January 2018

Canadian Public Sector Borrowers Roundtable 2017

RBC Capital Markets hosted the Public Sector Borrowers Roundtable, gathering a group of Canadian SSA issuers to discuss the outlook for the economy, debt markets, rate rises, the housing market, geopolitical uncertainties, and what it means for Canada’s borrowers.

Highlights from the session:

  • The Canadian economy fared well in 2017, experiencing above-potential growth in real GDP of close to 3% which led the Bank of Canada to raise rates twice by a cumulative 50bps. A key part of this rebound has been the stabilization and bounce-back in growth in Alberta following the oil price shock, as well as strong regional housing markets, a firming global economy, supportive monetary policy and federal fiscal actions.
  • However, this pace of very rapid growth is not sustainable and it is expected that there will be a more balanced growth in 2018. Over the medium term, the Canadian economy is expected to return to more modest rates of growth of around 2%, reflecting the effects of population ageing and weak global and domestic productivity growth.
  • Furthermore, uncertainty over Canada’s trade relationship with the US, geopolitical instability and changing global monetary policy are just three of many concerns that borrowers, bankers and investors in Canada’s public sector bond markets will have to deal with in 2018.

The session was transcribed by GlobalCapital as a summary piece and featured in their Review of the Year 2017 and Outlook 2018 publication.

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