Quebec Bond Yields Approach Historic Parity With Ontario

The video discusses the recent improvements in Quebec's bond market, highlighting how the province's long-term bonds have closed the yield gap with Ontario's bonds. This change is attributed to Quebec's prudent fiscal policies, including balanced budgets and reduced borrowing needs. Historically, Ontario had an advantage due to a better debt-to-GDP ratio, but Quebec's steady debt management has shifted investor confidence. The future yield comparison between Quebec and Ontario will depend on Ontario's upcoming budget announcements.

What recent change has occurred in the bond market between Quebec and Ontario?

• Quebec's bonds are now trading at a higher yield than Ontario's.

• The spread between Quebec and Ontario's long-term bonds has almost disappeared.

• Ontario's bonds have started trading at a discount compared to Quebec's.

• Quebec's short-term bonds have increased in yield compared to Ontario's.

Which fiscal policy has Quebec implemented to gain investor confidence?

• Eliminating the generation fund

• Reducing budget surpluses

• Increasing borrowing needs

• Balancing the budget for multiple years

What is the purpose of Quebec's generation fund?

• To pay down debt in the future

• To increase immediate spending

• To fund new infrastructure projects

• To provide tax cuts

Why did Ontario traditionally have an advantage over Quebec in bond yields?

• Quebec had higher borrowing costs.

• Ontario had a smaller debt pile compared to GDP.

• Quebec had a better debt-to-GDP ratio.

• Ontario had a longstanding budget deficit.

What factor could influence whether Quebec's bond yields fall below Ontario's?

• Ontario's current debt pile

• Quebec's future borrowing needs

• Quebec's generation fund performance

• Ontario's upcoming budget management