The Bank of Canada today announced a plan for a phased return to standard terms for auctions of Government of Canada nominal bonds and real return bonds by June 2021. This plan reflects both the improved market functioning in Government of Canada bond markets in recent months and the announced decline in bond issuance from historically high levels in coming quarters. The temporary measures announced on April 9, 2020 will be phased out as follows:
Effective January 11, 2021, Primary Dealers (PDs) competitive bidding limit will fall to 35 per cent (from 40 per cent). The aggregate bidding limit—which includes bids submitted on behalf of customers— will decline to 47.5 per cent (from 50 per cent).
Effective April 1, 2021, PDs competitive bidding limit will fall to 30 per cent. The aggregate bidding limit will decline to 45 per cent.
Effective June 1, 2021, PDs competitive bidding limit will fall to 25 per cent. The aggregate bidding limit will decline to 40 per cent.
Effective January 11, 2021, the maximum price range within which PDs must meet their minimum level of bidding obligations returns to 10 basis points (from 20 basis points) compared to the highest yield accepted.
The planned return to standard bidding limits for bond auctions remains subject to orderly market conditions.
For further information, please contact:
Funds Management and Banking Department
Bank of Canada
Funds Management Division
Department of Finance Canada
Bank of Canada