Canada currently has the third-lowest 10-year government bond yield in the G7. Across the G7, more favourable changes in central-government debt-to-GDP ratios between 1995 and 2024 have generally been associated with larger declines in those governments’ 10-year bond yields since 1995; Canada ranks first for debt-ratio improvement and second for yield decline. Although inflation and country-specific factors also affect borrowing costs, the comparison highlights the importance of preserving Canada’s advantage through continued federal debt reduction and a renewed Bank of Canada inflation-targeting agreement. For more, read the recently published Intelligence Memo.
