Lending to National Governments

Lending to National Governments

Canada, as a creditor to other national governments, is committed to following the highest standards on debt transparency. In June 2021, Canada, along with other G7 countries, committed to publishing its creditor portfolios on a loan-by-loan basis for future direct lending. In doing so, Canada and the rest of the G7 has achieved the highest rating on sovereign lending publication practices as per the G20 Operational Guidelines for Sustainable Financing (OGSF). The aim of these guidelines is to "enhance access to sound financing for development while ensuring that sovereign debt remains on a sustainable path by fostering information sharing and cooperation among borrowers, creditors and international financial institutions, as well as learning through capacity building."

Canada has loans with other national governments through the following Canadian government entities:

• Global Affairs Canada (GAC)
  • To support export trade promotion (i.e., "Canada Account" transactions which are managed by Export Development Canada on behalf of the Government); and,
  • To support international development.
• Finance Canada to support macroeconomic financial assistance.
• Export Development Canada to support export trade development.

Lending to national governments will continue to be reported in the Public Accounts of Canada and by Export Development Canada (EDC).

Clear, accurate and easily accessible information on other national governments' debts owed to Canada supports improved governance and enables citizens and civil society to better hold their governments accountable, contributing to long-term sustainable and inclusive growth.

Canada provides further debt support to developing countries through various initiatives.

• From May 2020 to December 2021, Canada provided almost $100 million in temporary debt service relief for the poorest countries through the G20 and Paris Club agreed Debt Service Suspension Initiative (DSSI).
• In September 2022, Canada and other official creditors to Ukraine agreed to provide a coordinated suspension of debt service due by Ukraine. In March 2023, Canada and other official creditors provided financing assurances to Ukraine in support of Ukraine's IMF program. These financing assurances entail an extension of the debt service standstill until the program's conclusion in 2027, and a future treatment prior to the conclusion of the IMF program consistent with program parameters. In December 2023, Canada and other official creditors agreed to a Memorandum of Understanding outlining the terms of their debt suspension for the duration of Ukraine's IMF program.
• In October 2023, Canada announced that it would offer climate resilient debt clauses (CRDCs) in all new sovereign lending. Canada has spearheaded the development of CRDCs, which offer essential debt relief to borrowers in the wake of climate disasters. To date, Canada has provided four loans with CRDCs to South Africa, Guyana, Ecuador, and Moldova.
• In June 2024, G7 leaders agreed to provide Ukraine with approximately USD $50 billion in financial support through the Extraordinary Revenue Acceleration Loan mechanism, with principal and interest of bilateral loan commitments repaid by extraordinary revenues stemming from the immobilisation of Russian sovereign assets. At that time, Canada announced it would contribute $5 billion to the initiative. Canada concluded negotiations on its $5 billion ERA loan agreement with the Government of Ukraine in March 2025 and disbursed $2.5 billion of this amount that same month.