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Glossary
Canada Premium Bond
The Canada Premium Bond is fully backed by the Government of Canada and offers at the time of issue a higher rate of interest than the Canada Savings Bond on sale at the same time. The Canada Premium Bond can be redeemed once a year on the anniversary of the issue date and during the 30 days thereafter without penalty.
Canada Savings Bond
With guaranteed returns and the option of redeeming at any time, the Canada Savings Bond provides maximum flexibility and security. The Canada Savings Bond is fully backed by the Government of Canada with rates of interest that will be increased when market conditions warrant. The Canada Savings Bond can be purchased at work through convenient payroll deduction.
RRSP and RRIF options
Both the Canada Premium Bond and Canada Savings Bond come with no-fees Registered Retirement Savings Plan (RRSP) and Registered Retirement Income Fund (RRIF) options. This means all the security of the bonds is combined with all the benefits of an RRSP or RRIF.
Marketable Bonds
Marketable Government of Canada Bonds are usually issued for terms of more than one year and have fixed semi-annual interest payments. The bonds are non-cashable prior to maturity but they can be bought and sold at market prices that vary from day to day. They can be purchased or sold prior to maturity at either a premium or a discount to the face value of the bond, depending on interest rates. You can find bonds in the marketplace with remaining terms to maturities ranging from one month to 30 years.
Treasury Bills
Treasury Bills are marketable securities that are issued periodically with terms of three, six or twelve months. Treasury Bills are usually purchased or sold prior to maturity at current market prices.
Real Return Bonds
This product features fixed semi-annual interest payments that are adjusted for changes in the Consumer Price Index (CPI) for Canada. These bonds are stable and protect against inflation over the long term. Real Return Bonds cannot be cashed prior to maturity, but they can be bought and sold at market prices.
Definitions of Debt Terms
Public debt is the outstanding financial obligations of the Government of Canada, including both market and non-market debt.
Market debt is the portion of debt that is funded in the public markets and includes marketable bonds, Treasury bills, non-marketable debt ( the Canada Premium Bond and Canada Savings Bond), foreign-currency denominated bonds and bills, and bonds issued to the Canada Pension Plan.
Non-market debt includes the government's internal debt, which is for the most part federal public sector pension liabilities and the government's current liabilities (such as accounts payable, accrued liabilities, interest and payment of matured debt).
Retail debt includes those Government of Canada securities held by individual Canadians. There are two principal categories: non-marketable securities, which include the Canada Premium Bond and the Canada Saving Bond, and marketable securities which include Real Return Bonds, marketable bonds and Treasury bills.
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