Canada: Provincial Money Market Purchase Program

In response to the COVID-19 crisis in early 2020, the Bank of Canada (BoC) enacted wide-ranging measures to support the flow of credit to individuals, firms, and municipalities. On March 24, 2020, the BoC established the Provincial Money Market Purchase Program (PMMPP) to address liquidity strains in provincial funding markets. The BoC initially committed to purchasing up to 40% of each offering of directly issued provincial money market securities with terms of 12 months or less, including provincial treasury bills and short-term promissory notes. All Canadian provinces were eligible for participation in the program. The program's utilization peaked at 7.6 billion Canadian dollars (CAD) (USD 5.7 billion) in provincial money market securities held by the BoC during the week of July 1, 2020. The announcement of the program led to a swift recovery in primary issuances and helped to tighten spreads on three-month treasury bills for Ontario and Quebec, the two most populous provinces. Citing improved conditions in short-term borrowing markets, the BoC announced the discontinuation of the PMMPP on November 9, 2020.