Document Type

Case Study

Case Series

Market Support Programs

JEL Codes

G01, G28


Given the negative financial and economic shocks of the COVID-19 pandemic, the Bank of Canada (BoC) adopted several policies, including a suite of monetary policies, to maintain a healthy level of market liquidity. Among these measures, the BoC established the Canada Mortgage Bond Purchase Program (CMBP) on March 16, 2020. Through the CMBP, the BoC purchased Canada Mortgage Bonds (CMBs) from primary dealers on the secondary market, holding the CMBs on its balance sheet. The bank created the CMBP, which operated twice weekly and targeted purchases of up to CAD 500 million (USD 373 million) per week, to "support the functioning of the CMB market and the ability of financial institutions to finance mortgage lending to Canadian homeowners." While the BoC credited the CMBP for maintaining Canadian market liquidity, use of the CMBP declined as the Canadian economy improved. Because of its disuse, on October 15, 2020, the BoC announced the CMBP would cease its operations on October 26, 2020. The CMBP ceased operations as scheduled. In about six months of operation, purchases through the CMBP totaled more than CAD 8 billion.

Date Revised