Net borrowing falls in Q4 as equity retirements surge despite strong stock market gains
Canadian governments and corporations raised significantly less funding through debt securities in the fourth quarter, with total net borrowing falling to $55.9 billion from $88.5 billion in the previous quarter.
The bulk of financing activity came from long-term instruments and was led by government issuers, according to newly released data from Statistics Canada.
Even with new borrowing, the overall stock of outstanding debt securities rose by $24.1 billion to reach $6,353.3 billion in book value terms. However, gains were partly offset by downward revaluations tied to the Canadian dollar’s appreciation against foreign currencies.
Canadian governments accounted for most of the quarterly borrowing, issuing a net $53.2 billion in debt securities. Provincial and territorial governments were responsible for $33.5 billion of this total — their highest quarterly level since the second quarter of 2024.
Federal government borrowing declined to $18.5 billion in the quarter, marking the lowest quarterly amount in 2025. While Ottawa recorded strong net bond issuances of $50.7 billion, this was tempered by the largest net retirement of money market instruments in five years, totalling $32.2 billion.
Canadian non-financial corporations raised $13.7 billion through debt securities in the fourth quarter. Mining companies were the most active borrowers, largely issuing Canadian-dollar instruments. Funds were mainly used to refinance existing obligations, support capital spending and finance acquisitions.
In contrast, financial corporations reduced their debt securities by a net $10.9 billion. Chartered banks accounted for most of the repayments, driven largely by retirements of covered bonds backed by residential mortgages.
On the equity side, net retirements of Canadian shares reached $25.9 billion in the fourth quarter, primarily reflecting merger and acquisition activity. Non-financial corporations retired $16.4 billion in equity securities, while financial corporations accounted for $9.5 billion.
Despite the decline in outstanding shares, the market value of listed Canadian equities climbed by $335.6 billion to $6,269.7 billion, buoyed by rising stock prices. The Standard & Poor’s/Toronto Stock Exchange composite index increased 5.6% over the quarter.
Over the full year, Canadian entities issued a net $242.5 billion in debt securities, down from $281.7 billion in 2024. Federal borrowing totalled $118.9 billion — the highest level in five years — as funds were directed toward refinancing maturing debt and supporting infrastructure and project spending.
Provincial and territorial governments raised $79.8 billion in 2025, slightly below the previous year’s total. Nearly half of the funds were sourced from foreign markets, a sharp increase from 20% in 2024.
Non-financial corporations issued $64.4 billion in debt securities over the year, with a larger share of funding raised domestically to support refinancing, investment and acquisitions. Financial corporations, meanwhile, repaid a net $23.4 billion, led by activity among chartered banks.
In contrast to the fourth-quarter trend, new equity issuances exceeded retirements by $30.4 billion in 2025 overall. The market value of outstanding Canadian equities surged by $1,503.7 billion during the year.
Canadian share prices, as measured by the S&P/Toronto Stock Exchange composite index, rose 28.2% in 2025, highlighting strong investor demand and improving market conditions.
