The Canada Savings Bond (French: Obligations d’épargne du Canada) was an investment instrument offered by the Government of Canada from 1945 to 2017, sold between early October and December 1 of every year.[1] It was issued by the Bank of Canada and was intended to offer a competitive interest rate, and had a guaranteed minimum interest rate.
Canada started selling war bonds (marketed as "Victory Bonds") in 1917 to raise money during World War I for the Allies of World War I. Five bond campaigns were held from 1915 to 1919. To advertise the purchasing of Victory Bonds, the Victory Loan Dominion Publicity Committee created artwork, held parades, and had celebrity endorsements. Community members who bought many Victory Bonds were given a Victory Loan Honour Flag as a token of gratitude.[2] The program was revived for World War II.
Canada Savings Bonds were first offered in 1945 in order to replicate the success of Victory Bonds.[3]
In 2004, consultants gave the Department of Finance a report suggesting the CSB program be scrapped, giving an overall program cost savings of about $650 million in nine years. Then-finance minister Ralph Goodale rejected the recommendation as the program remained popular, especially with first-time investors, and opted to have the program changed to be more competitive and attract investors.[4]
The value of bonds issued declined from $55 billion (Canadian) in 1987 to just over $6 billion in 2015.[5]
A government-commissioned study by KPMG in June 2015 recommended cancelling the program. Despite this recommendation, the Department of Finance ruled out cancellation despite the program's estimated $58 million annual cost.[6]
As of October 2016,[7] the Liberal government considered ending the program. On March 22, 2017, the federal budget announced its decision to end the sale of new CSBs, saying they would be discontinued in 2017. No further bond purchases will be allowed, however existing bonds will still be honoured until they are redeemed.[8]
Types of bondsedit
Canada Savings Bonds were available in regular interest, which paid the interest directly to the bond holder, and compounding interest, which added to interest to the principal for the purpose of future interest calculations, only paying when the bond was redeemed. The interest rate was guaranteed for 1 year and could fluctuate with market conditions for the remaining 9 years until its maturity. These bonds were redeemable at any time.
Canada Premium Bonds were also a available in regular and compounding interest. These bonds, introduced in 1997, differ from the regular savings bonds in that they were sold with a higher interest rate fixed through the third year; the interest rate would fluctuate for the remaining 7 years with market conditions until its maturity. This greater interest rate stability was considered a premium feature. Conversely, they were only redeemable on the anniversary of the issue date or during the 30 days thereafter.
Canada Investment Bonds were non-redeemable until maturity, but were shorter-term bonds with a three-year maturity. They were available only through investment brokers. They were offered from October 1, 2003, and April 1, 2004; only 6 series were issued before their discontinuation.
^"CSB FAQ". Govt of Canada. Retrieved December 7, 2011.
^"4 Reasons for Buying Victory Bonds". World Digital Library. 1917. Retrieved June 30, 2013.
^Tasker, John Paul (September 26, 2016). "Liberals consider ending costly Canada Savings Bond program". CBC News. Retrieved September 27, 2016.
^"Canada Savings Bonds - An old standby faces new challenges". CBC. October 3, 2007. Retrieved December 7, 2011.
^Ottawa asks Canadians if Canada Savings Bonds are outdated Bill Curry, The Globe and Mail September 27, 2016
^Wong, Craig (June 17, 2015). "Ottawa to keep Canada Savings Bonds despite report urging end to program". CTV News. Retrieved April 22, 2019.
^Liberals consider ending costly Canada Savings Bond program John Paul Tasker, CBC News September 26, 2016
^"Budget 2017: Chapter 4 - Tax Fairness for the Middle Class". March 22, 2017.
External linksedit
Official website
CBC News In Depth: Canada Savings Bonds
Rest in peace, CSB: A eulogy for the Canada Savings Bond
January 01, 1970
canada, savings, bond, french, obligations, épargne, canada, investment, instrument, offered, government, canada, from, 1945, 2017, sold, between, early, october, december, every, year, issued, bank, canada, intended, offer, competitive, interest, rate, guaran. The Canada Savings Bond French Obligations d epargne du Canada was an investment instrument offered by the Government of Canada from 1945 to 2017 sold between early October and December 1 of every year 1 It was issued by the Bank of Canada and was intended to offer a competitive interest rate and had a guaranteed minimum interest rate Contents 1 History 2 Types of bonds 3 See also 4 References 5 External linksHistory edit nbsp 4 Reasons for Buying Victory Bonds by unknown Canadian Government created 1917 The Central Powers leaders shown left to right are Kaiser Wilhelm II Franz Joseph Mehmed VI and Ferdinand I of Bulgaria Canada started selling war bonds marketed as Victory Bonds in 1917 to raise money during World War I for the Allies of World War I Five bond campaigns were held from 1915 to 1919 To advertise the purchasing of Victory Bonds the Victory Loan Dominion Publicity Committee created artwork held parades and had celebrity endorsements Community members who bought many Victory Bonds were given a Victory Loan Honour Flag as a token of gratitude 2 The program was revived for World War II Canada Savings Bonds were first offered in 1945 in order to replicate the success of Victory Bonds 3 In 2004 consultants gave the Department of Finance a report suggesting the CSB program be scrapped giving an overall program cost savings of about 650 million in nine years Then finance minister Ralph Goodale rejected the recommendation as the program remained popular especially with first time investors and opted to have the program changed to be more competitive and attract investors 4 The value of bonds issued declined from 55 billion Canadian in 1987 to just over 6 billion in 2015 5 A government commissioned study by KPMG in June 2015 recommended cancelling the program Despite this recommendation the Department of Finance ruled out cancellation despite the program s estimated 58 million annual cost 6 As of October 2016 7 the Liberal government considered ending the program On March 22 2017 the federal budget announced its decision to end the sale of new CSBs saying they would be discontinued in 2017 No further bond purchases will be allowed however existing bonds will still be honoured until they are redeemed 8 Types of bonds editCanada Savings Bonds were available in regular interest which paid the interest directly to the bond holder and compounding interest which added to interest to the principal for the purpose of future interest calculations only paying when the bond was redeemed The interest rate was guaranteed for 1 year and could fluctuate with market conditions for the remaining 9 years until its maturity These bonds were redeemable at any time Canada Premium Bonds were also a available in regular and compounding interest These bonds introduced in 1997 differ from the regular savings bonds in that they were sold with a higher interest rate fixed through the third year the interest rate would fluctuate for the remaining 7 years with market conditions until its maturity This greater interest rate stability was considered a premium feature Conversely they were only redeemable on the anniversary of the issue date or during the 30 days thereafter Canada Investment Bonds were non redeemable until maturity but were shorter term bonds with a three year maturity They were available only through investment brokers They were offered from October 1 2003 and April 1 2004 only 6 series were issued before their discontinuation See also editEpargne Placements Quebec Ontario Savings Bond Saskatchewan Savings BondReferences edit CSB FAQ Govt of Canada Retrieved December 7 2011 4 Reasons for Buying Victory Bonds World Digital Library 1917 Retrieved June 30 2013 Tasker John Paul September 26 2016 Liberals consider ending costly Canada Savings Bond program CBC News Retrieved September 27 2016 Canada Savings Bonds An old standby faces new challenges CBC October 3 2007 Retrieved December 7 2011 Ottawa asks Canadians if Canada Savings Bonds are outdated Bill Curry The Globe and Mail September 27 2016 Wong Craig June 17 2015 Ottawa to keep Canada Savings Bonds despite report urging end to program CTV News Retrieved April 22 2019 Liberals consider ending costly Canada Savings Bond program John Paul Tasker CBC News September 26 2016 Budget 2017 Chapter 4 Tax Fairness for the Middle Class March 22 2017 External links editOfficial website CBC News In Depth Canada Savings Bonds Rest in peace CSB A eulogy for the Canada Savings Bond Retrieved from https en wikipedia org w index php title Canada Savings Bond amp oldid 1195062790, wikipedia, wiki, book, books, library,
