As announced in the 2003 Budget, the Government will gradually reduce the fixed-rate portion of the debt from two-thirds to 60 per cent. The reduction will begin in the upcoming fiscal year and will be implemented in an orderly and transparent manner over the next five years to maintain a well-functioning Government of Canada securities market.

In 2003-04, the first stage of the move toward a lower fixed-rate debt structure will primarily involve modest changes in the marketable bond and Treasury bill stocks. The outlook for these programs in 2003-04 is as follows:

  • The size of the Treasury bill program will increase by about $15 billion from about $105 billion to a level in the range of $120 billion by the end of 2003-04.
  • The total amount of marketable bonds issued will be about $40 billion, similar to 2002-03. Net bond issuance (i.e. after bond buybacks) of about $30 billion will also be similar to 2002-03.
  • The total bond stock will decrease by about $10 billion from approximately $265 billion to $255 billion, taking into account bonds maturing during 2003-04 and an expected level of Cash Management Bond Buyback operations similar
    to 2002-03.

As in past years, the Government will consult with market participants on potential future adjustments to debt programs as the 2003-04 fiscal year progresses.

Further information on the Government's borrowing programs will be provided in the 2003-04 Debt Management Strategy document, to be released in March 2003.

For further information, please contact:

Rob Stewart
Senior Chief
Financial Markets Division
Department of Finance
613 992-4468
Donna Howard
Director
Financial Markets Department
Bank of Canada
613 782-8474