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Canada projects higher bond issuance, budget deficit in next fiscal year

Canada expects to issue C$119 billion in government bonds in the 2019-2020 fiscal year, higher than the estimated C$100 billion issued in the current fiscal year ending March 31, according to the government's new budget plan.

The government expects to increase its Treasury bill issuance to C$151 billion in the 2019-2020 fiscal year from an estimated C$131 billion a year ago. The rise in the borrowing plan is largely in line with estimates, as the government's refinancing needs have increased, according to Andrew Kelvin, senior Canada rates strategist at TD Securities.

Canada's budget deficit is expected to expand to C$19.8 billion in the 2019-2020 fiscal year, from an estimated deficit of C$14.9 billion in the prior year. Federal debt as a percentage of GDP is projected to dip to 30.7% in the upcoming fiscal year from 30.8% projected in fiscal 2018-2019.