The Honourable Jim Flaherty, Minister of Finance, today announced that the Government’s prudential liquidity plan is on track to be fully implemented by the summer of 2013, well in advance of the original target date of March 2014.
“Given strong and continuing demand for Government of Canada securities, it is both advantageous and prudent to have the Government’s prudential liquidity plan in place a full nine months ahead of schedule,” said the Minister.
Once the prudential liquidity plan is fully implemented, the Government’s overall liquidity levels will increase by $35 billion and will cover at least one month of net projected cash flows, including coupon payments and debt refinancing needs.
As part of this plan, liquid foreign exchange reserves have increased by $10 billion and government deposits held with financial institutions and the Bank of Canada have increased by $15 billion. Government deposits held with the Bank of Canada will increase by another $10 billion by the summer.
The Government holds liquid financial assets in the form of domestic cash deposits and foreign exchange reserves to safeguard its ability to meet payment obligations in situations where normal access to funding markets may be disrupted or delayed. This also supports investor confidence in Canadian government debt.
Kathleen Perchaluk
Press Secretary
Office of the Minister of Finance
613-996-7861
Jack Aubry
Media Relations
Department of Finance
613-996-8080
