Provincial Bond Purchase Program

Learn about the program, access its results and reporting, and find key contacts and related notices.

Program details

The Provincial Bond Purchase Program (PBPP) aims to support the liquidity and efficiency of provincial government funding markets, by purchasing bonds through a tender process in the secondary market. It supplements the Provincial Money Market Purchase Program (PMMP). The asset manager for this program is BMO Global Asset Management. The amount of debt purchased for any given eligible issuer will factor in the share of the issuer’s debt outstanding as well as the issuer’s share of Canada’s GDP.

Terms and conditions

See the full terms and conditions for this program.

Primary dealers for Government of Canada marketable bonds as listed on the Bank of Canada website are eligible to participate in the PBPP. Eligible dealers should contact to register.

Operational details

Purchases will be executed through a tender offer process. Authorized dealers will be provided advance notice before a tender date as to the eligible assets for tender. Dealers will communicate offers to sell notional amounts of eligible assets at a specified price to BMO GAM, at times determined by BMO GAM.

  • There is no minimum rating requirement.
  • The Bank will not purchase more than 20% of an issuer’s eligible assets outstanding.
  • The Bank’s purchases will aim to reflect a reference portfolio based in equal weight on each province or territory’s share of eligible bonds outstanding and their share of Canadian GDP. Each issuer’s eligible share will be recalculated on a monthly basis. Actual purchases will depend on what is offered through the tender offer process and may differ from the reference portfolio.
  • The program will hold up to a total of $50 billion par value of eligible assets.
  • The program and its operations may be amended at any time if conditions warrant.

Duration

The program will begin on May 7, 2020 and operate for 12 months from May 7, 2020 to May 6, 2021.

Eligible assets

CAD-denominated bonds maturing on or before April 15, 2031 issued by or guaranteed by a provincial or territorial government that meet the criterion of sufficiently high quality as determined by the Bank.

A list containing eligibility information and decisions to impose additional risk mitigants for provinces whose securities are either directly issued or guaranteed is available on the Bank’s website. The program will purchase the eligible assets in the secondary market.

Non-guaranteed agency bonds, municipal bonds, real return bonds, floating rate notes, strip/residuals, T-Bills, and promissory notes issued by provinces or territories are ineligible for purchase in the program.

Eligible issuers

Eligible issuers are all Canadian provinces and territories and provincial and territorial guaranteed agencies.

Pricing

As purchases will be executed through a tender offer process, pricing will depend on market conditions. The Bank reserves the right to adjust its pricing and portfolio requirements and objectives to meet policy objectives.

Upcoming operations

Details for the next operation—including the purchase amount and eligible maturity range—will be provided in this table. The target amount to be purchased will be updated on the morning of the auction.

Reverse auction date Settlement date Eligible maturity range (years) Number of securities eligible Maximum par amount to be purchased ($M)
2020-08-04 2020-08-06 0-11 28 750
2020-08-06 2020-08-10 - - -

Results

The results of the operation will be updated after 16:00 (ET) on each day the program is active.

Reverse auction date Settlement date Eligible maturity range (years) Number of securities purchased Number of securities eligible Par amount purchased ($M) Maximum par amount to be purchased ($M)
2020-07-30 2020-08-04 0-11 5 12 175.8 407
2020-07-28 2020-07-30 0-11 15 26 342.9 750
2020-07-23 2020-07-27 0-11 11 13 341 367.6
2020-07-21 2020-07-23 0-11 7 15 132.4 500
2020-07-16 2020-07-20 0-11 4 8 142.5 232.5
2020-07-14 2020-07-16 0-11 13 18 267.5 500
2020-07-09 2020-07-13 0-11 16 21 277 458
2020-07-07 2020-07-09 0-11 2 17 42 500
2020-06-29 2020-07-02 0-11 3 17 47.2 500
2020-06-25 2020-06-29 0-11 6 9 65.3 260
2020-06-23 2020-06-25 0-11 14 19 239.6 500
2020-06-18 2020-06-22 0-11 5 9 146.7 314.5
2020-06-16 2020-06-18 0-11 7 12 185.5 500
2020-06-12 2020-06-16 0-11 15 16 327.1 407
2020-06-09 2020-06-11 5-11 10 12 160 340
2020-06-08 2020-06-10 0-5 8 12 182.9 410
2020-06-05 2020-06-09 0-11 12 18 257.6 550
2020-06-02 2020-06-04 7-11 11 13 291.6 565
2020-06-01 2020-06-03 0-3 10 17 359 635
2020-05-28* 2020-05-29 0-11 6 - 100 -
2020-05-27 2020-05-29 5-11 13 15 276.5 716.5
2020-05-26 2020-05-28 0-5 12 13 385.5 496
2020-05-22 2020-05-26 5-7 8 9 123.5 172.5
2020-05-21 2020-05-25 3-5 10 11 194.6 274.5
2020-05-20 2020-05-22 0-3 14 16 289.8 425.5
2020-05-19 2020-05-21 7-11 10 12 201 327.5
2020-05-13 2020-05-15 7-11 20 20 281 300
2020-05-12 2020-05-14 5-7 17 18 236 247.5
2020-05-08 2020-05-12 3-5 9 14 89.5 205
2020-05-07 2020-05-11 0-3 8 15 120 225
  1. *. Transactions conducted by request for quote.[]

Reporting

The bonds purchased through this program will aim to reflect a reference portfolio which provides equal weight to each province or territory’s share of eligible bonds outstanding and their share of Canadian GDP, while maintaining a cap of 20% of an issuer’s eligible bonds outstanding, and total portfolio purchases of no more than $50 billion.

Province/Territory Share of reference portfolio (% as of 2020-07-31) Share of actual total holdings (% as of 2020-06-30) Par value of actual total holdings ($M as of 2020-06-30)
Alberta 12.73 13.16 600.0
British Columbia 10.53 10.70 487.7
Manitoba 4.37 4.73 215.8
New Brunswick 1.90 1.41 64.5
Newfoundland and Labrador 1.78 2.13 97.2
Nova Scotia 1.75 2.81 128.3
Ontario 41.49 41.11 1,874.6
Prince Edward Island 0.19 0.11 5.0
Quebec 22.38 21.42 976.6
Saskatchewan 2.95 2.41 110.1
Northwest Territories 0.02 0.00 0
Nunavut 0.01 0.00 0
Total1 100 100 4,559.8
  1. 1. Yukon does not have any bonds in the 0-10 year sector. []

The Bank will update this table, including each province and territory’s share of the reference portfolio, every month with a one-month lag. The aggregate market value of the holdings of provincial bonds acquired through the PBPP program will be updated every Friday on the Bank’s weekly balance sheet.

Key contacts


Managing Director
BMO Global Asset Management


Director
Financial Markets Department
Bank of Canada
613-782-7245

Related notices