted the largest net issues.
The total outstanding market value of listed Canadian equity securities increased by $158.5 billion to reach $2,978.0 billion at the end of the third quarter. The S&P/TSX index rose by 3.9% in the third quarter.
Note to readers
Following a recent program review, Statistics Canada and the Bank of Canada have agreed to move to a single set of securities statistics to be produced by Statistics Canada and this release marks the end of the transition period. This joint initiative is part of a broader cooperation between the two organizations to consolidate credit statistics and to fulfill the G20 Data Gaps Initiative. This will provide users with improved coherence, accuracy and interpretability of securities data.
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.
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.
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.
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.
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.firstname.lastname@example.org), International Accounts and Trade Division.
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