Ottawa bought $30B in mortgage bonds
The federal government has purchased about $30 billion of Canada Mortgage Bonds in 2026 as part of efforts to influence borrowing costs and suppress rates. That intervention is running alongside continued volatility in bond markets and shifting borrower behaviour. (x.com)
Ottawa is buying up to C$30 billion of Canada Mortgage Bonds in 2026, extending a market intervention that helps shape fixed mortgage rates. (bankofcanada.ca) The Bank of Canada says the federal government plans to buy fixed-rate bond issues in both five-year and 10-year terms over the 2026 calendar year. As of March 23, 2026, the government’s total Canada Mortgage Bond holdings stood at C$65.5 billion. (bankofcanada.ca) Canada Mortgage Bonds are securities backed by insured home loans: lenders pool eligible mortgages, investors buy the bonds, and the cash flows back into new mortgage lending. The Canada Mortgage and Housing Corporation says the program is designed to stabilize mortgage funding through the business cycle. (cmhc-schl.gc.ca) Budget 2025 raised the annual Canada Mortgage Bond issuance limit to C$80 billion starting in 2026, up from C$60 billion. The government kept its own purchase cap at up to C$30 billion a year, leaving the rest for private investors. (budget.canada.ca) (cmhc-schl.gc.ca) The policy began in the 2023 Fall Economic Statement and started operating in February 2024. By September 30, 2025, the Parliamentary Budget Officer said Ottawa had bought C$50.8 billion of these bonds, equal to 48.1 per cent of all issuance since the program began. (pbo-dpb.ca) The Parliamentary Budget Officer said the spread between Canada Mortgage Bonds and comparable federal bonds narrowed after the purchases began. That lowered the extra revenue Ottawa could earn by borrowing more cheaply than the yield it received on the mortgage bonds it bought. (pbo-dpb.ca) The same report said larger purchases could interfere with market functioning because investors use Canada Mortgage Bonds to hedge and manage risk. Under the scenarios it modeled, the office still projected annual net revenue of about C$353.4 million to C$509.7 million by 2030-31. (pbo-dpb.ca) Finance Canada’s 2025-26 debt strategy counted C$30 billion of borrowing to fund these purchases. That means the mortgage-bond program is not just a housing lever; it is now built into Ottawa’s annual funding plan. (canada.ca) For borrowers, the immediate signal is not a direct cut in mortgage rates but a steadier source of demand for the bonds that lenders use to fund fixed mortgages. Ottawa is still buying, but the market around those bonds is now larger, more crowded, and more central to how Canada finances housing. (bankofcanada.ca) (budget.canada.ca)
