Canadian governments and corporations borrowed a net $81.9 billion in debt securities in Q3 2025
Canadian governments and financial institutions loaded up on debt in Q3 2025, while rising equity markets and a weaker Canadian dollar boosted portfolio values in Canada and abroad.
Debt markets: governments and financials keep borrowing elevated
Canadian governments and corporations borrowed a net $81.9bn in debt securities in the third quarter, the highest since Q3 2024.
The government sector led this financing, followed by financial corporations.
Net government debt issuance totalled $39.3bn, marking the 10th straight quarter that issuances exceeded retirements.
The federal government raised a net $22.6bn, mainly in bonds, while provincial and territorial governments issued a net $16.6bn.
Since Q2 2023, governments have raised a net $434.4bn in debt instruments, most of it at the federal level.
By issuer sector, governments held the largest stock of Canadian debt securities at the end of September, at $2,822.2bn, followed by financial corporations at $2,579.5bn and non-financial corporations at $919.4bn.
Financial corporations were also net borrowers, raising $28.7bn on credit markets in Q3 2025.
Issuances by insurance corporations and pension funds reached $12.5bn, the highest since Q1 2024.
Non-financial corporations issued $14.0bn in debt, led by utilities.
More than 40 percent of all net debt issuances in the quarter were placed on international markets, driven mainly by financial corporations.
This borrowing helped finance Canada’s current account deficit through the balance of international payments.
Equities: buybacks reduce float as markets rally
Net retirements of Canadian equity securities reached $20.3bn in Q3 2025, mainly due to share buybacks.
Financial corporations retired $12.5bn in equity, while non-financial corporations retired $7.9bn.
Despite the net retirements, the total market value of Canadian equity securities rose by $607.7bn to $5,933.5bn at quarter-end, after a $391.9bn gain in Q2.
Most of the Q3 growth came from non-financial corporations, particularly in mining, quarrying, and oil and gas extraction.
Canadian share prices, as measured by the S&P/TSX composite index, increased 11.8 percent in the third quarter and 7.8 percent in the second quarter.
Foreign securities: US exposure and FX drive gains
Canadian holdings of foreign securities climbed to $4,618.5bn in market value at the end of Q3, up $391.1bn from the previous quarter.
Strong foreign equity markets, especially US stocks, and the depreciation of the Canadian dollar against the US dollar drove most of the increase, alongside strong net purchases of foreign securities by Canadian investors.
US share prices, measured by the S&P 500 composite index, rose 7.8 percent in the quarter.
Foreign shareholdings stood at $3,503.3bn at the end of September, while foreign debt securities totalled $1,115.2bn.
US instruments made up 71.2 percent of all foreign securities held by Canadian investors, most of them US shares.
US shares accounted for more than three-quarters of all US securities in Canadian portfolios.
European securities represented 13.8 percent of total foreign holdings, mainly from the United Kingdom, Germany and France.
