Issuance of debt securities soared in 2020: StatsCan

Canadian debt issuance exploded in 2020 as the governments and companies alike scrambled to raise funds in the wake of the Covid-19 pandemic, according to new data from Statistics Canada.

Last year, Canadian entities issued a net $618.8 billion worth of debt securities. By comparison, $138.7 billion was issued in 2019.

StatsCan reported that federal government led the way with $368.9 billion in net issuance during the year. That huge total largely reflected the impact of the pandemic, as the government financed the provision of extensive supports to both households in businesses.

Over the previous five years, federal net issuance averaged $15.5 billion, StatsCan noted.

At the end of 2020, total outstanding federal government debt securities reached an unprecedented $1.1 trillion, up 49.7% from the end of 2019.

The total value of Canadian debt finished the year at just under $5 trillion.

On the equity side, the total market value of Canadian equities finished the year at a record high of $3.3 trillion, as a 21.4% market plunge in the first quarter was fully recovered in subsequent quarters.

Alongside market gains, equity issuance totalled $23.5 billion in 2020, StatsCan said. This was the largest amount of new issue activity since 2017, led by the mining and energy sectors.

In the fourth quarter, net debt issuance totalled $23 billion, as record issuance of federal government bonds ($96.1 billion) was partly offset by the retirement of $57.5 billion in federal money market instruments.

Debt retirement by companies also outpaced new issuances by $28.1 billion in the fourth quarter. But companies still issued $5 billion in equity securities in Q4.

“The funds were raised mainly for merger and acquisition activities,” StatsCan said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.