Document Type
Case Study
Case Series
Market Support Programs
JEL Codes
G01, G28
Abstract
In Canada, the shock of the COVID-19 crisis drove up bid-ask spreads on Government of Canada (GoC) bonds. The Bank of Canada (BoC) announced the Government Bond Purchase Program (GBPP) to support the functioning of its government bond market, support other market liquidity tools, and replace the BoC's long-standing fiscal agent activities. The GBPP conducted multi-rate reverse auctions with primary dealers to purchase GoC bonds in the secondary market. The GBPP purchased bonds across the yield curve but concentrated on two- and five-year tenors. In June 2020, with CAD 64.7 billion (USD 48 billion) outstanding, the BoC announced that the program's purpose had shifted to quantitative easing (QE). The GBPP continued well after the GoC market calmed and, in October 2021, the BoC ended QE, leaving the program to conduct regular liquidity management.
Recommended Citation
Runkel, Corey N.
(2022)
"Canada: Government Bond Purchase Program,"
Journal of Financial Crises: Vol. 4
:
Iss. 2, 1504-1518.
Available at:
https://elischolar.library.yale.edu/journal-of-financial-crises/vol4/iss2/69
Date Revised
2022-07-15
Included in
Economic Policy Commons, Finance and Financial Management Commons, Macroeconomics Commons, Policy Design, Analysis, and Evaluation Commons, Policy History, Theory, and Methods Commons, Public Administration Commons