Canada Savings Bonds (CSBs) are following the penny into extinction as the federal government announced that it is terminating the longstanding program in this year's federal budget.
The CSB program has provided the federal government with a source of funds while offering Canadians a safe and easily accessible investment option since its inception in 1946, according to the budget documents. But the program has experienced a prolonged decline since reaching its peak in the late-1980s.
CSBs currently represent about $5 billion, or less than 1%, of total federal market debt and are no longer a cost-effective source of funds for Ottawa. This compares with more than $50 billion during the program's height in 1988-89.
"This decline in the program's popularity can be attributed to the proliferation of higher-yielding alternative retail investment instruments, such as Government of Canada-insured retail products (including guaranteed investment certificates), mutual funds and low-commission trading accounts," the budget documents states.
Ottawa will phase out the CSB program this year, which will result in cost savings from reduced management and administration costs. This will also allow the federal government to focus on less costly funding options. The government will continue to honour all outstanding retail debt.
Read: Budget 2017