{"id":73059,"date":"2026-05-07T12:03:59","date_gmt":"2026-05-07T12:03:59","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2026\/05\/07\/posthaste-investors-are-demanding-more-to-hold-canadas-debt-and-were-all-are-paying-the-price\/"},"modified":"2026-05-07T12:03:59","modified_gmt":"2026-05-07T12:03:59","slug":"posthaste-investors-are-demanding-more-to-hold-canadas-debt-and-were-all-are-paying-the-price","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2026\/05\/07\/posthaste-investors-are-demanding-more-to-hold-canadas-debt-and-were-all-are-paying-the-price\/","title":{"rendered":"Posthaste: Investors are demanding more to hold Canada's debt \u2014 and we're all are paying the price"},"content":{"rendered":"

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\"\"<\/p>\n

Bond markets are rallying after news of a possible peace deal in the Middle East, with yields dropping around the world on hopes of that inflation will stay contained and central banks will keep their powder dry. <\/p>\n

But long-term yields didn\u2019t fall far and chances are they won\u2019t stay down because bigger forces are at work here. <\/p>\n

\u201cEven if a permanent de-escalation were to come to fruition, the risk that the long-end remains high is very real,\u201d said National Bank of Canada strategists Kyle Dahms and Taylor Schleich. <\/p>\n

They estimate that the average 10- and 30-year borrowing cost in the G7 ended April at a 17-year high, \u201c(and we remain within a few basis points of these levels today).\u201d <\/p>\n

\u201cThe lack of fiscal discipline combined with a high level of geopolitical risk will continue to put upward pressures on term premiums going forward,\u201d they said. <\/p>\n

\"\"<\/p>\n

Term premiums are the extra compensation investors demand for holding long-term government bonds. A key reason they are staying high is investor concerns about rising debt. <\/p>\n

The pandemic raised public debt levels, but these have continued to climb as new shocks hit including Donald Trump\u2019s trade war and most recently the conflict in the Middle East. Higher military and defence spending have also contributed. <\/p>\n

\u201cAs a result, governments across advanced economies are issuing large volumes of long-term bonds at a time when the supply of these bonds is already elevated,\u201d said a study by the Bank of Canada . <\/p>\n

The bank said market intelligence gathered through conversations with financial market participants suggests that a key factor to the increase in term premiums is \u201cgrowing unease\u201d about whether the market can absorb such a large volume of government debt. <\/p>\n

During the pandemic central banks bought up a significant share of the new issuance, which kept yields lower. Now these banks have wound down those programs and in some cases are selling bonds on the secondary market, said the study. <\/p>\n

Private investors have stepped in to pick up the slack, but are seeking higher compensation. <\/p>\n

Canada\u2019s inflation and fiscal balance sheet may be in better shape than many of its G7 peers, but it\u2019s not immune to these pressures. <\/p>\n

As a small open economy, Canada\u2019s long-term government bond yields are heavily influenced by global forces and closely track U.S. Treasury yields, said the Bank of Canada . Over the past 20 years the term premium for yields on 10-year government bonds has moved in tandem with other advanced nations. <\/p>\n

Since 2023 that premium has increased and is now at levels not seen in over a decade, said the bank. <\/p>\n

\"<\/p>\n

Why is this important to you and me? <\/p>\n

\u201cYields on long-term government bonds play a crucial role in the economy by directly influencing the interest rates charged on mortgages and business loans,\u201d said the Bank of Canada. <\/p>\n

So the more investors demand to hold our debt, the more we pay on credit cards and mortgages and that in turn drags on the economy. <\/p>\n

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Sign up here to get Posthaste delivered straight to your inbox.<\/strong><\/em> <\/p>\n

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\"\"<\/strong> <\/p>\n<\/p>\n

\"\"<\/p>\n

Whether artificial intelligence is taking jobs is a contentious debate with not a lot of data nor a lot of consensus on causality. <\/p>\n

Research suggests that in the United States, jobs for younger workers aged 22 to 25 in AI-exposed occupations are declining by about 16 per cent, while employment for experienced workers remains stable, says a report from Desjardins Group. <\/p>\n

Some examples of AI-exposed jobs would be customer service representatives and computer programmers. <\/p>\n

Similar findings have yet to show up in Canada, where AI adoption has been slower, but, as today\u2019s chart shows, that hasn\u2019t stopped Canadian workers from worrying about it. <\/p>\n

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\"\"<\/p>\n

    \n
  • Canada\u2019s Parliamentary Budget Officer will post a new report on the federal government\u2019s spending plan<\/li>\n
  • Today\u2019s Data:<\/strong> United States nonfarm productivity, construction spending, consumer credit
    <\/strong><\/li>\n
  • Earnings:<\/strong> Aritzia Inc., Airbnb Inc., Expedia Group Ltd.<\/li>\n<\/ul>\n
    \n

    \"\"<\/p>\n

    \"\"<\/p>\n

    <\/figure>\n
    \n

    \"\"<\/strong> <\/p>\n

      \n
    • Salad days: How a Canadian is taking a bite out of America\u2019s monopoly of our dinner tables<\/li>\n
    • \u2018It will take national resolve\u2019 to grow Canada\u2019s oil exports: Suncor CEO<\/li>\n
    • Does this 84-year-old suffer from the \u2018Multimillionaire\u2019s Dilemma?\u2019<\/li>\n<\/ul>\n
      \n

      \"\" <\/p>\n

      Gerry, in his late 70s, has accumulated sufficient retirement savings to live comfortably for the remainder of his life, but with volatility on the rise, he is worried about his investments should the market crash. Should he switch to a safe haven or stay the course? Find out what FP Answers has to say. <\/p>\n

      \n

      <\/span>\"\" Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country\u2019s most important sectors. Sign up here. <\/p>\n

      \n
      Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at <\/span>wealth@postmedia.com<\/span> with your contact info and the gist of your problem and we\u2019ll find some experts to help you out while writing a Family Finance story about it (we\u2019ll keep your name out of it, of course).<\/span><\/div>\n
      \n

      McLister on mortgages<\/h2>\n

      Want to learn more about mortgages? Mortgage strategist Robert McLister\u2019s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won\u2019t want to miss. Plus check his mortgage rate page for Canada\u2019s lowest national mortgage rates, updated daily. <\/p>\n

      \n

      Financial Post on YouTube<\/h2>\n

      Visit the Financial Post\u2019s YouTube channel for interviews with Canada\u2019s leading experts in business, economics, housing, the energy sector and more. <\/p>\n

      \n

      Today\u2019s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.<\/em> <\/p>\n

      Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com . <\/p>\n

      \n
        \n
      • Young Canadians are once again leaving Atlantic Canada<\/li>\n
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        Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here<\/em> <\/p>\n

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        Posthaste: Investors are demanding more to hold Canada's debt \u2014 and we're all are paying the price<\/a>
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        2026-05-07 12:03:59<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

        Bond markets are rallying after news of a possible peace deal in the Middle East, with yields dropping around the world on hopes of that inflation will stay contained and…<\/p>\n","protected":false},"author":2,"featured_media":73060,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-73059","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/73059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=73059"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/73059\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/73060"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=73059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=73059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=73059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}