Bonds were first introduced as ways to fund the war effort of WWI and WWII. In 1946, the Canada Savings Bonds Program was launched along with the Payroll Savings Program. To this day, the Canada Savings Bonds Program has contributed to Canada’s history and helped shape the country to what it is today.
1939-45: Victory Bonds
Bonds first made their appearance in Canada during the First and Second World Wars as War Savings Certificates and Victory Bonds. They were used to fund the war efforts.
1946: Launch of the CSBs and the original Payroll Program
CSBs were introduced as part of Canada's Postwar Financing Program. The Program provided cost-effective funding for the Government and served as a savings vehicle for Canadians.
- Certificated CSBs were purchased through payroll deductions
- Customers received bonds upon full payment
- Up to 16,000 employers participated in this Program
1953: Fully registered bonds
Acting as an agent of the Government of Canada, the Bank of Canada paid the annual interest directly to the bond holder.
1956: Escalating coupon bonds were introduced.
1976: The Canada Savings Bonds Program reached its peak, representing 45% of the total marketable debt outstanding.
1977: Regular-interest "R" bonds and compound-interest "C" bonds replaced old style coupon bonds. Direct deposit of interest payments was also made possible with the introduction of the new bonds.
1987-88: The CSB Program reached its peak in terms of total amount of retail debt outstanding – nearly $55 billion
1996: New Payroll Savings Program
1997: Introduction of The Canada RSP and The Canada RIF
CSBs were allowed to be purchased directly as an RSP without a Self-Directed Plan, and without fees. Existing bonds could also be transferred into The Canada RSP/RIF without fees or new cash investment.
1998: Introduction of the Canada Premium Bond (CPB)
The CPB was introduced with the same general features as the Canada Savings Bond (CSB), but with a higher rate of interest at the time of issue than a CSB on sale at the same time and is cashable once a year.
The product provided Canadians with more options to save and served its debt management objective of raising cost-effective funding.
2010: Program Changes
- Campaign sales period is changed from 6 to 2 months.
- Canadians can no longer open new Canada RSP or Canada RIF accounts.
- Bonds will mature at the end of their individual term.
2012: The CSB Program was streamlined in the face of increasing market competition and to help administrative costs. With the proliferation of alternative investments and savings instruments, and CDIC insurance protection offered in 1967, the sales of CSBs and CPBs continued to decline year over year.
- CSBs offered exclusively through the Payroll Savings Program.
- Only CPBs are available through financial institutions, dealers and by phone.
- CPBs become cashable anytime with interest paid up until the last anniversary date of issue.
- Term to maturity for all bonds shortened to three years from 10 years.
2017: No new issuance of CSBs and CPBs as of November. Unmatured CSBs and CPBs will continue to be honoured until the time of redemption or maturity.
2021: All CSBs and CPBs stop earning interest by December 2021. This includes certificated bonds, Payroll Savings plans, and The Canada RSP and The Canada RIF plans.