Government of Canada Securities
The federal government and those of Quebec and the
provinces and territories use financial instruments to borrow
money from the global financial oligarchy. Institutional
investors of the global financial oligarchy purchase the
available government securities. Retail or individual purchase of
government savings bonds was discontinued in 2017. Even prior to
eliminating savings retail bonds, they only represented less than
one per cent of the purchased securities.
Technical Guide (Government of Canada Securities)
Excerpts from here
Fixed-Coupon Marketable Bonds
Effective October 1995 Government of Canada marketable bonds
are issued in global certificate form only whereby a global
certificate for the full amount of the bonds is issued in fully
registered form in the name of CDS & Co., a nominee of the
Canadian Depository for Securities Limited (CDS), (a division of
a private cartel called TMX Group - Ed). The bonds must be
purchased, transferred or sold, directly or indirectly, through a
participant of the Debt Clearing Service, which is operated by
CDS, and only in integral multiples of $1,000 (face value) . All
Canadian-dollar marketable bonds are non-callable and pay a fixed
rate of interest semi-annually.
Note: CDS Clearing and Depository Services Inc. (CDS) is a
subsidiary of the Canadian Depository for Securities Limited, a
for-profit corporation owned by the TMX Group. CDS owns and
operates CDSX, implemented in 2003, which clears and settles
eligible exchange-traded and over-the-counter equity, debt and
money market transactions. CDS's depository service provides
facilities to deposit and withdraw depository-eligible
securities, manage related ledger positions, and use these
positions for various business functions.
TMX Group claims assets of over $10 trillion. Found at
https://www.tmx.com/tmx-group/tmx-group-companies
Legal Terms and Conditions for Government of
Canada Domestic Nominal Bonds
Domestic Nominal Bonds
(the "Bonds") are securities issued by the Government of Canada
pursuant to Part IV of the Canadian Financial Administration
Act ....
Status
The Bonds constitute direct,
unsecured, and unconditional obligations of Her Majesty in right
of Canada ("Canada"). Payments of principal of and interest on
the Bonds are direct charges on, and payable out of the
Consolidated Revenue Fund of Canada. The Bonds rank pari passu in
all respects amongst themselves and with all other securities
issued by Canada and presently outstanding.
Interest
The Bonds shall accrue interest from the issuance date
("Issue") to the date immediately prior to the maturity date
("Maturity"), as specified in the Specific Terms, inclusively
....
Redemption
Canada will redeem the Bonds
at par on Maturity. The Bonds are not redeemable prior to
Maturity.
Registration
The Bonds are registered only in the name of CDS & Co., as
nominee of CDS Clearing and Depository Services Inc. ("CDS"), and
are held by CDS in its record entry securities clearing and
depository system. The Bonds are not represented by physical
certificates but only by book entries in the records maintained
by CDS. Interests in the Bonds held by participants in the CDS
system (each, a CDS Participant ) are represented through book
entries in accounts established and maintained by CDS for each
such CDS Participant, in accordance with the practices, rules,
and agreements of CDS. CDS Participants may in turn maintain on
behalf of other persons accounts in which such persons interests
in the Bonds may be recorded.
Title, Transfer
Canada may treat CDS &
Co. as the absolute owner of the Bonds for the purpose of
receiving payment and for all other purposes. No beneficial owner
of Bonds (each, a "Bondowner") will be shown on the records
maintained by CDS other than a Bondowner who is a CDS
Participant. The Bonds must be purchased, transferred, or sold
directly or indirectly by or through a CDS Participant and all
rights of Bondowners must be exercised through such CDS
Participant.
Treasury Bills
Effective November 1995 all new issues of Treasury bills are
issued in global certificate form only whereby a global
certificate for the full amount of the Treasury bill is issued in
fully registered form in the name of CDS & Co., a nominee of the
CDS. Treasury bills must be purchased, transferred or sold,
directly or indirectly, through a participant of the Debt
Clearing Service, which is operated by CDS, and only in integral
multiples of $1,000 (face value) ....
The Government of Canada also periodically issues cash
management bills (CMBs). CMBs are Treasury bills with maturities
of less than three months (they can be as short as one day) used
as a source of short-term financing for the Government. CMB
auctions can take place on any business day, typically for
next-day delivery, but on some occasions for same-day
delivery.
Treasury bills are priced at a discount. The return to the
investor is the difference between the purchase price and the par
value.
Government of Canada Real Return Bonds
Government of Canada real return bonds (RRBs) pay semi-annual
interest based upon a real interest rate. Unlike standard
fixed-coupon marketable bonds, interest payments on RRBs are
adjusted for changes in the consumer price index (CPI). The CPI,
for the purposes of RRBs, is the all-items CPI for Canada, not
seasonally adjusted, published monthly by Statistics Canada
....
At maturity bondholders will receive, in addition to a
coupon interest payment, a final payment equal to the sum of the
principal amount and the inflation compensation accrued from the
original issue date, i.e. final payment = principal + ((principal x
reference CPI on Maturity / reference CPI on Issue) - principal).
These bonds must be purchased, transferred or sold, directly
or indirectly, through a participant of the Debt Clearing Service
and only in integral multiples of $1,000 (face value).
Canada Bills
Canada Bills are
promissory notes denominated in US dollars and issued only in
book-entry form. They mature not more than 270 days from their
date of issue, and are discount obligations with a minimum order
size of US$1,000,000 and a minimum denomination of US$1,000.
Delivery and payment for Canada Bills occur in same-day funds
through JPMorgan Chase Bank New York.
Primary distribution of Canada Bills occurs through four
dealers: CIBC Wood Gundy Inc., Credit Suisse First Boston
Corporation, Goldman, Sachs & Co. and RBC Dominion Securities
Inc. Rates on Canada Bills are posted daily for terms of one to
six months. Canada Bills are issued for foreign exchange reserve
funding purposes only.
Canada Notes
Canada Notes are promissory notes usually denominated in US
dollars and available in book-entry form. They are issued in
denominations of US$1,000 and integral multiples thereof. At
present the aggregate principal amount outstanding issued under
the program is limited to US$10.0 billion. Notes can be issued
for terms of nine months or longer, and can be issued at a fixed
or a floating rate.
The interest rate or interest rate formula, issue price,
stated maturity, redemption or repayment provisions, and any
other terms are established by the Government of Canada at the
time of issuance of the notes and will be indicated in the
Pricing Supplement. Delivery and payment for Canada Notes occur
through the Citibank, N.A.
The Government may also sell notes to
other dealers or directly to investors. Canada Notes are issued
for foreign exchange reserve funding purposes only.
Cross-Currency Swaps
A cross-currency swap agreement is a contract in which
one party borrows one currency from another party and simultaneously
lends the same value, at current spot rates, of a second currency to
that party. Cross-currency swaps of domestic obligations are a
cost-effective
alternative to foreign-currency-denominated bond issues as a
means of meeting the Government's targets for longer-term foreign
currency funding.
This article was published in
Volume 50 Number 16 - May 9, 2020
Article Link:
Government of Canada Securities
Website: www.cpcml.ca
Email: editor@cpcml.ca
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