increase / Eoneren

In the first quarter, borrowing by Canadian companies and governments via debt securities hit its highest level since the onset of the pandemic, according to new data from Statistics Canada.

The national statistical agency reported that net borrowing by corporations and governments in debt securities (including bonds, Treasury Bills and commercial paper) totalled $106.3 billion in the first three months of 2024. That’s the highest level since the second quarter of 2020, when borrowing spiked sharply to over $500 billion in the face of the onset of the pandemic, disrupting financial markets.

StatsCan said first-quarter financing activity was about evenly split between governments and corporations, as governments borrowed $54.9 billion (led by $41.7 billion from the federal government), net issuance by financials reached $28.5 billion, and non-financial corporations borrowed $22.9 billion.

The borrowing by non-financials was led by utilities, along with companies in the information and cultural industries, StatsCan said.

The total value of outstanding Canadian debt securities rose by $142.8 billion in the quarter to $5.9 trillion, the agency also reported.

Alongside the robust new issuance activity, the depreciation of the Canadian dollar against major foreign currencies during the quarter contributed to the increase, StatsCan said.

The market value of outstanding Canadian equity securities reached $4.25 trillion at the end of the first quarter, up $257.4 billion from the previous quarter, StatsCan reported, as the S&P/TSX composite index gained 5.8% in the quarter.