The Evolution of the Government of Canada's Debt Distribution Framework

In 1998, the Government of Canada adopted a new framework for distributing its debt securities to financial market intermediaries and end investors. Minor modifications to the current framework were implemented in Dec 2005 in response to lower government borrowing needs, the high concentration of large users in both the primary and secondary markets for Government of Canada securities, and innovations such as the growth of electronic trading. The key changes made to the debt distribution framework were an increase in the size of bids that dealers can accept on behalf of customers at auctions of Government of Canada securities and reduced minimum bidding requirements for primary dealers. These changes are expected to attract continued broad and competitive participation in government auctions. In turn, this should support the government's objectives for its debt strategy: to raise stable, low-cost funding and to maintain a well-functioning market.