Bonds
Canada Should Revive Real Return Bonds, C.D. Howe Says
- Government cited weak demand when cancelling issuance in 2022
- Report authors say limited uptake not due to investor appetite
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Prime Minister Justin Trudeau’s government should consider reintroducing auctions of inflation-linked bonds in Canada, which were canceled nearly two years ago, according to a policy research group.
The country’s Department of Finance opted to end issuance of real return bonds in November 2022, citing weak demand and an illiquid market for the debt. In a paper released this week by the C.D. Howe Institute, Bill Robson and Alexandre Laurin argue that the limited uptake was not due to a lack of investor appetite, but that the government’s suboptimal offerings were a primary reason the bonds weren’t more popular.