Latest / How Canadian Markets Work
Episode 35: Government of Canada Debt
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Episode Summary Every interest rate in Canada—from GICs to mortgages—is priced relative to Government of Canada (GoC) bonds. Though termed the "risk-free rate," this shorthand only means free of nominal default risk. This episode explains how Ottawa borrows, why "safe" bonds can lose you money, and how these benchmarks dictate consumer borrowing costs.
Key Concepts
Ottawa's Debt Instruments: The government issues Treasury bills (short-term debt under a year, paying no coupon and sold at a…
The skinny
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