BY: PAUL YOUNG CPA, CGADATE: MARCH 18, 2017

Government Debt – Canada – Analysis – March 2017

• SME – Financial Performance Management (TM1, Cognos Controller and Cognos Disclosure Management, OpenPages, Algorithmics, Cognos Integrated Server, Cognos Command Center and Datawatch)

• Industry Experience• 15+ years in Corporate Reporting, Budget & Forecasting, Costing, Business

Process Management, Internal Audit and Controls, Risk Management, Financial Analysis, Costing

• 11+ years in financial solutions (FOPM, FPM, Risk, Office of the Finance, Risk Management)

• 8+ years teaching Advance Finance, Advance Accounting, Public Finance and Advance Management Information Systems

• Blogger in areas like Finance Analysis, Government policies, market segment

Paul Young - Bio

What are bond agencies?

Canada Federal and Provincial Bond Rating

Manitoba/Credit Rating

Alberta/Credit Rating

Ontario/Credit Rating

Government Net Debt

Government Interest Cost

Agenda

- Source - http://www.investinginbonds.com/learnmore.asp?catid=9&subcatid=94

What are bond agencies

• Agency bonds are issued by two types of entities—1) Government Sponsored Enterprises (GSEs), usually federally-chartered but privately-owned corporations; and 2) Federal Government agencies which may issue or guarantee these bonds—to finance activities related to public purposes, such as increasing home ownership or providing agricultural assistance. Agency bonds are issued in a variety of structures, coupon rates and maturities.

Rate government debt Downgrades can forced up interest costs due to higher return required on bonds Debt ceiling can be established Many finance minister have said they do not sleep at night due threat of bond downgrade

Bond Agencies

http://www.financialpost.com/markets/data/bonds-canadian.html#provincial

Bond/Value

http://www.cbc.ca/news/canada/manitoba/manitoba-moodys-credit-agency-rating-1.4018001

MB / Credit Rating

http://business.financialpost.com/news/economy/moodys-dbrs-cast-worried-eye-on-albertas-debt-and-recovery-hopes-based-on-oil

Alberta / Credit Rating

http://www.cbc.ca/news/canada/toronto/moodys-ontario-credit-rating-stable-1.3554371

Ontario / Credit Rating

RBC – March 16, 2017

Government – Net Debt

Government Interest cost

https://www.fraserinstitute.org/sites/default/files/cost-of-government-debt-in-canada-2016.pdf

Comment:• Alberta interest is not $800M/year• Provinces like Ontario/PQ interest

cost is 3rd largest expense• Government debt has paid back

• Running Surpluses• Spending cuts• Selling off assets

Global TV – June 28, 2016

CBC – April 22, 2012