Non-residents now own more of the domestic GoC market than Canadians
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Foreigners can’t seem to get enough of Canadian debt.
According to the latest international securities transactions data out yesterday, foreign investors’ “voracious appetite” for Canadian bonds continued in June.
National Bank of Canada strategists Taylor Schleich and Warren Lovely said while Ottawa is focusing on building up the domestic economy to make Canada less reliant on the rest of the world, a different dynamic is going on in the bond market.
“Canadian bond issuers are ‘outsourcing’ like never before,” they said.
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The $35 billion in net buying by non-residents in June was nearly triple the prior record of $13 billion in June 2024 and brings the year-to-date total to $185 billion, more than 50 per cent higher than the next biggest year in 2020.
Foreign investors are buying both government and corporate bonds, but mostly Government of Canada. So much so that non-residents have not only absorbed all of Ottawa’s net issuance, but also the run-off from the Bank of Canada’s balance sheet, said the strategists.