Ottawa, March 21, 2005
2005-022

Archived - Minister of Finance Tables 2005-06 Debt Management Strategy

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Minister of Finance Ralph Goodale today tabled in the House of Commons and the Senate the Government of Canada's Debt Management Strategy for fiscal year 2005-06.

The document provides details on federal borrowing and investment policies for the coming fiscal year. The Government's strategy is aimed at ensuring stable, low-cost funding for its operations, while maintaining a well-functioning market for Government of Canada securities.

In keeping with the significant improvement in Canada's economic and fiscal circumstances in recent years, the Government will continue a gradual reduction in the fixed-rate share of the debt from two-thirds in 2002-03 to 60 per cent in 2007-08 to achieve savings on public debt charges while retaining a prudent debt structure. The move to a 60-per-cent debt structure is expected to save up to $500 million, on average, in annual debt-servicing costs once fully implemented.

One of the key challenges facing federal debt management is to maintain a well-functioning market for Government of Canada securities, particularly for bonds, given declining borrowing requirements and the move to the 60-per-cent fixed-rate target. In 2005-06, the Government will begin to reduce the bond buyback program as the transition to a lower level of fixed-rate borrowings is completed. The Government will also consult with market participants during 2005-06 on potential changes to the structure of a smaller bond program to help ensure that a well-functioning market for Government of Canada bonds is maintained in future years.

The publication may be viewed free of charge on the Department of Finance Web site.

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For further information:

David Gamble
Public Affairs and Operations Division
(613) 996-8080
Pat Breton
Press Secretary
Office of the Minister of Finance
(613) 996-7861
Nigel Stephens
Financial Markets Division
(613) 943-1944

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