Follow up on proposed modifications to Government of Canada Bond operations

On July 21, 2000, the Bank of Canada announced that the Bank and the Department of Finance would be seeking the views of market participants on the feasibility of implementing a cash management buyback program and on the possibility of reverting back to March and September maturity dates for two-year bonds.

Cash management buybacks

Market consultations were generally favourable with regards to the feasibility of implementing a cash management buyback program that would target large outstanding bonds with less than 12 months to maturity. The Bank of Canada and the Department of Finance are continuing to review issues related to the operations of such a program.

Two-year bond maturities

Consultations indicated that the balance of opinion among market participants was in favour of maintaining two-year bond issuance on the June and December maturity pattern as a means to enhance the liquidity of the Government of Canada securities markets. On this basis, no change will be made to the dating of two-year bonds.

The Government is committed to continued consultations with market participants regarding potential future adjustments to its domestic debt programs which may be required to address issues such as market liquidity and government cash management.

For further information, contact:

Nancy Harvey
Bank of Canada
613 782-7867

Michael Keenan
Department of Finance
613 992-4013