Canada 18-K Annual report (foreign governments)

Exhibit D

DESCRIPTION OF CANADA

TABLE OF CONTENTS

	Page
General Information		3
The Canadian Economy		6
External Trade		12
Balance of Payments		14
Foreign Exchange and International Reserves		16
Government Finances		17
Debt Record		28
Monetary and Banking System		29
Claims and Pending and Threatened Litigation		33
Tables and Supplementary Information		35

Unless otherwise indicated, dollar amounts hereafter in this document are expressed in Canadian dollars. On December 16, 2010, the noon spot rate of the Bank of Canada for conversion of Canadian dollars (“$”) to United States dollars (“U.S.$”) was $1 = U.S.$0.9944.

2

Certain information contained in the Exhibit has been extracted or compiled from public official documents of Canada, which include statistical data subject to revision. Canada is sometimes referred to as the “Government of Canada” or the “Government” in this Exhibit.

CANADA

GENERAL INFORMATION

Area and Population

Canada is the second largest country in the world, with an area of 9,984,670 square kilometers of which about 891,163 square kilometers are covered by fresh water. The occupied farm land is about 7% and the commercial forest land is about 30% of the total area. The population on July 1, 2010 was estimated to be 34.1 million. Approximately 69% of Canada’s population lives in metropolitan areas of which Toronto, Montreal and Vancouver are the largest. Most of Canada’s population lives within 200 kilometers of the United States border.

Form of Government

Canada is a federal state composed of ten provinces and three territories. In 1867, the United Kingdom Parliament adopted the British North America Act, which established the Canadian federation comprised of, at that time, the Provinces of Ontario, Québec, Nova Scotia and New Brunswick. Since then, six additional provinces (Manitoba, British Columbia, Prince Edward Island, Saskatchewan, Alberta and Newfoundland and Labrador), along with the Yukon Territory, the Northwest Territories and the territory of Nunavut (which was carved out of the Northwest Territories on April 1, 1999), have become parts of Canada.

The British North America Act (which has been renamed the Constitution Act, 1867) gave the Parliament of Canada legislative power in relation to a number of matters including all matters not assigned exclusively to the legislatures of the provinces. These powers now include matters such as defense, the raising of money by any mode or system of taxation, the regulation of trade and commerce, the public debt, money and banking, interest, bills of exchange and promissory notes, navigation and shipping, extra-provincial transportation, aerial navigation and, with some exceptions, telecommunications. The provincial legislatures have exclusive jurisdiction in such areas as education, municipal institutions, property and civil rights, administration of justice, direct taxation for provincial purposes and other matters of purely provincial or local concern.

The executive power of the federal Government is vested in the Queen, represented by the Governor General, whose powers are exercised on the advice of the federal Cabinet, which is responsible to the House of Commons. The legislative branch at the federal level, Parliament, consists of the Crown, the Senate and the House of Commons. The Senate has 105 seats. There are 24 seats each for the Maritime Provinces, Québec, Ontario and Western Canada, 6 for Newfoundland and Labrador and 1 each for the three territories. Senators are appointed by the Governor General on the advice of the federal Cabinet and hold office until age 75. The House of Commons has 308 members, elected by voters in single-member constituencies. The leader of the political party that gains the most seats in each general election is usually invited by the Governor General to be Prime Minister and to form the Government. The Prime Minister selects the members of the federal Cabinet from among the members of the House of Commons and the Senate (in practice almost entirely from the former). The House of Commons is elected for a period of five years. Since May 2007, the Canada Elections Act requires that a general election be held on a fixed date: the third Monday of October in the fourth calendar year following the previous general election. However, the law does not prevent the Governor General from dissolving Parliament at another date. The date of a general election is set by the Governor in Council.

The most recent general election was held on October 14, 2008. As a result of that election the Conservative Party formed the Government. The distribution of seats in the House of Commons is as follows: the Conservative Party has 143 seats, the Liberal Party has 77 seats, the Bloc Québécois has 47 seats, and the New Democratic Party has 36 seats. There are 2 independent members and 3 vacant seats.

The executive power in each province is vested in the Lieutenant Governor, appointed by the Governor General on the advice of the federal Cabinet. The Lieutenant Governor’s powers are exercised on the advice of the provincial cabinet, which is responsible to the legislative assembly. Each provincial legislature is composed of a Lieutenant Governor and a legislative assembly and, depending on the province, members of provincial legislative assemblies are elected for 4 or 5 years. The practice of selecting the provincial premier and the provincial cabinet in each province follows that described for the federal level, as does dissolution of a legislature.

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The judicial branch of government in Canada is composed of an integrated set of courts created by federal and provincial law. At the federal level there are two principal courts, the Supreme Court of Canada which is the highest appeal court in Canada and the Federal Court of Canada which, among other things, deals with federal revenue laws and claims involving the Government. Judges of the two federally constituted courts and those of the provincial superior and county courts are appointed by the Governor General on the advice of the federal Cabinet and hold office during good behavior until age 70 or 75. Judges of the magistrates courts (commonly now known as provincial courts) are appointed by the provincial government and usually hold office until age 65 or 70.

Constitutional Reform

In April 1982, Her Majesty the Queen proclaimed the Constitution Act, 1982, terminating British legislative jurisdiction over Canada’s Constitution. The Constitution Act, 1982 provides that Canada’s Constitution may be amended pursuant to an amending formula contained therein and contains the Canadian Charter of Rights and Freedoms, including the linguistic rights of Canada’s two major language groups.

The government of Québec did not sign the constitutional agreement which led to the repatriation of the Canadian Constitution and the proclamation of the Constitution Act, 1982. Although Québec is legally bound by the Constitution Act, 1982, the government of Québec set out five conditions for accepting the legal legitimacy of the Act. Discussions on those principles led on April 30, 1987 at Meech Lake to a unanimous agreement by First Ministers on principles respecting each of Québec’s conditions.

A constitutional resolution to give effect to the Meech Lake Accord was adopted by Parliament and eight provinces before the deadline for ratification on June 23, 1990. In the absence of ratification by Newfoundland and Manitoba, the amendment was not adopted. In the wake of this event, the most extensive series of public consultations on constitutional matters ever to occur in Canada began through the work of both provincial and federal commissions and committees, among other things. Recommendations produced by this process were then assessed by a series of multilateral negotiations involving the federal, provincial and territorial governments and four national Aboriginal organizations, held from April to July 1992. Agreement was reached on a wide range of constitutional issues through the multilateral process which led to a First Ministers’ Conference held in Charlottetown in August 1992.

The Charlottetown Accord was an extensive package of reforms agreed upon by the federal, provincial and territorial governments and the four Aboriginal organizations. On October 26, 1992, Canadians were asked in a referendum if they agreed that the Constitution of Canada should be renewed on the basis of the Charlottetown agreement. A majority of Canadians in a majority of the provinces, including a majority in Québec and a majority of Status Indians living on reserves, declined to provide such a mandate. Consequently, governments set aside the constitutional issue and announced their intention to concentrate on social and economic initiatives that do not require constitutional change.

Québec

In September 1994, the Parti Québécois was elected, and its platform called for Québec’s accession to independence. On October 30, 1995, the government of Québec held a consultative referendum under provincial law, seeking a mandate to secede from Canada and proclaim Québec’s independence, after having made a formal offer of a new economic and political partnership between Québec and the rest of Canada. The government’s proposal was rejected by a vote of 50.6% against and 49.4% in favour, with a participation rate of 93%. While all sides accepted the 1995 referendum results, the Parti Québécois has not abandoned the goal of achieving independence for Québec.

In September 1996, the Government of Canada referred a series of legal questions to the Supreme Court of Canada with a view to clarifying, at both domestic and international law, whether the government of Québec has the right to secede from Canada unilaterally. On August 20, 1998, the Supreme Court rendered judgment, ruling that the government of Québec cannot, under either the Constitution of Canada or international law, legally effect the unilateral secession of Québec from Canada. The Supreme Court also stated that, if a clear majority of Québecers were to clearly and unambiguously express their will to secede, the federal and provincial governments in Canada would then have a constitutional obligation to enter into negotiations to address the potential act of secession as well as its possible terms should, in fact, secession proceed.

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On June 29, 2000, the Government of Canada enacted a law to give effect to the requirement for clarity set out in the opinion of the Supreme Court. That law requires the House of Commons to assess, prior to any future referendum on the secession of a province, whether the referendum question made clear that the province would cease to be part of Canada and become an independent country. The law further requires that, after the vote itself, the House of Commons also assess whether there appeared to be a clear majority in support of the question. Only if both these conditions were met would the Government of Canada be authorized to enter into negotiations which might lead to the constitutional amendments required to effect secession.

In the provincial election of December 8, 2008, the federalist Québec Liberal Party was reelected for the third time since 2003 and forms a majority government having obtained 66 out of 125 seats in Quebec’s National Assembly (42% of the votes cast), as compared to 51 seats (35% of the votes cast) for the official opposition Parti québécois party, 7 seats (16% of the votes cast) for the Action démocratique du Québec and 1 seat (4% of the votes cast) for the Québec Solidaire party.

5

THE CANADIAN ECONOMY¹

General

The following chart shows the distribution of real gross domestic product (“GDP”) at basic prices (2002 constant dollars) in 2009, which is indicative of the structure of the economy.

DISTRIBUTION OF REAL GROSS DOMESTIC PRODUCT AT BASIC PRICES⁽¹⁾

Percentage Distribution in 2009

Source: Statistics Canada, Gross Domestic Product by Industry.

Note: Total may not add to 100% due to rounding.

(1) GDP is a measure of production originating within the geographic boundaries of Canada, regardless of whether factors of production are Canadian or non-resident owned, whereas gross national product (“GNP”) measures the value of Canada’s total production of goods and services — that is, the earnings of all Canadian owned factors of production. Quantitatively, GDP is obtained from GNP by adding investment income paid to non-residents and deducting investment income received from non-residents. GDP at basic prices represents the value added by each of the factors of production and is equivalent to GDP at market prices less net taxes on products. These differences can cause discrepancies in levels and growth rates of GDP at basic prices on pages 6 and 7 and GDP at market prices on pages 8 and 9.

(2) The agriculture, forestry, fishing, hunting, mining and oil and gas extraction sectors include a service component.

The volume of industry and sector output in the following discussion provides “constant dollar” measures of the contribution of each industry to GDP at basic prices. The share of service-producing industries in real GDP was 72.8% in 2009 while the remaining 27.2% was attributed to goods-producing industries.

¹  Quarterly and semi-annual figures or changes are based upon seasonally adjusted data, except where otherwise indicated. All percentage changes are compounded at annual rates. For percentage changes over more than one year, the method of computation includes growth over the entire period indicated. Unless otherwise specified, all growth rates on page 7 are calculated using real GDP at basic prices, constant 2002 dollars.

6

The following table shows the composition of Canada’s real GDP at basic prices (2002 constant dollars) by sector in 2000 and over the 2005-2009 period.

Real Gross Domestic Product at Basic Prices by Industry

	(For the years ended December 31,)
	2009		2008		2007		2006		2005		2000(1)		2009			2005			2000(1)
	Millions of 2002 constant dollars												(percentage distribution)
Agriculture (2)	$	23,002	$	24,073	$	22,114	$	21,821	$	21,700	$	21,033		1.9	%		1.9	%		2.1	%
Forestry, fishing and hunting		4,737		5,523		6,392		7,044		7,332		6,656		0.4			0.6			0.7
Mining and oil and gas extraction		52,286		56,900		58,478		57,946		56,402		52,183		4.4			4.9			5.1
Manufacturing		146,610		167,905		181,229		185,353		188,043		190,628		12.3			16.2			18.6
Construction		68,648		74,799		71,539		68,687		66,158		51,655		5.7			5.7			5.0
Utilities		29,699		31,086		31,453		30,090		30,541		28,369		2.5			2.6			2.8
Transportation and warehousing		55,867		57,962		57,826		56,919		55,322		49,129		4.7			4.8			4.8
Wholesale and retail trade		140,572		145,297		142,792		136,585		129,271		103,071		11.8			11.1			10.1
Finance, insurance and real estate		250,972		245,600		240,756		232,467		222,968		189,822		21.0			19.2			18.5
Public administration and defence		73,090		71,107		69,014		67,352		65,044		58,098		6.1			5.6			5.7
Health, social, educational, professional and other services		348,715		347,413		339,525		329,671		319,236		276,955		29.2			27.5			27.0
Total (3)	$	1,194,198	$	1,227,665	$	1,221,118	$	1,193,935	$	1,162,017	$	1,025,570		100.0	%		100.0	%		100.0	%

Source: Statistics Canada, Input Output Division.

(1) Data does not add to total from 1997 to 2001 due to rebasing to 2002 constant dollars.

(2) Agriculture includes support activities for agriculture and forestry, fishing and hunting.

(3) May not add due to rounding.

The share of service-producing industries in real GDP at basic prices increased from 66.0% in 2000 to 72.8% in 2009. The fastest growing industry in this sector has been wholesale and retail trade, which grew at an average annual growth rate of 3.5% between 2000 and 2009, compared to an average annual growth rate of 2.8% for total service sector real GDP (2002 constant dollars). The goods-producing sector constituted 27.2% of real GDP at basic prices in 2009, down from 34.2% in 2000. The decline was most evident in manufacturing, with its share declining from 18.6% in 2000 to 12.3% in 2009.

Total year-over-year GDP growth was 3.2% in 2005, eased to 2.7% in 2006, then to 2.3% in 2007, 0.5% in 2008 and negative 2.7% in 2009. Following one of the worst recessions in Canadian history, real GDP increased 2.9%, 4.1% and 4.0% (year-over-year) in the first, second and third quarters of 2010 respectively, indicating that the economic recovery is on track.

Manufacturing output increased 1.8% in 2005 and fell 1.4% in 2006, 2.2% in 2007, 7.4% in 2008 and 12.7% in 2009. On a year-over-year basis, manufacturing output in 2010 increased 4.4% in the first quarter, 9.7% in the second quarter and 9.2% in the third quarter.

The construction sector was the second largest goods-producing sector in Canada in 2009. Construction activity rose by 4.8% in 2005, 3.8% in 2006, 4.2% in 2007 and 4.6% in 2008 before falling 8.2% in 2009. On a year-over-year basis, construction output rose 2.6% in the first quarter of 2010 followed by growth of 6.2% and 6.8% in the second and third quarters respectively.

Output from mining and oil and gas extraction rose by 1.0% in 2005, 2.7% in 2006 and 0.9% in 2007 but declined 2.7% in 2008 and 8.1% in 2009. On a year-over-year basis, output growth in this sector was 0.0%, 9.8% and 12.6% in the first three quarters of 2010 respectively.

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Although the share of agricultural output² in total real GDP was only 1.9% in 2009 (2002 constant dollars), agriculture is an important part of Canada’s economy and a significant contributor to foreign exchange earnings. Wheat is Canada’s principal agricultural crop and one of its largest export products by value. The wheat crop was 25.7 million tonnes in 2005, 25.3 million tonnes in 2006, 20.1 million tonnes in 2007, 28.6 million tonnes in 2008, and 28.8 million tonnes in 2009. Statistics Canada estimates wheat production to be 22.2 million tonnes in 2010.

Gross Domestic Income and Expenditure³

Nominal GDP at market prices was about $1.5 trillion in 2009. Nominal GDP grew at 6.4% in 2005, 5.6% in 2006, 5.5% in 2007, 4.6% in 2008, and negative 4.5% in 2009. Nominal GDP growth (year-over-year) was 5.4%, 6.8% and 6.3% in the first three quarters of 2010 respectively.

Gross Domestic Income and Expenditure

	First 3 quarter (10)				For the years ended December 31,
	2010		2009		2009		2008		2007		2006		2005
	(in millions of dollars)
Income
Labor income (1)		846,749		816,299		819,066		818,613		784,885		743,392		695,093
Corporate profits (2)		169,996		142,896		146,897		216,970		200,943		197,286		186,585
Non-farm unincorporated business income		105,363		97,737		98,999		91,331		89,908		86,785		84,024
Farm income		667		333		880		3,228		503		−35		1,210
Other net domestic income (3)		288		1,096		150,067		165,233		157,431		142,483		137,966
Net domestic income		1,284,103		1,206,417		1,215,909		1,295,375		1,233,670		1,169,911		1,104,878
Indirect taxes, capital consumption allowances and residual error		325,816		309,517		311,349		304,233		295,919		280,494		268,967
Gross Domestic Income		1,609,919		1,515,935		1,527,258		1,599,608		1,529,589		1,450,405		1,373,845
Expenditure
Consumer expenditure		936,119		892,488		898,728		890,351		851,603		801,742		758,966
Government expenditure (goods & services):
Federal (4)		65,455		61,853		62,394		58,880		53,907		53,004		50,599
Provincial-municipal (5)		348,895		326,471		330,623		306,433		285,037		265,714		246,352
Total government (6)		414,349		388,324		393,017		365,313		338,944		318,718		296,951
of which current		350,611		330,691		333,942		314,329		293,608		277,608		259,857
of which capital (7)		63,739		57,633		59,075		50,984		45,336		41,110		37,094
Residential construction		111,495		95,668		98,152		107,304		108,289		98,214		89,604
Business fixed investment:
Non-residential construction		85,416		88,048		86,279		105,301		92,528		85,236		72,752
Machinery and equipment		89,147		86,249		84,963		100,969		101,068		99,932		93,240
Total		174,563		174,297		171,242		206,270		193,596		185,168		165,992
Inventory accumulation:
Business non-farm		7,079		−5,789		−6,862		3,326		9,370		10,130		9,932
Farm		−2,475		−1,596		−1,315		2,117		−1,119		−727		655
Total		4,604		−7,385		−8,177		5,443		8,251		9,403		10,587
Exports (goods & services) (8)		471,368		434,453		438,553		563,948		534,718		524,075		519,435
Imports (goods & services) (9)		−502,628		−462,516		−464,722		−539,012		−505,055		−487,674		−468,270
Residual error of estimate		49		605		465		−9		−757		759		580
Gross Domestic Expenditure		1,609,919		1,515,935		1,527,258		1,599,608		1,529,589		1,450,405		1,373,845
Gross Domestic Expenditure in 2002 Chained Dollars		1,320,180		1,282,007		1,285,604		1,318,055		1,311,260		1,283,033		1,247,807

Source: Statistics Canada, National Income and Expenditure Accounts.

Note: Amounts may not add due to rounding.

(1) Includes military pay and allowances.

(2) Includes net interest and dividends paid to non-residents.

(3) Includes interest and miscellaneous investment income and government business enterprise profits before taxes.

(4) Net spending (outlays minus sales) including gross capital formation and Canada Pension Plan.

(5) Net spending (outlays minus sales) including gross capital formation and Québec Pension Plan.

(6) Includes government inventories.

(7) Includes inventory accumulations at all levels of government.

(8) Excludes investment income paid from non-residents.

(9) Excludes investment income paid to non-residents.

(10) Seasonally adjusted, annual rates.

2	Agricultural output includes support activities for agriculture and forestry, fishing and hunting.
3	Year-over-year growth rates for nominal GDP at market prices are based on not seasonally adjusted data.

8

Economic Developments⁴

Real output experienced robust growth between 1997 and 2000, increasing 5.2% in 2000 before a slowdown in global economic activity helped reduce growth to 1.8% in 2001. Real GDP (at market prices) growth was 3.0% in 2005, 2.8% in 2006, 2.2% in 2007, 0.5% in 2008, and negative 2.5% in 2009. In 2010, the economic recovery resulted in year-over-year real GDP growth of 2.1%, 3.4% and 3.4% in the first three quarters, respectively.

Real consumer spending rose 3.7% in 2005, 4.2% in 2006, 4.6% in 2007, 2.9% in 2008 and 0.4% in 2009. Year-over-year growth in consumer spending was 3.5% in the first quarter, 3.5% in the second quarter and 3.4% in the third quarter of 2010.

Since attaining a peak of 20.2% in 1982, the personal saving rate trended downward until the mid-2000s, reaching 2.1% in 2005. Since then the personal savings rate increased to 3.5% in 2006, 2.8% in 2007, 3.6% in 2008 and 4.6% in 2009. The personal saving rate was 3.3% in the first quarter, 6.1% in the second quarter and 3.3% in the third quarter of 2010.

Year-over-year growth in non-residential business fixed investment was 12.4% in 2005, eased to 9.9% in 2006, 3.3% in 2007, 3.4% in 2008 and negative 19.9% in 2009. On a year-over-year basis, non-residential business fixed investment declined 5.6% in the first quarter of 2010 before rising 4.2% and 8.7% in the second and third quarters of 2010, respectively.

The number of housing starts rose steadily in the early part of this decade but levelled off from 2004 to 2007 and has fallen since then. Following a level of 153 thousand units in 2000, housing starts increased to 220 thousand units in 2003 and 232 thousand units in 2004. Housing starts then eased to 224 thousand units in 2005, 229 thousand units in 2006, 228 thousand units in 2007 and 211 thousand units in 2008 and 149 thousands units in 2009. In 2010, the level of housing starts was 193 thousand, 200 thousand and 191 thousand units in the first three quarters, respectively (at annual rates).

Government spending on current goods and services grew by 1.4% in 2005, 3.0% in 2006, 2.7% in 2007, 3.9% in 2008 and 3.5% in 2009. Year-over-year growth in government spending on goods and services was 4.0% in the first quarter of 2010, 4.3% in the second quarter and 2.9% in the third quarter.

In current dollar terms, the trade balance in goods and services (on a balance of payments basis) was $50.3 billion in 2005, declined to $35.5 billion in 2006, $28.7 billion in 2007, $24.0 billion in 2008 and was a deficit of $27.2 billion in 2009. On average, in the first three quarters of 2010 the trade balance deficit in goods and services was $32.3 billion at annual rates (see also “Balance of Payments”).

⁴  In this section all figures, except the savings rates and the trade balance, are reported in real terms and growth rates are calculated from GDP at market prices, chained 2002 dollars, seasonally adjusted at annual rates unless otherwise noted.

9

Prices and Costs

The year-over-year increase in the GDP implicit price deflator was 3.3% in 2005, 2.7% in 2006, 3.2% in 2007, 4.1% in 2008 and negative 2.1% in 2009. In 2010, the year-over-year change in the implicit price deflator was 3.3% in the first quarter, 3.3% in the second quarter and 2.8% in the third quarter.

Since the introduction of inflation-targeting into monetary policy in 1991, year-over-year increases in the consumer price index (“CPI”) have remained almost entirely within the 1 to 3 per cent target range. The CPI rose 2.2% in 2005, 2.0% in 2006, 2.2% in 2007, 2.3% in 2008 and 0.3% in 2009. In 2010, CPI inflation rose to 1.6% in the first quarter, 1.4% in the second quarter and 1.8% in the third quarter.

Price Developments

	GDP		Consumer Price Index												Industrial
	Implicit						Total				Total Excluding				Product
For the years	Price Index						Excluding				Food &				Price
ended December 31,	(1)		Total		Food		Food		Energy		Energy		Shelter		Index
	(annual percentage changes)
2005		3.3		2.2		2.5		2.2		9.6		1.3		3.0		1.5
2006		2.7		2.0		2.3		2.0		5.1		1.5		3.4		2.4
2007		3.2		2.2		2.7		2.0		2.3		2.0		3.5		1.6
2008		4.1		2.3		3.5		2.2		9.9		1.2		4.2		4.3
2009		–2.1		0.3		4.9		–0.7		–13.5		1.1		–0.3		–3.4
2009Q4		0.7		0.8		1.9		0.6		–2.4		0.9		–1.7		–3.4
2010Q1		3.3		1.6		1.3		1.6		6.0		1.2		–1.0		–0.5
2010Q2		3.3		1.4		0.8		1.6		5.7		1.0		1.3		0.5
2010Q3		2.8		1.8		1.6		1.9		6.1		1.4		2.6		0.0

Source: Statistics Canada, National Income and Expenditure Accounts; Consumer Prices and Price Indexes; Industry Price Indexes.

(1) This implicit price index is based on seasonally adjusted data.

The average annual wage settlements (over the life of the contract) increased 2.3% in 2005, 2.5% in 2006, 3.3% in 2007, 3.2% in 2008 and 2.3% in 2009. Wage settlements were 2.1% in the first quarter of 2010, 2.0% in the second quarter and 1.8% in the third quarter.

10

Labor Market

The following table shows labor market characteristics for the periods indicated.

Labor Market Characteristics(1) (2)

(thousands of persons)

	Canada						Atlantic Provinces						Québec
For the years	Labor		Employ-		Unemploy-		Labor		Employ-		Unemploy-		Labor		Employ-		Unemploy-
ended December 31,	Force		ment		ment Rate		Force		ment		ment Rate		Force		ment		ment Rate
2005		17,343		16,170		6.8		1,201		1,076		10.4		4,053		3,717		8.3
2006		17,593		16,484		6.3		1,200		1,082		9.9		4,094		3,765		8.0
2007		17,946		16,866		6.0		1,208		1,097		9.2		4,150		3,852		7.2
2008		18,245		17,126		6.1		1,224		1,110		9.3		4,185		3,882		7.2
2009		18,369		16,849		8.3		1,234		1,104		10.6		4,199		3,844		8.5
2009Q4		18,424		16,876		8.4		1,240		1,108		10.6		4,197		3,851		8.3
2010Q1		18,466		16,944		8.2		1,236		1,107		10.4		4,209		3,873		8.0
2010Q2		18,613		17,119		8.0		1,240		1,114		10.1		4,259		3,921		7.9
2010Q3		18,701		17,202		8.0		1,248		1,116		10.6		4,281		3,937		8.0

	Ontario						Prairie Provinces						British Columbia
For the years	Labor		Employ-		Unemploy-		Labor		Employ-		Unemploy-		Labor		Employ-		Unemploy-
ended December 31,	Force		ment		ment Rate		Force		ment		ment Rate		Force		ment		ment Rate
2005		6,849		6,398		6.6		2,976		2,848		4.3		2,263		2,131		5.9
2006		6,927		6,493		6.3		3,067		2,949		3.8		2,305		2,196		4.8
2007		7,044		6,594		6.4		3,178		3,058		3.8		2,366		2,266		4.2
2008		7,155		6,687		6.5		3,256		3,133		3.8		2,426		2,314		4.6
2009		7,175		6,526		9.0		3,315		3,116		6.0		2,445		2,259		7.6
2009Q4		7,194		6,536		9.1		3,326		3,114		6.4		2,467		2,268		8.1
2010Q1		7,218		6,566		9.0		3,321		3,112		6.3		2,483		2,287		7.9
2010Q2		7,278		6,648		8.7		3,350		3,138		6.3		2,485		2,298		7.5
2010Q3		7,312		6,675		8.7		3,356		3,156		6.0		2,504		2,319		7.4

Source: Statistics Canada, The Labour Force.

(1) Unemployment levels are calculated using the difference between Labor Force and Employment.

(2) Quarterly levels are based on seasonally adjusted data.

Employment growth, on a year-over-year basis, was 1.4% in 2005, 1.9% in 2006, and 2.3% in 2007 before slowing to 1.5% in 2008 and declining by 1.6% in 2009. In the first three quarters of 2010, employment increased by 0.4%, 1.7% and 2.3% year-over-year, respectively. Meanwhile, year-over-year labor force growth was 0.9% in 2005, 1.4% in 2006, 2.0% in 2007 and 1.7% in 2008 before slowing down to 0.7% in 2009. In the first three quarters of 2010, the labor force grew by 0.9%, 1.3% and 1.7% year-over-year, respectively.

The unemployment rate declined from 6.8% in 2005 to 6.3% in 2006 and 6.0% in 2007 before increasing to 6.1% in 2008 and 8.3% in 2009. In 2010, the unemployment rate was 8.2% in the first quarter, 8.0% in the second quarter and 8.0% in the third quarter (seasonally adjusted).

11

EXTERNAL TRADE

Canada has continued to work towards implementing its trade goals of freer and more open markets based on internationally agreed rules and practices at multilateral, regional and bilateral levels.

At the multilateral level, Canada continues to be an active member of the World Trade Organization (“WTO”) and continues to fully participate in multilateral trade negotiations launched in Doha, Qatar in November 2001.

At the regional level, Canada is a member of the North American Free Trade Agreement (“NAFTA”) with both the United States and Mexico. Under NAFTA, as of January 1, 2003, virtually all tariffs for goods originating in Canada, the United States and Mexico have been eliminated.

Canada currently has bilateral free trade agreements in place with the following countries: Chile, Costa Rica, Israel, Peru and the European Free Trade Association (Norway, Switzerland, Iceland and Liechtenstein).

In January 2009, Canada removed import tariffs on a range of machinery and equipment for the purposes of stimulating domestic business investment. In March 2010, Canada began eliminating all remaining tariffs on manufacturing inputs entering the country, effectively making Canada a tariff-free zone for manufacturing. The majority of these tariffs have already been eliminated; however, some tariffs are being gradually eliminated by no later than January 1, 2015.

Merchandise Trade

The following table sets forth the composition of Canadian trade for the periods indicated.

The Composition of Canadian Merchandise Trade
(Balance of Payments Basis)

	First 3 quarters (2)				(For the years ended December 31,)
	2010		2009		2009		2008		2007		2006		2005
	(in millions of dollars)
Value of Exports
Wheat		3,200		4,673		5,824		6,870		4,638		3,609		2,697
Other agricultural products		19,615		19,585		25,634		27,734		25,862		24,540		24,550
Crude petroleum		36,379		28,803		42,503		60,970		40,997		38,575		30,357
Natural gas		12,600		11,885		15,749		33,046		28,071		27,805		35,989
Ores and metals		35,196		27,584		38,310		54,856		52,991		45,482		36,025
Lumber		3,599		2,837		3,900		5,350		7,387		9,161		10,382
Pulp & paper		7,437		6,655		8,765		11,841		11,896		12,205		12,210
Other materials		62,676		56,435		75,104		103,248		88,231		84,586		85,456
Motor vehicles		30,680		20,850		30,045		41,394		53,019		57,339		60,762
Motor vehicles parts		12,692		10,042		13,770		19,745		23,988		24,660		27,233
Machinery		13,270		15,013		19,202		23,443		22,330		20,550		19,942
Other end products		55,426		61,019		79,171		87,723		89,840		90,514		90,211
Special transactions		6,930		8,773		11,552		13,775		13,870		14,927		14,398
Total Exports (1)		299,699		274,154		369,529		489,996		463,120		453,952		450,210
Value of Imports
Edible products		20,859		21,183		27,988		27,001		24,294		22,231		20,811
Crude petroleum		18,165		15,023		20,960		34,179		24,116		22,553		21,544
Other crude materials		11,296		9,987		13,583		18,089		15,464		13,287		12,799
Fabricated materials		67,563		58,499		78,231		97,314		87,299		87,384		82,226
Motor vehicles		30,029		22,298		31,578		41,114		43,728		41,917		38,768
Motor vehicle parts		22,367		16,974		23,747		30,847		36,227		37,929		39,613
Machinery & equipment		83,915		82,464		107,934		122,713		116,584		114,728		110,931
Other end products		42,757		43,309		57,486		57,557		54,783		52,010		49,484
Special transactions		10,380		9,421		12,590		14,938		13,189		12,306		11,662
Total Imports (1)		307,331		279,158		374,097		443,752		415,683		404,345		387,838

Source: Statistics Canada, Canadian International Merchandise Trade.

(1) May not add due to rounding.

(2) Seasonally adjusted.

12

Canada is one of the leading trading nations of the world. Canada’s exports have always reflected the country’s high endowment in natural resources. However, Canada has been diversifying its exports over time, relying less on commodities and more on finished goods. The value of commodity exports as a share of merchandise exports dropped from 68.8% in 1980 to 58.4% in 2009. Over this period, the increase in exports of finished goods was led by automotive and miscellaneous end products. Canada’s imports consist mostly of manufactured goods; the two main components are machinery and equipment, and fabricated materials.

Canada and the United States are each other’s largest trading partners, reflecting the physical proximity of the two countries and their close economic and financial relationship. In 2009, trade with the United States accounted for 73.4% of the value of Canada’s merchandise exports and 63.2% of the value of Canada’s merchandise imports. According to the United States Census Bureau, trade with Canada accounted for 19.2% of the United States’ exports and 14.4% of its imports in 2009.

Geographical Distribution of Canadian Merchandise Trade
(Balance of Payments Basis)

	First 3 quarters						For the years ended December 31,
	2010			2009			2009			2008			2007			2006			2005
Exports (1)
United States		74.1			73.1			73.4			75.5			76.8			79.6			81.8
Japan		2.3			2.4			2.4			2.4			2.2			2.3			2.3
United Kingdom		4.1			3.5			3.5			2.9			3.1			2.5			2.1
European Union (2)		4.5			5.1			5.2			5.2			5.3			4.6			4.1
Other		15.0			15.8			15.5			14.0			12.7			11.0			9.7
		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Imports (1)
United States		63.3			63.3			63.2			63.4			65.0			65.6			66.9
Japan		2.4			2.5			2.5			2.6			2.9			2.9			2.9
United Kingdom		2.2			2.1			2.3			2.6			2.4			2.4			2.3
European Union (2)		7.4			8.1			8.1			8.0			7.8			8.0			7.6
Other		24.6			24.0			24.0			23.4			22.0			21.1			20.3
		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Source: Statistics Canada, Canadian International Merchandise Trade.

(1)	May not add due to rounding.
(2)	Excludes the United Kingdom. Includes Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

The following table presents volume and price indices of Canada’s merchandise trade for the periods indicated.

Merchandise Trade Indices
(Balance of Payments Basis)

	First 3 quarters				For the years ended December 31,
	2010		2009		2009		2008		2007		2006		2005
	(2002 = 100)
Indices of physical volume
Exports		91.5		85.4		86.2		101.8		107.4		105.9		105.1
Imports		129.4		112.2		114.2		134.8		133.5		126.5		120.3
Indices of prices
Exports		105.4		103.4		103.5		116.3		104.2		103.5		103.4
Imports		88.8		93.0		91.9		92.4		87.4		89.6		90.4
Terms of trade (1)		118.7		111.2		112.6		125.8		119.2		115.5		114.4

Source: Statistics Canada, Canadian International Merchandise Trade.

(1) Index of price of exports divided by index of price of imports multiplied by 100.

13

BALANCE OF PAYMENTS

The following table presents the balance of international payments for the periods indicated.

Canadian Balance of International Payments

	First 3 quarters(1)				(For the years ended December 31,)
	2010		2009		2009		2008		2007		2006		2005
	(in millions of dollars)
Current Account
Receipts
Goods and services		352,133		324,437		436,673		562,109		532,924		522,338		517,809
Goods		299,709		274,154		369,529		489,995		463,120		453,952		450,210
Services		52,424		50,283		67,144		72,113		69,804		68,386		67,599
Investment income		44,956		42,469		57,378		71,881		76,931		66,528		49,768
Current transfers		6,944		6,722		8,622		10,574		9,497		9,563		8,035
Current account receipts		404,033		373,628		502,673		644,563		619,352		598,428		575,612
Payments
Goods and services		376,378		346,273		463,904		538,184		504,277		486,866		467,492
Goods		307,345		279,159		374,097		443,752		415,683		404,345		387,838
Services		69,032		67,116		89,807		94,432		88,593		82,521		79,654
Investment income		58,703		52,706		71,523		88,302		90,800		80,049		72,685
Current transfers		8,657		7,967		10,770		11,159		11,504		11,023		9,533
Current account payments		443,739		406,947		546,196		637,645		606,580		577,938		549,710
Balances
Goods and services		−24,245		−21,837		−27,231		23,925		28,648		35,472		50,317
Goods		−7,637		−5,004		−4,568		46,244		47,437		49,606		62,372
Services		−16,608		−16,832		−22,663		−22,319		−18,790		−14,135		−12,055
Investment income		−13,747		−10,238		−14,145		−16,422		−13,869		−13,521		−22,917
Current transfers		−1,713		−1,245		−2,148		−585		−2,007		−1,460		−1,498
Current account balance		−39,705		−33,320		−43,523		6,918		12,772		20,490		25,902
Capital and financial account
Capital account		3,560		3,276		3,969		4,650		4,233		4,202		5,905
Financial account		41,858		26,824		39,960		−7,072		−18,906		−26,969		−29,255
Canadian assets, net flows
Canadian direct investment abroad		−4,484		−33,469		−44,389		−86,214		−62,003		−52,423		−33,370
Portfolio investment (2)		−11,440		−10,011		−8,667		13,653		−48,426		−78,668		−53,455
Foreign bonds		7,049		8,651		9,030		16,354		−28,902		−43,761		−29,488
Foreign stocks		−15,696		−17,166		−15,850		−7,914		−30,946		−28,107		−21,878
Other investment		−34,156		−37,925		−50,805		−37,611		−66,592		−35,877		−23,635
Loans		−9,678		−12,780		−17,460		−242		−10,860		−11,819		7,325
Deposits		−10,393		−8,638		−19,058		−37,335		−42,198		−9,002		−15,817
Official international reserves		−4,598		−14,699		−11,618		−1,711		−4,644		−1,013		−1,653
Other assets		−9,487		−1,805		−2,669		1,677		−8,890		−14,043		−13,489
Total Canadian assets, net flows		−50,079		−81,403		−103,861		−110,172		−177,021		−166,967		−110,460
Canadian liabilities, net flows
Foreign direct investment in Canada		13,812		13,792		21,327		58,975		123,148		68,395		31,132
Portfolio investment		87,211		82,786		110,865		29,797		−31,096		31,089		13,136
Canadian bonds		76,159		55,019		83,955		15,926		12,042		16,564		3,481
Canadian stocks		10,275		24,149		26,246		2,746		−41,994		10,814		9,133
Canadian money market		778		3,619		665		11,125		−1,143		3,711		522
Other investment		−9,086		11,648		11,629		14,327		66,062		40,514		36,937
Loans		232		−9,997		−11,081		4,759		12,617		19,635		5,992
Deposits		−10,374		12,760		13,878		10,495		48,566		20,389		28,951
Other liabilities		1,056		8,885		8,831		−927		4,879		491		1,994
Total Canadian liabilities, net flows		91,938		108,226		143,821		103,099		158,115		139,998		81,205
Total capital & financial account, net flows		45,418		30,098		43,929		−2,422		−14,673		−22,768		−23,350
Statistical discrepancy		−5,023		2,399		−405		−4,496		1,901		2,277		−2,552

Source: Statistics Canada, Canada’s Balance of International Payments.

Note: Amounts may not add due to rounding.

(1)  Year-to-date (not annualized). Current account data are seasonally adjusted. Capital account data, financial account data and statistical discrepancy are not seasonally adjusted.

(2) Includes foreign money market securities.

14

The current account deficit was $52.9 billion (seasonally adjusted, annualized level) in the first three quarters of 2010. Over the period since 2004, the three main components of the current account have evolved as follows:

(1)	The merchandise trade surplus decreased from $62.4 billion in 2005 to a deficit of $4.6 billion in 2009. In the first three quarters of 2010, the merchandise trade deficit was an average of $10.2 billion (annualized level).
(2)	The service account deficit worsened from $12.1 billion in 2005 to $22.7 billion in 2009. The services deficit averaged $22.1 billion (annualized level) in the first three quarters of 2010.
(3)	The deficit on net investment income payments narrowed from $22.9 billion in 2005 to $14.1 billion in 2009. The investment income deficit averaged $18.3 billion in the first three quarters of 2010 (annualized level).

Low inflation and a depreciation of the Canadian dollar helped support the merchandise trade surplus prior to 2002. An uneven recovery in the United States provided limited stimulus to exports in 2002 and an appreciation of the Canadian dollar restrained gains in the surplus when growth in the United States shifted to a higher pace in the period between 2003 and 2006. The continued appreciation of the Canadian dollar and the slowdown in the US economy helped reduce the merchandise trade surplus in 2007 and through the end of 2009. The continued decline in international demand as a result of a weak US dollar and a weak global economic recovery led to further deterioration in the merchandise trade balance deficit in the first three quarters of 2010.

Canada registered net outflows in the capital and financial account of $23.4 billion in 2005, $22.8 billion in 2006, $14.7 billion in 2007 and $2.4 billion in 2008 followed by a net inflow of $43.9 billion in 2009. Net inflows in the capital and financial account in the first three quarters of 2010 averaged $60.6 billion (annualized level).

Non-resident net purchases of Canadian bonds, stocks and money market instruments amounted to $13.1 billion in 2005, $31.1 billion in 2006 before declining to negative $31.1 billion in 2007. Non-resident purchases of Canadian bonds, stocks and money market instruments rebounded to $29.8 billion in 2008 and $110.9 billion in 2009. In 2010, portfolio investment from abroad increased to $116.3 billion (annualized level) over the first three quarters.

From 1980 to the early 1990s, foreign direct investment in Canada averaged just over $5 billion annually. In the mid-1990s, foreign direct investment in Canada began to rise sharply, peaking at $99.2 billion in 2000, mostly due to foreign purchases in the technology sector. Foreign direct investment was $31.1 billion in 2005, $68.4 billion in 2006, $123.1 billion in 2007, declined to $59.0 billion in 2008 before settling at $21.3 billion in 2009. Foreign direct investment was $18.4 billion over the first three quarters of 2010.

15

FOREIGN EXCHANGE AND INTERNATIONAL RESERVES

Since May 31, 1970, the Canadian dollar has been allowed to float so that the rate of exchange is determined by conditions of supply and demand in the market. Since then, the Canadian dollar has floated between a low of 61.79 U.S. cents in January 2002 and a high of 110.39 U.S. cents in November 2007. The dollar closed 2009 at 95.15 U.S. cents. From the beginning of 2010 through to December 16, trading in the Canadian dollar ranged between 92.18 and 100.69 U.S. cents. The Canadian dollar noon spot rate price on December 16, 2010 was 99.44 U.S. cents.

Exchange Rate For The Canadian Dollar

	2010 through		For the years ended December 31,
	December 16		2009	2008	2007	2006	2005	2004	2003	2002	2001	2000
	(in U.S. cents)
High		100.69	97.97	102.98	110.39	91.34	87.51	85.14	77.89	66.54	67.11	69.84
Low		92.16	76.53	76.81	84.19	84.79	78.53	71.41	63.38	61.79	62.30	63.97

Source: Bank of Canada.

Canada does not have foreign exchange controls. Foreign exchange operations conducted by the Bank of Canada on behalf of the Minister of Finance are directed toward the maintenance of orderly conditions in the foreign exchange market in Canada through the purchase or sale of United States dollars for Canadian dollars. The following table shows Canada’s official international reserves on the dates indicated.

Canada’s Official International Reserves

	At November 30,		At December 31,
	2010		2009	2008	2007	2006	2005	2004	2003	2002	2001	2000
	(in millions of U.S. dollars)
Total		56,571	54,357	43,872	41,081	35,063	33,018	34,466	36,268	37,169	34,248	32,424

Source: Department of Finance.

Canada’s official reserves at November 30, 2010 consisted of United States dollars in the amount of U.S.$26,989 million, U.S.$151 million in gold (valued at U.S.$1,384 per fine ounce), U.S.$2,735 million in the form of the reserve position in the International Monetary Fund (“IMF”), U.S.$8,970 million in Special Drawing Rights (“SDRs”) and U.S.$17,726 million in other convertible currencies.

Beginning in 1978, transactions relating to foreign currency debt undertaken for reserve management purposes have had an important effect on the level of official reserves. The “Canada Bills” program was launched in October 1986. Under this program, U.S. dollar-denominated short-term notes are issued in the United States money market. There were U.S.$1,853 million of Canada Bills outstanding on November 30, 2010. The “Canada Notes” program was launched in March 1996. Canada Notes are interest-bearing marketable notes that mature not less than nine months from their date of issue. As of November 30, 2010, there were no outstanding Canada Notes. A Euro Medium-Term Notes (EMTN) program was launched in March 1997. EMTNs are interest bearing, foreign currency medium-term notes issued outside the United States and Canada and maturities can range from short-term to long-term. As of November 30, 2010, there were no outstanding EMTNs. In January 2010, the Government issued a 10-year, Euro 2 billion euro global bond to supplement Canada’s foreign exchange reserves and meet foreign currency requirements to support lending by the International Monetary Fund. As of November 30, 2010, U.S.$3,053 million and Euro 2,000 million in foreign currency denominated bonds remained outstanding comprised of two global bond issues, and three Petro Canada bond issues assumed by the Government of Canada on February 5, 2001, on the dissolution of Petro Canada Limited.

16

GOVERNMENT FINANCES

Introduction

The financial structure of the Government of Canada rests on a constitutional and statutory framework dating back to the British North America Act, 1867. That Act, which has been renamed the Constitution Act, 1867, gave constitutional foundation to the principles of financing that are basic to responsible government, while other necessary financial administrative machinery and procedures were established by subsequent legislation, most notably the Financial Administration Act. The proclamation in 1982 of the Constitution Act, 1982 terminated British legislative jurisdiction over Canada’s Constitution in accordance with an amending formula that permits amendment of the Constitution without resorting to the Parliament of the United Kingdom.

Within the confines of the Constitution, the authority of Parliament is supreme. Ultimate control of the public purse and the financial structure of the Government rests with Parliament. This is reflected in the fundamental principles that no tax shall be imposed and no money shall be spent without the authority of Parliament, and that expenditures shall be made only for the purposes authorized by Parliament.

Public money received by the Government is deposited in the Consolidated Revenue Fund of Canada. Withdrawals of public money out of the Consolidated Revenue Fund may not be made without the authority of Parliament.

The Government has two major sources of money: budgetary revenues and borrowing. The main sources of revenue are personal and corporate income taxes, employment insurance premiums and excise taxes and duties. These revenues are authorized by specific acts passed by Parliament. The Government’s revenues also include those of consolidated Crown corporations and other entities, net gains/losses from enterprise Crown corporations (such as the Bank of Canada, Export Development Canada and the Canada Mortgage and Housing Corporation), foreign exchange revenues and other revenues (primarily revenues from the sales of goods and services). The other major source of money to finance Government operations is borrowing. Borrowing authority is established by acts of Parliament and borrowing limits are established by Orders in Council. The main sources of borrowing are marketable bonds, treasury bills and retail debt.

Parliament authorizes the disbursement of moneys out of the Consolidated Revenue Fund by means of Appropriation Acts passed on an annual basis by Parliament and based on the Main Estimates submitted by the various departments. In addition to the Appropriation Acts, authority for payments may also be found in certain statutes which authorize certain payments out of the Consolidated Revenue Fund. Expenditures for public debt charges, social security payments and transfers to other levels of government are authorized in this way. Appropriations may also be made by the Governor in Council for urgent payments. Such appropriations may be made only when Parliament is not in session and must be laid before Parliament during the subsequent session.

Information on the Government’s planned revenues and expenditures is presented to Parliament primarily in two documents: the Budget and the Main Estimates, which are both presented in the House of Commons. The Budget, which may be delivered at any time during the fiscal year, provides the occasion on which the Minister of Finance generally brings under review the whole financial position of the Government, present and prospective, and announces the Government’s plans and proposals. The Main Estimates are tabled (i.e., introduced) once each year and outline the Parliamentary authority, either existing or required, for disbursements. Supplementary Estimates may also be tabled during the year to provide authority for spending as the need arises.

The considerations for overall resource availability and demands for new policies and programs are reconciled through the establishment of five year economic and fiscal projections reflecting Government priorities. The projections are released in an Economic and Fiscal Update in the fall for pre-budget consultation purposes. To incorporate objective economic assumptions, the fiscal projection is based on the average of private sector economic forecasts.

17

For financial reporting purposes, the Government of Canada includes all departments, agencies, corporations, organizations and funds which are controlled by the Government. For financial reporting purposes, control is defined as the power to govern the financial and operating policies of an organization with benefits from the organization’s activities being expected, or the risk of loss being assumed by the Government. All organizations that are listed in the Financial Administration Act or that are Crown corporations as defined by the Financial Administration Act are included for financial reporting purposes. Other organizations not listed in the Financial Administration Act may also meet the definition of control and they are included in the Government’s reporting entity if their revenues, expenses, assets or liabilities are significant. The financial activities of all these entities are consolidated in the Government’s financial statements, except for enterprise Crown corporations and other government business enterprises, which are not dependent on the Government for financing their activities. These corporations are reported under the modified equity basis of accounting.

The primary source of information on all actual financial transactions of the Government is the Public Accounts of Canada, which is required by the Financial Administration Act to be tabled in Parliament each year. The other chief accountability reports are the statements of budgetary and non-budgetary financial transactions and of the Government’s cash and debt position published monthly in The Fiscal Monitor and in the Annual Financial Report.

The financial statements of the Government of Canada are presented on a full accrual basis of accounting, recording government revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid. The Government’s fiscal anchor is the budgetary balance, which provides the most comprehensive and up-to-date picture of the financial situation. The accumulated deficit is equal to total liabilities less total assets — both financial and non-financial. Financial assets include cash and cash equivalents, accounts receivable, foreign exchange accounts, and loans, investments and advances. Non-financial assets include tangible capital assets, such as land and buildings, inventories and prepaid expenses. The annual change in the accumulated deficit is equal to the budgetary balance plus other comprehensive income or loss. It is the accumulation of the annual surpluses and deficits in the past that represents the federal debt and is the main measure of debt. Net debt, which is a different measure of the Government’s financial position, represents total liabilities less its financial assets.

Fiscal Policy

The budgetary deficit/surplus — the budgetary balance — is the most comprehensive measure of the Government’s fiscal results. It is presented on a full accrual basis of accounting, recording government assets and liabilities when they are earned or incurred, regardless of when the cash is received or paid. In addition, the budgetary balance includes only those activities over which the Government has control for financial reporting purposes.

Between fiscal 1997-98 and fiscal 2007-2008, the Government recorded annual budgetary surpluses ranging between $1.5 billion (fiscal 2004-05) and $19.9 billion (fiscal 2000-01). The onset of the global recession in 2008 resulted in a budgetary deficit of $5.8 billion in fiscal 2008-09, followed by a budgetary deficit of $55.6 billion in fiscal 2009-10. About $21 billion of the fiscal 2009-10 deficit was attributable to actions taken under Canada’s Economic Action Plan to boost confidence and support the economy in response to the deepest global recession since the 1920s. Federal debt — the accumulation of annual deficits and surpluses since Confederation was 34.0% of GDP in fiscal 2009-10, up 5.0 percentage points from a year earlier. Despite this increase, the federal debt-to-GDP ratio stood at roughly half of its peak of 68.4% in fiscal 1995-96. Program expenses were up $36.9 billion, or 17.8%, over the prior year. As a percentage of GDP, program expenses increased to 16.0% in fiscal 2009-10, up three percentage points over fiscal 2008-09. As a percentage of revenues, public debt charges were 13.5% in fiscal 2009-10, down from a peak of 37.6% in fiscal 1990-91.

Financial requirements/source measures the difference between cash coming in to the Government and cash going out. It differs from the budgetary balance in that it includes transactions in loans, investments and advances, federal employees’ pension accounts, other specified purpose accounts, foreign exchange activities, and changes in other financial assets, liabilities and non-financial assets. These activities are included as part of non-budgetary transactions. Adjustments for the effects of non-cash items included in the budgetary balance and for accruals of past or future cash receipts or payments are also reflected in non-budgetary transactions.

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In contrast to the large financial requirements observed from the mid-1970s through to the mid-1990s, financial surpluses were recorded in ten of the eleven years between fiscal year 1997-98 to fiscal year 2007-08. The financial requirement of $90.1 billion in fiscal 2008-09 reflects the impact of the recession on the budgetary balance, the $55 billion in purchases of insured mortgage pools from Canadian lenders through the Canada Mortgage and Housing Corporation and the impact of a full year’s lending activities under the Government’s consolidated borrowing framework. In fiscal 2009-10, there was a financial requirement of $63.6 billion. The Government financed this requirement by increasing unmatured debt by $45.1 billion and decreasing its cash balances by $18.5 billion. Unmatured debt as a percentage of GDP stood at 36.6% in fiscal 2009-10, down 21.1 percentage points from the peak of 57.7% in fiscal 1995-96.

Budgetary Revenue

The Government reports revenue on an accrual basis in the period in which the event that gave rise to the revenue took place. Income tax revenue is recognized when the taxpayer has earned the income subject to tax. Personal income taxes accounted for about 48% and corporate income taxes accounted for about 14% of Government revenue in fiscal 2009-10.

There are currently four federal income tax brackets for individuals: 15%, 22%, 26% and 29%. For 2010, the taxable income thresholds at which these brackets apply, indexed annually to account for inflation, are as follows: 15% on taxable income up to $40,970, 22% on taxable income over $40,970 and up to $81,941, 26% on taxable income over $81,941 and up to $127,021 and 29% on taxable income above $127,021.

The general federal corporate income tax rate in 2010 is 18%. This general rate is scheduled to fall to 16.5% in 2011 and 15% in 2012. The small business deduction reduces the federal corporate income tax rate applied to the first $500,000 of qualifying active business income of a Canadian-controlled private corporation to 11%.

Capital gains are taxed at a preferred income tax rate under which only one-half of a realized gain is included in income, and then subject to tax at the applicable personal or corporate income tax rate.

The federal Goods and Service Tax (GST) is a broad-based value-added tax, which is applied to the sale of most goods and services at a rate of 5% for 2010. Food for home consumption, prescription drugs, residential rents, sales of existing houses and educational and healthcare services are generally not subject to tax.

Federal excise taxes and duties are imposed on selected goods, including motive fuels, tobacco and alcohol. Customs duties are imposed on a wide range of goods.

In addition, the Government obtains non-tax revenues in the form of revenues from consolidated Crown corporations and other entities, net gains/losses from enterprise Crown corporations (such as the Bank of Canada, Export Development Canada and the Canada Mortgage and Housing Corporation), foreign exchange revenues, employment insurance premium revenues and other revenues (primarily from the sale of goods and services).

Budgetary Expenses

Budgetary expenses encompass the cost of servicing the public debt, the operating expenses of Government departments and agencies, grants and contributions to other levels of government, organizations and individuals, and subsidies. Under full accrual accounting, the cost of using capital assets is amortized over its estimated useful life.

Transfer payments includes a range of federal social spending programs designed to enhance the quality of life of Canadians, particularly those who have modest incomes or who are disadvantaged. It includes income support — most notably for the elderly and unemployed; transfers to the provinces for health, education and social assistance; and programs for aboriginal Canadians.

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The following table sets forth budgetary revenues, budgetary expenses, annual surplus and accumulated deficit for the years shown.

Detailed Statement of Operations and Accumulated Deficit

	For the years ended March 31,
	2010		2009		2008		2007		2006
	(in millions of dollars)
Revenues
Tax Revenues
Income tax revenues
Personal		103,947		116,024		113,063		110,477		103,691
Corporate		30,361		29,476		40,628		37,745		31,724
Non-resident		5,293		6,298		5,693		4,877		4,529
		139,601		151,798		159,384		153,099		139,944
Other taxes and duties
Goods and services tax		26,947		25,740		29,920		31,296		33,020
Energy taxes		5,178		5,161		5,139		5,128		5,076
Customs import duties		3,490		4,036		3,903		3,704		3,330
Other excise taxes & duties		4,958		4,869		5,245		5,189		4,730
		40,573		39,806		44,207		45,317		46,156
Total tax revenues		180,174		191,604		203,591		198,416		186,100
Employment Insurance Premiums		16,761		16,887		16,558		16,789		16,535
Other Revenues
Crown corporations		7,622		7,760		6,504		7,503		7,198
Other programs		12,396		15,105		13,895		11,544		10,356
Net foreign exchange		1,647		1,736		1,872		1,714		2,014
Total other revenues		21,665		24,601		22,271		20,761		19,568
Total Revenues		218,600		233,092		242,420		235,966		222,203
Expenses
Transfer Payments
Old age security benefits, GIS1 and spouse’s allowance		34,653		33,377		31,955		30,284		28,992
Major transfer payments to other levels of government
Canada health transfer		24,820		22,759		21,474		20,140		19,000
Canada social transfer		10,858		10,568		9,872		8,500		8,225
Fiscal arrangements		16,193		15,138		14,570		13,033		12,381
Alternative payments for standing programs		−2,703		−2,974		−2,720		−3,177		−2,731
Other major transfers		7,822		1,024		2,956		4,018		3,940
		56,990		46,515		46,152		42,514		40,815
Employment insurance benefits		21,586		16,308		14,298		14,084		14,417
Children’s benefits		12,340		11,901		11,894		11,214		9,200
Other transfer payments		39,982		30,192		27,032		26,844		24,893
Total transfer payments		165,461		138,293		131,331		124,940		118,317
Other program expenses
Crown corporations		10,428		8,066		7,340		7,211		7,195
Ministries		68,895		61,498		60,827		56,118		49,701
Total other program expenses		79,323		69,564		68,167		63,329		56,896
Total program expenses		244,784		207,857		199,498		188,269		175,213
Public Debt Charges		29,414		30,990		33,325		33,945		33,772
Total Expenses		274,198		238,847		232,823		222,214		208,985
Annual Surplus or Deficit (−)		−55,598		−5,755		9,597		13,752		13,218
Accumulated Deficit at Beginning of Year		463,710		457,637		467,268		481,499		494,717
Other Comprehensive Income or Loss (−)		211		−318		34		479		—
Accumulated Deficit at End of Year		519,097		463,710		457,637		467,268		481,499

Source: Public Accounts of Canada 2010.

(1) Guaranteed income supplement

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Loans, Investments and Advances

The Government’s financial assets include loans and advances to, or investments in, its enterprise Crown corporations, other governments and other individuals and organizations.

Loans, investments and advances by the Government resulted in a net requirement of funds of $27.6 billion in fiscal 2009-10.

Pension and Other Future Benefits

Public Sector Pensions. The Government is responsible for defined benefit pension plans covering substantially all of its full-time employees (including the Public Service, Canadian Forces, Royal Canadian Mounted Police and certain Crown corporations) as well as federally appointed judges and Members of Parliament. Pension benefits are generally calculated by reference to the highest earnings for a specific period of time. They are related to years of service and are indexed to inflation. Until March 31, 2000, separate market invested funds were not set aside to provide for payment of these pension benefits. Beginning on April 1, 2000, new employer and employee contributions to the pension plans are transferred to the Public Sector Pension Investment Board. Its goal is to achieve maximum rates of return on investments without undue risk, while respecting the requirements and financial obligations of each of the public sector pension plans. At March 31, 2010, the net liability in respect of these accounts totalled $142.8 billion. This net liability is comprised of the accrued benefit obligation determined as of March 31, 2010, which amounted to $201.4 billion, less pension plan assets of $45.4 billion and unamortized pension adjustments of −$13.2 billion. In fiscal 2009-10 the net liability to the public sector pensions increased by $2.9 billion.

Other Employee and Veteran Future Benefits. The Government also sponsors a variety of other future benefit plans from which employees and other former employees can benefit, during or after employment or upon retirement. The cost of these benefits can accrue either during the service life of employees or upon occurrence of an event giving rise to the liability under the terms of the plans. The Government is liable for future payments for disability and other benefits paid to war veterans, as well as Canadian Forces retired veterans and still-serving members, their beneficiaries and dependants. Other significant benefits for which the Government is liable include the health care and dental plans available to retired employees and their dependants, severance benefits and workers’ compensation benefits. All these plans are unfunded. The health care and dental plans are contributory plans.

Other Liabilities

Other Liabilities.  The Government acts as an insurer and/or administrator of a number of annuities and deposit and trust accounts, as well as specified purpose accounts. The balance outstanding of these accounts amounted to $6.6 billion at March 31, 2010.

Canada Pension Plan Liability. The Canada Pension Plan (the “Plan”) was established in 1965 and is a federal-provincial program for compulsory and contributory social insurance. It operates in all parts of Canada, except for Quebec which has a comparable program. The Government administers the Plan under joint control with the participating provinces. Until 1997, the Plan was financed on an essentially pay-as-you-go basis, which means that pensions and benefits were paid out of current contributions (with some interest earned by the Canada Pension Plan Investment Fund). In December 1997, the Government passed legislation to ensure that the Plan remains sustainable over the long term and to allow fuller funding. Changes included a more rapid increase in contribution rates, a new investment policy, as well as changes to calculations of, and eligibility criteria to, some benefits. Under the new investment policy which came into effect April 1, 1998, the Plan’s funds are prudently invested by an independent CPP Investment Board in a diversified portfolio of securities, including equities, under generally the same rules that apply to other private and public pension funds.

Contributions are paid equally by employers and employees and self-employed workers pay the full amount. The Plan is funded on a steady-state basis with contributions at 9.9% of pensionable earnings. As administrator, the Government’s authority to spend is limited to the Plan’s net assets of $131.4 billion at March 31, 2010 ($110.0 billion at March 31, 2009). Of these assets, $103.1 billion was transferred to the Canada Pension

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Plan Investment Board and $0.2 billion was a direct liability of the Government. The balance of $28.2 billion represents net income from operations receivables and unrealized gains.

Non-Financial Assets

Non-financial assets include the net book value of the Government’s capital assets. Capital assets include land, buildings, works and infrastructure such as roads and bridges, machinery and equipment, ships, aircraft and other vehicles. Non-financial assets also include inventories and prepaid expenses. Non-financial assets increased by $1.9 billion to $63.4 billion in fiscal 2009-10 from $61.5 billion in fiscal 2008-09.

Other Transactions

This category includes tax receivables, other receivables, the provincial and territorial tax collection agreements account, tax payables and other liabilities. These transactions, due to their nature, are subject to wide fluctuations. They were a source of $8.9 billion in fiscal 2009-10 and a requirement of $2.5 billion in fiscal 2008-09.

Foreign Exchange Transactions

Foreign exchange transactions represent all transactions in international reserves held in the Exchange Fund Account (“EFA”). The objectives of the EFA are to provide general foreign currency liquidity for the Government and promote orderly conditions in the foreign exchange market. The EFA includes foreign currency investments, gold holdings and assets related to Canada’s commitment to the International Monetary Fund.

Subsequent Event

On November 1, 2010 General Motors completed a three-for-one stock split which resulted in the Government of Canada owning approximately 175 million common shares. Following the stock split and in conjunction with the automaker’s initial public offering on November 18, 2010, the Government of Canada sold approximately 35 million shares at approximately US$33 per share. The resulting impact of the disposition of shares, excluding selling costs and net of Ontario’s one-third participation interest, is a gain of approximately $0.4 billion. The impact of this transaction will be reflected in the 2010-2011 financial statements.

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Detailed Statement of Non-Budgetary Transactions, Non-Financial Assets and
Foreign Exchange Transactions

	For the years ended March 31
	2010		2009		2008		2007		2006
	(in millions)
Loans, Investments and Advances
Enterprise Crown corporations and other government business enterprises
Loans and advances
Canada Mortgage and Housing Corporation		−10,399		−57,470		258		148		200
Business Development Bank of Canada		−4,961		−6,284		−1,000		—		—
Farm Credit Canada		−4,481		−7,610		−3,840		—		—
Other		7		−5		−35		33		−67
		−19,834		−71,369		−4,617		181		133
Investments
Share of annual profit		−2,306		−4,773		−4,256		−5,336		−5,041
Other comprehensive income (−) or loss		−211		318		−34		−479
Dividends		1,391		2,095		2,436		2,604		2,027
Capital		−4,617		−600		—		−3		−15
		−5,743		−2,960		−1,854		−3,214		−3,029
Total		−25,577		−74,329		−6,471		−3,033		−2,896
Less:
Amount expected to be repaid from future appropriations		−103		−473		32		66		63
Unamortized discounts and premiums		—		26		−19		—		—
Total		−25,474		−73,882		−6,484		−3,099		−2,959
Other loans, investments and advances
Portfolio investments		2		6		—		—		−101
National governments, including developing countries		235		−182		143		80		158
International organizations		−454		−905		−321		−491		−224
Provincial and territorial governments		590		217		899		285		14
Other loans, investments and advances		−4,926		−1,005		−410		−367		−1,524
Total		−4,553		−1,869		311		−493		−1,677
Less: allowance for valuation		−2,440		−1,527		−398		−387		−915
Total		−2,113		−342		709		−106		−762
Total loans, investments & advances		−27,587		−74,224		−5,775		−3,205		−3,721
Pensions and Other Future Benefits
Public sector pensions		2,934		2,538		2,645		3,664		1,483
Other employee and veteran future benefits		3,916		2,410		2,778		1,754		1,820
Total pension and other future benefits		6,850		4,948		5,423		5,418		3,303
Other Liabilities
Due to Canada Pension Plan		85		−16		52		−97		−2,620
Other liabilities		579		44		632		−185		−567
Total other liabilities		664		28		684		−282		−3,187
Non-Financial Assets
Tangible capital assets		−1,728		−2,152		−2,139		−681		−145
Inventories		156		−100		−260		−113		−350
Prepaid expenses		−300		−608		392		−396		−82
Total non-financial assets		−1,872		−2,860		−2,007		−1,190		−577
Other Transactions
Tax receivables		2,848		−6,009		590		−7,379		−5,636
Other accounts receivable		−441		−3		151		−817		−327
Provincial and territorial tax collection agreements account		1,438		−168		−1,311		410		2,316
Tax payables		−2,594		1,835		7,622		2,986		2,752
Other liabilities		7,682		1,869		−2,359		1,683		−1,376
Total other transactions		8,933		−2,476		4,693		−3,117		−2,271
Foreign Exchange Accounts
International reserves held in the Exchange Fund Account		−2,507		−8,290		1,769		−3,737		−1,822
International Monetary Fund — Subscriptions		2,188		−1,259		354		−433		567
International Monetary Fund — Loans		−337		—		—		—		—
		−656		−9,549		2,123		−4,170		−1,255
Less: International Monetary Fund — Notes payable		2,351		14		201		−771		−1,412
Special drawing rights allocations		−7,766		−154		43		−48		113
		−5,415		−140		244		−819		−1,299
Total foreign exchange accounts		4,759		−9,409		1,879		−3,351		44

Source: Public Accounts of Canada 2010.

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Unmatured Market Debt

The Government’s unmatured market debt represents financial obligations resulting from the sale of marketable bonds, treasury bills, Canada Savings Bonds, Canada Premium Bonds, Canada Investment Bonds, Canada Bills and Canada Notes, as well as from non-marketable obligations issued to the Canada Pension Plan Investment Fund.

Borrowing is one of the two major sources of money available to the Government to finance its operations. The changes in unmatured market debt payable in Canadian currency have been broadly consistent with changes in financial requirements. The changes in unmatured market debt payable in foreign currency have been associated with developments in foreign exchange markets and related requirements to supplement foreign exchange reserves through foreign borrowing.

Unmatured Market Debt

(Principal Amount Outstanding)

	At Sept. 30,		At March 31,
	2010		2010		2009		2008		2007		2006
	(in millions)
Canadian Currency
Marketable bonds		392,283		368,013	$	295,322	$	253,802	$	257,909	$	261,872
Treasury bills		170,700		175,900		192,500		117,000		134,100		131,600
Canada Savings Bonds		6,597		6,862		7,332		7,442		8,764		10,506
Canada Premium Bonds		4,922		4,993		5,199		5,626		6,410		6,828
Canada Investment Bonds		—		—		—		—		1		8
Obligations issued to Canada Pension Plan Investment Fund		62		452		523		1,042		1,742		3,094
Obligations issued to Trustees in respect of Health Care Initiatives		—		—		—		—		—		8
Total Canadian currency		574,564		556,220		500,876		384,912		408,926		413,916
Foreign Currency (1)
Canada Bills		2,562		2,453		8,708		1,484		1,847		4,734
Canada Notes		—		—		—		515		490		496
Euro Medium-Term Note Program		—		—		1,676		1,621		1,626		1,500
Other marketable bonds (2)		5,947		5,845		265		6,097		6,697		7,588
Total foreign currency		8,509		8,298		10,649		9,717		10,660		14,318
Total Unmatured Market Debt		583,073		564,518	$	511,525	$	394,629	$	419,586	$	428,234

Source: Bank of Canada, Department of Finance.

Note: Amounts may not add due to rounding.

(1) Foreign currency debt is converted to Canadian dollars using the following closing exchange rate levels:

	At Sept. 30,		At March 31,
	2010		2010		2009		2008		2007		2006
United States Dollar		1.0290		1.0158		1.2613		1.0265		1.1546		1.1680
Euro		1.4029		1.3720		1.6755		1.6205		1.5424		1.4153
Japanese Yen		—				—		0.010300		0.009799		0.009923
New Zealand Dollar		—		—		—		—		0.8248		0.7192

(2)  Excludes Canada Notes and Euro Medium-Term Notes. Other global foreign currency marketable bonds are comprised of the following amounts (before conversion to Canadian dollars):

	At Sept. 30,		At March 31,
	2010		2010		2009		2008		2007		2006
	(in millions)
United States Dollars		3,053		3,053		211		2,711		2,711		3,711
Euro		2,000		2,000		—		2,045		2,045		2,045
New Zealand Dollars		—		—		—		—		500		500

Total Canadian currency unmatured market debt was $574,564 million on September 30, 2010, an increase of $18,344 million from March 31, 2010. The increase stemmed from an increase in marketable bonds ($24,270 million), partially offset by a reduction in Treasury Bills (–$5,200 million) and obligations issued to Canada Pension Plan Investment Fund (–$390 million). Marketable bonds are interest-bearing obligations

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generally available to all investors. In the period April 1, 2010 to September 30, 2010, the Government issued an aggregate of $49,574 million of marketable bonds in Canadian currency and redeemed $25,824 million (including $11,365 million in repurchased and cancelled bonds), for a net increase of $23,749 million. This was further increased by $520 million for the inflation compensation on Real Return Bonds, resulting in a net increase of $24,270 million in marketable bonds. Treasury bills are obligations issued at a discount with maturities generally of three months, six months and one year. In the period April 1, 2010 to September 30, 2010, the amount of treasury bills outstanding decreased by $5,200 million. Canada Savings Bonds are offered to individual Canadian residents and differ from other bonds in that they can be redeemed prior to maturity at the option of the holder for the full face value, plus accrued interest. In the period April 1, 2010 to September 30, 2010, the amount of unmatured Canada Savings Bonds outstanding decreased by $265 million. Canada Premium Bonds are a retail investment and savings product introduced in 1998 that replaced the Canada Registered Retirement Savings Plan Bonds (“Canada RRSP Bonds”). They offer a higher interest rate compared to Canada Savings Bonds and are redeemable once a year, on the anniversary of the issue date and during the 30 days thereafter without penalty. In the period April 1, 2010 to September 30, 2010, the amount of unmatured Canada Premium Bonds outstanding decreased by $71 million. Canada Investment Bonds, piloted through investment dealers from November 1, 2003 to April 1, 2004, were discontinued. They offer a fixed rate of interest for the full term to maturity. The Canada Investment Bonds carry a higher rate of interest than the Canada Savings Bonds or the Canada Premium Bonds over the equivalent priced period. They are non-cashable prior to maturity but are transferable to other eligible registration types. In the period November 1, 2006 to April 30, 2007, all of the Canada Investment Bonds matured bringing the outstanding balance to nil. Obligations issued to Canada Pension Plan Investment Fund are non-marketable.

Total foreign currency unmatured market debt was $8,509 million on September 30, 2010, an increase of $211 million from March 31, 2010. Canada Bills are short-term U.S. dollar-denominated unsecured obligations issued in the U.S. money market with a term to maturity of not more than 270 days. Canada Notes are usually U.S. dollar-denominated interest-bearing marketable notes that mature not less than nine months from their date of issue. The Euro Medium Term Notes are medium-term notes issued outside the United States and Canada. Notes issued under this program can be denominated in a range of currencies and structured to meet investor demand. The other marketable bonds are comprised of two global bond issues and three Petro Canada bond issues assumed by the Government of Canada on February 5, 2001, on the dissolution of Petro Canada Limited in U.S. dollars and other foreign currencies.

In 1996, Canada implemented the EFA foreign currency swap program. Under these foreign exchange swaps, Canadian dollar liabilities are swapped into liabilities in foreign currencies, allowing Canada to raise foreign exchange reserves cost effectively. As of September 30, 2010, $26,266 million of Canadian dollars have been swapped for U.S.$22,758 million, $15,993 million of Canadian dollars have been swapped for Euro 10,890 million and $247 million Canadian dollars have been swapped for ¥20 billion.

The average rates of interest paid on the unmatured debt outstanding by instrument are set out below.

Average Rates of Interest

	At March 31,
	2010			2009			2008			2007			2006
Marketable bonds (1)		3.85	%		4.53	%		5.08	%		5.23	%		5.26	%
Treasury bills		0.40			1.34			3.60			4.20			3.52
Retail Debt		1.32			2.32			3.50			3.54			3.84
Non-marketable bonds and notes (2)		11.19			11.03			10.62			10.37			10.02
Canada Bills		0.13			0.64			2.59			5.11			4.63
Foreign currency notes		—			4.50			3.87			3.92			3.85
Total Unmatured Debt		2.71			3.21			4.61			4.86			4.73

Source: Public Accounts of Canada 2010.

(1) Excludes Canada Notes and Euro Medium-Term Notes, but includes other foreign currency marketable bonds.

(2) Includes the bonds for the Canada Pension Plan and Obligations issued to Trustees in respect of Health Care Initiatives.

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The following table shows the scheduled repayments in respect of principal and interest on the marketable bonds and notes outstanding at September 30, 2010.

Schedule of Marketable Bond and Note Repayments
(in millions)

	Total Principal and Interest(1)
	Canadian		Foreign
For years ended	Currency		Currency
December 31,	Debt(2)		Debt (3) (4)
2010		—		—
2011		52,818		172
2012		78,544		172
2013		53,130		172
2014		48,797		3,259
2015-2019		118,619		491
2020-2024		53,272		2,904
2025-2029		45,988		—
2030-2034		30,588		—
2035-2039		25,787		—
2040-2044		24,425		—

Source: Bank of Canada.

(1) Excludes the effect of interest rate swaps and cross currency swaps.

(2) Only includes domestic marketable bonds, excluding inflation compensation component on Real Return Bonds.

(3) Converted at USD 1.00 = CAD 1.029, EUR 1.00 = CAD 1.4029; the closing rates on September 30, 2010.

(4) Excludes principal and interest payments on U.S.$52,824,000 of Petro Canada bond issues assumed by the Government of Canada on February 5, 2001, on the dissolution of Petro Canada Limited.

Crown Corporations

Except for enterprise Crown corporations and other government business enterprises, which are reported under the modified equity basis of accounting, all Government organizations are consolidated in the financial statements. Only certain financial transactions between the Government and enterprise Crown corporations are recorded.

The payment of all money borrowed by agent Crown corporations is a charge on and payable out of the Consolidated Revenue Fund. Such borrowings constitute unconditional obligations of the Government and are recorded as such in the accounts of Canada, net of borrowings expected to be repaid directly by these corporations. Borrowings expected to be repaid by enterprise Crown corporations and other government business enterprises amounted to $213,415 million as at March 31, 2010. Since fiscal 2007-08, the Government has met all of the borrowing needs of the Business Development Bank of Canada, Canada Mortgage and Housing Corporation and Farm Credit Canada through direct lending. The following table summarizes the unaudited financial information of consolidated Crown corporations, other entities and enterprise Crown corporations as at March 31, 2010.

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Financial Information Regarding Crown Corporations and Other Entities

(in millions)

			Other
	Consolidated		Entities		Enterprise		Total
Assets
Total assets	$	7,272	$	2,916	$	436,351	$	446,539
Liabilities
Liabilities to other than Government
Borrowings		13		—		213,465		213,478
Other		6,372		15		76,924		83,311
		6,385		15		290,389		296,789
Net assets	$	887	$	2,901	$	145,962	$	149,750
Financial interest of the Government
Obligations to the Government	$	215	$	−1	$	115,051	$	115,265
Net equity of the Government		672		2,902		30,911		34,485
Total financial interest	$	887	$	2,901	$	145,962	$	149,750
Contingent liabilities	$	495		—	$	3,531	$	4,026

Source: Public Accounts of Canada 2010.

Contingent Liabilities (with Respect to Guarantees by the Government)

The contingent liabilities of the Government with respect to guarantees by the Government as at March 31, 2010 are summarized as follows.

Contingent Liabilities (With Respect To Net Exposure Under Guarantees)

(in millions)

Guarantees by the Government
Borrowings by enterprise Crown corporations which are agents of Her Majesty	$	211,454
Borrowings by other than enterprise Crown corporations
From agents		1,220
From other than agents		1,638
Other explicit loan guarantees		25
Insurance programs of the Government		1,106
Other explicit guarantees		6,536
Total gross guarantees		221,979
Less: allowance for losses		–535
Net exposure under guarantees	$	221,444

Source: Public Accounts of Canada 2010.

Note: Amounts may not add due to rounding.

Insurance Programs

Certain agent enterprise Crown corporations operate insurance programs. In the event that such corporations have insufficient funds to meet their obligations, the Government would provide the required financing through appropriations, either budgetary or non-budgetary.

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The following table summarizes the unaudited information regarding such insurance programs as at March 31, 2010.

Agent Enterprise Crown Corporations Insurance Programs

					5-year		Closing
					average		balance
	Insurance		Net		of net		of
	in force		claims (1)		claims		fund
	(in millions)
Canada Deposit Insurance Corporation	$	590,013	$	—	$	—	$	857
Canada Mortgage and Housing Corporation
Mortgage Insurance Fund		482,328		569		311		8,200
Mortgage-Backed Securities Guarantee Fund		302,444		—		—		977
Export Development Canada
Export insurance contracts entered into on its own behalf		21,427		226		79		—

Source: Public Accounts of Canada 2010.

(1) Refers to the difference between claims and amounts received from sales of related assets and other recoveries.

DEBT RECORD

Canada has always paid the full face amount of the principal and interest on every direct obligation issued by it and every indirect obligation on which it has been required to implement its guarantee, promptly when due. During war, where such payment would have violated laws or regulations forbidding trading with the enemy, payment was made to a custodian of enemy property.

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MONETARY AND BANKING SYSTEM

Bank of Canada

The Bank of Canada (the “Bank”) was incorporated in 1934 under the Bank of Canada Act (in this section referred to as the “Act”) as Canada’s central bank. All of the capital stock of the Bank is owned by the Government. The Act gives the Bank the responsibility for the conduct of monetary policy and confers specific powers for discharging that responsibility.

The Bank has the sole right to issue notes for circulation in Canada. The Bank acts as the fiscal agent of the Government of Canada and, in this role, the Bank participates in the management of the public debt. Specifically, the Bank is responsible for handling the Government’s new market debt borrowings, administering its outstanding market debt and making payments for interest and market debt redemption on its behalf.

The Bank may buy or sell various types of securities, including securities issued or guaranteed by Canada or any province, securities issued or guaranteed by the Government of the United States of America or Japan or the government of a country in the European Union. For purposes of conducting monetary policy or promoting the stability of the Canadian financial system, the Bank may buy or sell from or to any person securities and any other financial instruments other than instruments that evidence an ownership interest or right in or to an entity, that comply with the policy established by the Governor and published in the Canada Gazette. The Bank may buy and sell foreign currencies, SDRs issued by the IMF, coin and gold and silver bullion. The Bank may open accounts with other central banks, at the Bank for International Settlements (“BIS”) and at commercial banks. The Bank may accept deposits from the Government or any of its corporations or agencies, any province, any chartered bank or any member of the Canadian Payments Association. The Bank pays interest to the Government on deposits held at the Bank and may pay interest to member institutions of the Canadian Payments Association on deposits accepted for certain specified purposes. It may also accept deposits from other central banks and official international financial organizations and may pay interest on such deposits. The Bank does not accept deposits from individuals nor does it compete with the chartered banks in the commercial banking field. The Bank is not required to maintain gold or foreign exchange reserves against its liabilities.

The Bank may, on the pledge of certain classes of securities or property, make loans or advances for periods not exceeding six months to chartered banks, and to any other members of the Canadian Payments Association. The Bank Rate is the minimum rate at which the Bank is prepared to make loans or advances. Although the Bank has the power to make loans or advances under certain conditions and for limited periods to the Government or any province, such loans are extremely rare and no such loans have been made in over 35 years.

The framework for the implementation of monetary policy by the Bank was changed considerably on two occasions during the 1990s, first as a result of the phased elimination of reserve requirements between June 1992 and July 1994, and second, with the introduction of a real-time large-value settlement system (the “Large Value Transfer System” or “LVTS”) in February 1999.

The central mechanisms through which the Bank currently implements monetary policy are the LVTS and a 50-basis-point operating band for the overnight interest rate adopted by the Bank in mid 1994. Currently, the Bank targets the level of excess settlement balances in the LVTS at a minimum of $25 million. Any participant in the LVTS with a deficit funds position should therefore be aware that there will be one or more participants with offsetting surplus positions that are potential counterparties for transactions at market rates. The Bank encourages these transactions by paying an interest rate on positive balances held overnight by LVTS participants at the lower limit of its operating band and charging an interest rate on overdraft loans to LVTS participants at the upper limit of the band (which is also the Bank Rate). Thus the overnight rate should stay within the operating band since participants are aware that they can earn at least the lower limit of the band on positive balances and need not pay more than the upper limit to cover shortfalls. Moreover, the Bank is prepared to enter into overnight buyback transactions to reinforce its target rate at the midpoint of the operating band. Through its influence on the interest rate for overnight funds, the Bank is able to influence other short-term interest rates, the exchange rate, aggregate demand and, ultimately, inflation.

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The Bank controls the level of LVTS settlement balances available to the financial system by adjusting the level of Government deposits held at financial institutions through twice-daily auctions of Government cash balances.

The Act provides for regular consultation between the Governor of the Bank and the Minister of Finance as well as for a formal procedure whereby, in the event of a disagreement between the Government and the Bank which cannot be resolved, the Government may issue a directive to the Bank as to the monetary policy that it is to follow. The directive must be in writing, in specific terms, applicable for a specified period and published forthwith. This provision in the Act makes it clear that the Government must take the ultimate responsibility for monetary policy, but the Bank is in no way relieved of its responsibility for monetary policy and its execution so long as a directive is not in effect. No directive has ever been issued.

The Payment Clearing and Settlement Act, 1996 gives the Bank formal responsibility for the regulatory oversight of major clearing and settlement systems. Specifically, the Bank will review all eligible systems and identify their potential to cause systemic risk. Systems with this potential are subject to designation under the Payment Clearing and Settlement Act, 1996. Designated systems will have to satisfy the Bank that they have appropriate risk-control mechanisms in place. The Bank may carry out examinations and, in situations where it is judged that systemic risk is being inadequately controlled, the Governor of the Bank may issue directives to a designated system.

The Payment Clearing and Settlement Act, 1996 also gives the Bank new powers to provide certain services. In particular, the Bank can provide a guarantee of settlement to the participants of designated systems.

Other Government Financial Institutions

Export Development Canada (“EDC”) was established on October 1, 1969 for the purpose of facilitating and developing trade between Canada and other countries. EDC is the successor to the Export Credits Insurance Corporation which commenced operations in 1944. Activities were originally limited to insuring Canadian exporters against non-payment of credits extended to foreign buyers. To further enhance Canada’s growing export trade, EDC has introduced an export loans program, a foreign investment guarantees program and a surety risk protection insurance program. The Federal Business Development Bank was established in 1975 as the successor to the Industrial Development Bank which was established in 1944 as a subsidiary of the Bank of Canada. In 1995, the Federal Business Development Bank was continued as the Business Development Bank of Canada (“BDC”). The purpose of the BDC is to provide financial and management services to small and medium-sized businesses in Canada. The Canada Deposit Insurance Corporation, established in 1967, insures deposits payable in Canada and in Canadian currency at banks and other financial institutions up to $100,000 per depositor. Farm Credit Canada, established in 1959, provides financial and management services to farms and agrifood businesses. The Canada Mortgage and Housing Corporation (formerly the Central Mortgage and Housing Corporation) was incorporated in 1945 to insure mortgage loans made by approved lenders and to make direct mortgage loans.

Chartered Banks

Canada’s banks are all federally incorporated and are regulated under the Bank Act. The Bank Act sets out the rules for the structure and operation of these institutions. It is the current practice in Canada to revise the Bank Act after intervals of approximately five years with the most recent revisions being implemented in April 2007. The Office of the Superintendent of Financial Institutions is the federal agency responsible for supervising banks.

Under the Bank Act, foreign banks are permitted to incorporate subsidiaries by letters patent. In June 1999, legislation was passed to allow foreign banks to establish specialized, commercially focused branches in Canada. Foreign banks can operate full-service branches and lending branches. As at November 25, 2010, the banking system consisted of 21 domestic banks, 25 foreign bank subsidiaries, 22 full-service foreign bank branches and 7 foreign bank lending branches.

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Financial Sector Restructuring

The Government of Canada is responsible for ensuring the financial sector regulatory framework operates efficiently and effectively for consumers and businesses while maintaining the safety of institutions and soundness of the sector. The mandatory five-year review of the financial institutions statutes, which comprises the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act and the Cooperative Credit Associations Act, ensures Canada remains a global leader in financial services. This practice sets Canada apart from virtually every other country in the world. Canada launched the most recent five-year review on September 20, 2010, and it is expected that the review will be fine tuning in scope.

Budget 2010 announced initiatives to strengthen Canada’s financial system and modernize the regulatory framework going forward, including a framework to enable credit unions to incorporate and continue federally, which will promote the continued growth and competitiveness of the sector and enhance financial stability.

To reinforce financial soundness, Canada is working with 10 willing provinces and territories to establish a Canadian Securities Regulatory Authority (CSRA) by mid-2012. The CSRA, operating under a single Securities Act, would improve regulatory transparency over the current regime by which securities are regulated by 10 different provinces and 3 territories, meaning Canada has 13 securities regulators, with 13 sets of laws and 13 sets of fees. The CSRA would provide better and more consistent protection for investors across Canada, and simpler processes for business, resulting in lower costs for investors. On May 26, 2010, the Government’s proposed Canadian Securities Act was tabled for information in Parliament and concurrently, the Government referred the proposed Act to the Supreme Court of Canada, as part of a constitutional reference, for its opinion as to whether it is within the legislative authority of Parliament. Given that provinces and territories currently regulate securities, the objective of the constitutional reference is to provide legal certainty to all market participants, provinces and territories that Parliament has legislative authority under the Constitution to regulate securities.

Monetary Policy and Interest Rate Developments

The ultimate objective of Canadian monetary policy is to promote good overall economic performance through price stability.

In February 1991, the Government and the Bank jointly announced a series of targets for reducing total CPI inflation to the mid-point of a range of 1% to 3% by the end of 1995. This inflation-control target range has been extended a number of times. In November 2006, the Government and the Bank renewed Canada’s inflation-control framework for a further five-year period. Monetary policy will continue to aim at keeping inflation at the 2% target mid-point, both to maximize the likelihood that inflation stays within the target range and to increase the predictability of inflation over the longer term.

The policy instrument the Bank uses to influence monetary conditions is the overnight rate target, which is the mid-point of the Bank’s operating band for overnight financing. The Bank constantly reassesses the level of the overnight rate target necessary to achieve the inflation-control targets.

Since November 2000, the Bank has moved to fixed announcement dates for the overnight rate target to make monetary policy more effective. Fixed dates have reduced the uncertainty in financial markets associated with not knowing exactly when changes in the overnight rate target may be announced, and contributed to the improved functioning of financial markets. Fixed dates have provided a regular opportunity to emphasize the medium-term perspective of monetary policy and increased the Bank’s transparency, accountability and dialogue with the public.

Since the start of the financial crisis in the second half of 2007 until December 2007, the Bank of Canada undertook a series of interest rate cuts that reduced the overnight lending rate from 4.50 per cent in December 2007 to 1.50 per cent in December 2008. As the financial crisis intensified and spilled over into real economic activity, with eroding foreign and domestic demand and most major advanced economies in recession, the Bank of Canada further reduced its overnight target rate by a cumulative 125 basis points to 0.25 per cent from January to April 2009. Furthermore, in its April 21st announcement, the Bank of Canada for the first time iterated a conditional commitment to maintain the target overnight rate at the effective lower bound of 0.25 per cent until the end of the second quarter of 2010. As expected, the overnight rate target remained unchanged at the effective lower bound of 0.25 percent for the remainder of 2009 as well as the beginning of 2010. Strong growth

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during the second half of 2009 and the first quarter of 2010 indicated that the Canadian recovery was on track and on June 1, 2010 the Bank of Canada announced an increase of 25 basis points in the overnight rate, raising the target to 0.5 percent. With employment and output levels approaching pre-recession peaks, the Bank announced further 25 basis point increases on the July 20, 2010 and September 8, 2010 fixed announcement dates, effectively setting the overnight rate target at 1 percent; as of the December 7, 2010 announcement, the overnight rate target remains at 1 percent.

Following the latest release of the Monetary Policy Report on October 20, 2010, the Bank maintains that the economy is exceptionally stimulated even after the rate hikes, but acknowledges that future interest rate decisions must be made considering the uncertainty surrounding global economic activity.

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Membership in International Economic Organizations

As of December 31, 2009, Canada’s paid-up quota in the IMF is SDR 6,369.2 million. On December 31, 2009, one SDR equalled Cdn $1.46.

Canada also participates in the General Arrangements to Borrow (the “GAB”) and the New Arrangements to Borrow (the “NAB”) which provide special financial resources to the IMF. Canada’s total commitment under the GAB and the NAB amount to SDR 1,396.0 million. As of December 31, 2009, there were no loans outstanding to the IMF under the GAB and the NAB. Additionally, on July 6th, 2009, Canada entered into a two year, US$10 billion, temporary borrowing agreement with the IMF to bolster its lending resources. This credit line provides additional liquidity to the IMF, as needed. The credit line was first drawn on in July 2009.

Canada is also a member of the Organization for Economic Cooperation and Development, a party to the World Trade Organization and a shareholder (through the Bank) of the BIS. Canada’s participation in other international development institutions is summarized in the table below.

Participation In Other International Development Institutions

	At December 31, 2009
	Subscription
	Total		Paid-in(1)
	(in millions of
	U.S. dollars)
International Bank for Reconstruction and Development	$	5,403.8	$	334.9
International Development Association (“IDA”)		—		—
International Finance Corporation		81.3		81.3
Multilateral Investment Guarantee Agency		56.5		10.7
Asian Development Bank		2,891.0		202.5
Inter-American Development Bank		8,079.8		173.7
Caribbean Development Bank		62.7		13.7
African Development Bank		1,280.0		128.2
European Bank for Reconstruction and Development		974.6		256.5

Source: Department of Finance. Data derived from the annual statements/reports of the above-mentioned institutions and in consultation with the Canadian International Development Agency.

(1) Balance of subscription payable only in the unlikely event that there is a call on the institution’s capital.

CLAIMS AND PENDING AND THREATENED LITIGATION

There are thousands of claims and pending and threatened litigation cases outstanding against the Government. These claims include items with pleading amounts and items where an amount is not specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. As at March 31, 2010, the Government had recorded an allowance for claims and litigation where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. Claims and litigation for which the outcome is not determinable and a reasonable estimate can be made were estimated at approximately $4,300 million ($5,700 million in 2009). Certain large and significant claims are described below:

Comprehensive Land Claims

Comprehensive land claims are negotiated in areas where aboriginal title has not been dealt with by treaty or by other legal methods. In such cases, the claim is based on an aboriginal group’s traditional use and occupancy of that land. As of March 31, 2010, there were currently 76 (76 in 2009) comprehensive land claims under negotiation, accepted for negotiation or under review. A liability of $3,800 million ($3,500 million in 2009) is estimated for claims that have progressed to a point where quantification is possible. The remaining claims are still in the early stage of negotiations and cannot yet be quantified.

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Assessed Taxes Under Objection or Appeal

As at March 31, 2010, an amount of $17,102 million ($13,778 million in 2009) of federal and provincial taxes assessed was under objection at Canada Revenue Agency and an amount of $3,509 million ($2,429 million in 2009) was being appealed to either the Tax Court of Canada, the Federal Court of Canada or the Supreme Court of Canada.

Other

In September 1999, the Public Service Superannuation Act, the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act were amended to enable the federal government to deal with excess amounts in the superannuation accounts and pension funds governed by these Acts. The legal validity of these provisions has since been challenged in the Ontario Superior Court of Justice. On November 20, 2007, the Court rendered its decision and dismissed all the claims of the plaintiffs. The plaintiffs appealed this decision to the Ontario Court of Appeal. The outcome of these appeals is not determinable at this time.

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TABLES AND SUPPLEMENTARY INFORMATION

The tables and supplementary information under the headings Unmatured Market Debt, Other Obligations (with Respect to Money Borrowed) and Supplementary Information have been provided by the Department of Finance and the Bank of Canada.

Unmatured Market Debt

All debt obligations listed below are direct obligations of the Government of Canada and constitute a charge on the Consolidated Revenue Fund of Canada.

(A) Payable in Canada in Canadian Dollars

Marketable Bonds(1)

				Outstanding at
Maturity date	Coupon %	Issue date(s)	Series	September 30, 2010
2010 — Oct. 1	8.75	Apr. 28, 1986	H85	$	97,018,000
2010 — Dec. 1	2.75	May 23, 2008; Aug. 22, 2008; Sep. 19, 2008; Nov. 21, 2008; Dec. 19, 2008	YP39		7,714,102,000
2011 — Mar. 1	9.00	Jul. 3, 1986; Sep. 2, 1986; Oct. 23, 1986; Dec. 15, 1986; May 1, 1987; Mar. 15, 1988	H87		463,681,000
2011 — Jun. 1	6.00	May 1, 2000; Aug. 1, 2000; Oct. 30, 2000; Jan. 29, 2001; May 7, 2001; Jul. 30, 2001	XB51		9,368,269,000
2011 — Jun. 1	8.50	Feb. 19, 1987; Mar. 15, 1987	H98		606,151,000
2011 — Jun. 1	1.25	Jan. 27, 2009; Feb. 24, 2009; Mar. 29, 2009	YT50		7,666,000,000
2011 — Sep. 1	3.75	Nov. 21, 2005; Jan. 23, 2006; Feb. 20, 2006; May 23, 2006; Jun. 27, 2006; Jul. 31, 2006; Aug. 21, 2006	YC26		7,181,862,000
2011 — Sep. 1	1.00	May 08, 2009; Jun. 19, 2009; Jul. 30, 2009	YW89		7,922,000,000
2011 — Dec. 1	1.25	Aug. 21, 2009; Sep. 18, 2009	YY46		9,382,000,000
2012 — Mar. 1	1.50	Nov. 16, 2009; Dec. 21, 2009; Jan. 29, 2010	ZB34		9,000,000,000
2012 — Jun. 1	3.75	Nov. 6, 2006; Dec. 11, 2006; Feb. 19, 2007; May 7, 2007; Aug. 20, 2007; Nov. 13, 2007	YG30		6,799,165,000
2012 — Jun. 1	1.50	Mar. 12, 2010; Apr. 9, 2010	ZE72		8,060,638,000
2012 — Jun. 1	5.25	Oct 29, 2001; Feb. 11, 2002; Apr. 22, 2002; Jun. 25, 2002; Aug. 6, 2002; Sep. 30, 2002; Oct. 15, 2002	XH22		10,356,853,000
2012 — Sep. 1	2.00	Jun. 01, 2009; Jul. 13, 2009; Aug. 10, 2009; Jun. 4, 2010; Jul. 9, 2010; Jul. 30, 2010	YX62		17,500,000,000
2012 — Dec. 1	1.50	Aug. 13, 2010; Sep. 7, 2010; Sep. 17, 2010	ZK33		6,504,391,000
2013 — Mar. 1	1.75	Dec. 14, 2009; Feb. 12, 2010; Mar. 26, 2010	ZD99		9,600,000,000
2013 — Jun. 1	3.50	Feb. 25, 2008; Mar. 10, 2008; May 12, 2008; Aug. 5, 2008; Oct. 28, 2008; Nov. 17, 2008	YN80		15,063,624,000
2013 — Jun. 1	5.25	Nov. 4, 2002; Dec. 16, 2002; Feb. 10, 2003; Mar. 24, 2003; May 12, 2003; Jun. 25, 2003; Aug. 11, 2003; Sep. 30, 2003	XM17		8,996,594,000
2013 — Sep. 1	2.50	May 17, 2010; Jun. 21, 2010; Aug. 9, 2010	ZG21		9,200,000,000
2014 — Mar. 15	10.25	Mar. 15, 1989; Mar. 30, 1989; Mar. 15, 1990; Jul. 1, 1990; Aug. 1, 1990; Feb. 21, 1991	A23		709,898,000
2014 — Jun. 1	5.00	Oct. 20, 2003; Dec. 15, 2003; Feb. 9, 2004; Mar. 22, 2004; May 3, 2004; Jun. 22, 2004; Aug. 16, 2004; Sep. 28, 2004	XS86		9,743,802,000
2014 — Jun. 1	3.00	Oct. 21, 2008; Jan. 19, 2009; Feb. 12, 2009; Mar. 16, 2009	YS77		14,968,203,000
2014 — Dec. 1	2.00	Apr. 20, 2009; May 25, 2009; Jul. 20, 2009; Aug. 27, 2009; Sep. 29, 2009	YU24		15,000,000,000
2015 — Jun. 1	2.50	Nov. 23, 2009; Jan. 18, 2010; Mar. 8, 2010	ZC17		9,000,000,000
2015 — Jun. 1	4.50	Oct. 18, 2004; Dec. 20, 2004; Feb. 7, 2005; Mar. 14, 2005; May 9, 2005; Jun. 21, 2005; Aug. 15, 2005; Sep. 26, 2005	XX71		10,143,325,000
2015 — Jun. 1	11.25	May 1, 1990; May 31, 1990; Oct. 1, 1990; Nov. 15, 1990	A34		456,505,000
2015 — Dec. 1	3.00	Apr. 19, 2010; Jun. 14, 2010; Aug. 23, 2010; Sep. 27, 2010	ZF48		10,969,214,000
2016 — Jun. 1	4.00	Nov. 7, 2005; Dec. 12, 2005; Feb. 6, 2006; Mar. 13, 2006; Apr. 24, 2006; Jun. 12, 2006; Aug. 8, 2006; Sep. 19, 2006	YB43		10,157,400,000
2017 — Jun. 1	4.00	Oct. 16, 2006; Nov. 27, 2006; Jan. 29, 2007; Mar. 19, 2007; Apr. 23, 2007; Aug. 7, 2007; Sep. 17, 2007	YF56		10,342,526,000
2018 — Jun. 1	4.25	Oct. 29, 2007; Feb. 11, 2008; Mar. 25, 2008; Apr. 21, 2008; Jun. 23, 2008; Jul. 14, 2008	YL25		10,622,764,000

35

Unmatured Market Debt (Continued)

				Outstanding at
Maturity date	Coupon %	Issue date(s)	Series	September 30, 2010
2019 — Jun. 1	3.75	Oct. 6, 2008; Nov. 10, 2008; Feb. 9, 2009; Mar. 2, 2009; Mar. 10, 2009; Apr. 14, 2009; Jun. 15, 2009; Aug. 18, 2009	YR94	$	17,650,000,000
2020 — Jun. 1	3.50	Sep. 8, 2009; Oct. 14, 2009; Nov. 10, 2009; Feb. 10, 2010; May 3, 2010	YZ11		13,100,000,000
2021 — Mar. 15	10.50	Dec. 15, 1990; Jan. 9, 1991; Feb. 1, 1991	A39		567,361,000
2021 — Jun. 1	3.25	Jul. 19, 2010	ZJ69		3,000,000,000
2021 — Jun. 1	9.75	May 9, 1991; Jun. 1, 1991; Jul. 1, 1991; Aug. 1, 1991; Sep. 1, 1991; Oct. 17, 1991	A43		286,188,000
2021 — Dec. 1	4.25	Dec. 10, 1991; Oct. 14, 1992; May 1, 1993; Dec. 1, 1993; Feb. 22, 1994; Jun. 21, 1994; Sep. 15, 1994; Dec. 15, 1994; Feb. 2, 1995; May 8, 1995; Aug. 4, 1995	L25		7,274,394,000	(2)
2022 — Jun. 1	9.25	Dec. 15, 1991; Jan. 3, 1992; May 15, 1992	A49		206,022,000
2023 — Jun. 1	8.00	Aug. 17, 1992; Feb. 1, 1993; Apr. 1, 1993; Jul. 26, 1993; Oct. 15, 1993; Feb. 1, 1994; May 2, 1994	A55		3,757,121,000
2025 — Jun. 1	9.00	Aug. 2, 1994; Nov. 1, 1994; Feb. 1, 1995; May 1, 1995; Aug. 1, 1995; Nov. 1, 1995; Feb. 1, 1996	A76		3,075,345,000
2026 — Dec. 1	4.25	Dec. 7, 1995; Mar. 6, 1996; Jun. 6, 1996; Sep. 6, 1996; Dec. 6, 1996; Mar. 12, 1997; Jun. 9, 1997; Sep. 8, 1997; Dec. 8, 1997; Mar. 9, 1998; Jun. 8, 1998; Sep. 8, 1998; Dec. 7, 1998	VS05		6,980,820,000	(2)
2027 — Jun. 1	8.00	May 1, 1996; Aug. 1, 1996; Nov. 1, 1996; Feb. 3, 1997; May 1, 1997; Aug. 1, 1997; Nov. 3, 1997	VW17		6,441,435,000
2029 — Jun. 1	5.75	Feb. 2, 1998; May 1, 1998; Nov. 2, 1998; May 3, 1999; Oct. 15, 1999; Apr. 24, 2000; Oct. 16, 2000; Apr. 23, 2001	WL43		12,804,867,000
2031 — Dec. 1	4.00	Mar. 8, 1999; Jun. 8, 1999; Sep. 7, 1999; Dec. 6, 1999; Mar. 6, 2000; Jun. 5, 2000; Sep. 5, 2000; Dec. 11, 2000; Mar. 5, 2001; Jun. 11, 2001; Sep. 24, 2001; Dec. 10, 2001; Mar. 18, 2002; Jun. 10, 2002; Sep. 16, 2002; Dec. 9, 2002; Mar. 17, 2003	WV25		7,411,994,000	(2)
2033 — Jun. 1	5.75	Oct. 15, 2001; Jan. 21, 2002; Mar. 4, 2002; May 6, 2002; Jul. 15, 2002; Nov. 25, 2002; Jan. 20, 2003; Mar. 3, 2003; Apr. 14, 2003; Jul. 14, 2003; Aug. 25, 2003; Nov. 10, 2003; Jan. 19, 2004; Mar. 1, 2004	XG49		13,410,295,000
2036 — Dec. 1	3.00	Jun. 9, 2003; Sep. 15, 2003; Dec. 8, 2003; Mar. 8, 2004; Jun. 7, 2004; Sep. 7, 2004; Dec. 6, 2004; Mar. 7, 2005; Jun. 6, 2005; Sep. 6, 2005; Dec. 5, 2005 Mar. 06, 2006; Jun. 5, 2006; Oct. 2, 2006; Dec. 4, 2006; Mar. 5, 2007	XQ21		6,633,198,000	(2)
2037 — Jun. 1	5.00	Jul. 19, 2004; Sep. 14, 2004; Nov. 8, 2004; Jan. 17, 2005; Apr. 11, 2005; Jul. 11, 2005; Oct. 18, 2005; Jan. 16, 2006; May 1, 2006; Jul. 24, 2006; Oct. 31, 2006; Jan. 15, 2007; Jun. 11, 2007; Jul. 23, 2007; Oct. 9, 2007; Jan. 21, 2008; Jan. 12, 2009	XW98		13,999,089,000
2041 — Jun. 1	4.00	Jun. 9, 2008; Sep. 15, 2008; Dec. 15, 2008; Mar. 23, 2009; May 19, 2009; Jul. 14, 2009; Aug. 5, 2009; Oct. 20, 2009: Feb. 22, 2010: Mar. 22, 2010; May 25, 2010; Sep. 7, 2010	YQ12		14,100,000,000
2041 — Dec. 1	2.00	Jun. 4, 2007; Sep. 4, 2007; Dec. 10, 2007; Mar. 3, 2008; Jun. 2, 2008; Sep. 2, 2008; Dec. 8, 2008; Mar. 9, 2009; Jun. 2, 2009; Aug. 31, 2009; Dec. 7, 2009; Mar. 1, 2010	YK42		6,877,565,500	(2)
2044 — Dec. 1	1.50	May 31, 2010; Aug 30, 2010	ZH04		1,111,231,000	(2)
Total Unmatured Marketable Bonds Payable In Canadian Dollars				$	392,282,910,500

36

Unmatured Market Debt (Continued)

Treasury Bills

Maturity date(s)	Yield %		Issue dates
Various maturity dates from Oct. 1, 2010 to Sept. 29, 2011	0.516 to 1.31			Various issue dates from Oct. 29, 2009 to Sept. 30, 2010	$	170,700,000,000
Canada Savings Bond(3)
	Annual				Outstanding at
Maturity date	Coupons %	Issue date	Series		September 30, 2010
2013 — Nov. 1(4)	0.40 – 7.50	1991 - Nov. 1		S46	$	175,558,675
2014 — Nov. 1(4)	0.40 – 7.50	1992 - Nov. 1		S47		282,728,405
2015 — Nov. 1(4)	0.40 – 7.50	1993 - Nov. 1		S48		227,018,300
2016 — Nov. 1(4)	0.40 – 7.50	1994 - Nov. 1		S49		332,156,009
2017 — Nov. 1(4)	0.40 – 6.75	1995 - Nov. 1		S50		265,728,140
2018 — Nov. 1(4)	0.40 – 8.75	1996 - Nov. 1		S51		485,355,254
2017 — Nov. 1(4)	0.40 – 6.50	1997 - Nov. 1		S52		492,454,517
2018 — Nov. 1(4)	0.40 – 4.85	1998 - Nov. 1		S54		218,195,943
2018 — Dec. 1(4)	0.40 – 4.85	1998 - Dec. 1		S55		16,753,993
2019 — Jan. 1(4)	0.40 – 4.85	1999 - Jan. 1		S56		3,327,019
2019 — Feb. 1(4)	0.40 – 4.60	1999 - Feb. 1		S57		1,907,071
2019 — Mar. 1(4)	0.40 – 4.75	1999 - Mar. 1		S58		4,213,536
2019 — Apr. 1(4)	0.40 – 4.75	1999 - Apr. 1		S59		2,623,209
2019 — Nov. 1(4)	0.40 – 4.85	1999 - Nov. 1		S60		115,619,195
2019 — Dec. 1(4)	0.40 – 4.85	1999 - Dec. 1		S61		12,332,121
2020 — Jan. 1(4)	0.40 – 4.85	2000 - Jan. 1		S62		4,194,624
2020 — Feb. 1(4)	0.40 – 4.60	2000 - Feb. 1		S63		2,575,196
2020 — Mar. 1(4)	0.40 – 4.75	2000 - Mar. 1		S64		4,599,453
2020 — Apr. 1(4)	0.40 – 4.75	2000 - Apr. 1		S65		5,280,251
2010 — Nov. 1	0.40 – 4.85	2000 - Nov. 1		S66		137,868,952
2010 — Dec. 1	0.40 – 4.85	2000 - Dec. 1		S67		12,155,847
2011 — Jan. 1	0.40 – 4.85	2001 - Jan. 1		S68		5,942,678
2011 — Feb. 1	0.40 – 4.40	2001 - Feb. 1		S69		4,286,711
2011 — Mar. 1	0.40 – 4.00	2001 - Mar. 1		S70		4,163,493
2011 — Apr. 1	0.40 – 4.00	2001 - Apr. 1		S71		2,930,476
2011 — Nov. 1	0.40 – 3.25	2001 - Nov. 1		S72		192,299,994
2011 — Dec. 1	0.40 – 3.25	2001 - Dec. 1		S73		12,317,761
2012 — Jan. 1	0.40 – 3.10	2002 - Jan. 1		S74		2,959,976
2012 — Feb. 1	0.40 – 2.80	2002 - Feb. 1		S75		2,310,837
2012 — Mar. 1	0.40 – 4.00	2002 - Mar. 1		S76		7,194,018
2012 — Apr. 1	0.40 – 4.00	2002 - Apr. 1		S77		5,750,257
2012 — Nov. 1	0.40 – 3.25	2002 - Nov. 1		S78		222,212,302
2012 — Dec. 1	0.40 – 3.25	2002 - Dec. 1		S79		17,615,579
2013 — Jan. 1	0.40 – 3.10	2003 - Jan. 1		S80		4,567,857
2013 — Feb. 1	0.40 – 2.80	2003 - Feb. 1		S81		3,228,987
2013 — Mar. 1	0.40 – 3.10	2003 - Mar. 1		S82		7,095,256
2013 — Apr. 1	0.40 – 3.10	2003 - Apr. 1		S83		7,624,357
2013 — Nov. 1	0.40 – 3.25	2003 - Nov. 1		S84		162,423,454
2013 — Dec. 1	0.40 – 3.25	2003 - Dec. 1		S85		9,128,300
2014 — Jan. 1	0.40 – 3.10	2004 - Jan. 1		S86		2,420,642
2014 — Feb. 1	0.40 – 2.80	2004 - Feb. 1		S87		1,775,400
2014 — Mar. 1	0.40 – 3.10	2004 - Mar. 1		S88		3,867,143
2014 — Apr. 1	0.40 – 3.10	2004 - Apr. 1		S89		2,315,089
2014 — Nov. 1	0.40 – 3.25	2004 - Nov. 1		S90		179,900,742
2014 — Dec. 1	0.40 – 3.25	2004 - Dec. 1		S91		10,400,678
2015 — Jan. 1	0.40 – 3.10	2005 - Jan. 1		S92		4,117,247
2015 — Feb. 1	0.40 – 2.80	2005 - Feb. 1		S93		2,265,520
2015 — Mar. 1	0.40 – 3.10	2005 - Mar. 1		S94		4,726,851
2015 — Apr. 1	0.40 – 3.10	2005 - Apr. 1		S95		2,862,757
2015 — Nov. 1	0.40 – 3.25	2005 - Nov. 1		S96		225,462,936
2015 — Dec. 1	0.40 – 3.25	2005 - Dec. 1		S97		11,771,052
2016 — Jan. 1	0.40 – 3.10	2006 - Jan. 1		S98		3,149,500
2016 — Feb. 1	0.40 – 2.85	2006 - Feb. 1		S99		2,464,694
2016 — Mar. 1	0.40 – 2.75	2006 - Mar. 1		S100		5,241,031
2016 — Apr. 1	0.40 – 3.10	2006 - Apr. 1		S101		3,570,308
2016 — Nov. 1	0.40 – 3.25	2006 - Nov. 1		S102		297,551,077
2016 — Dec. 1	0.40 – 3.25	2006 - Dec. 1		S103		14,851,843
2017 — Jan. 1	0.40 – 3.10	2007 - Jan. 1		S104		3,833,000
2017 — Feb. 1	0.40 – 2.85	2007 - Feb. 1		S105		2,858,579
2017 — Mar. 1	0.40 – 3.10	2007 - Mar. 1		S106		7,107,472
2017 — Apr. 1	0.40 – 3.10	2007 - Apr. 1		S107		5,369,695
2017 — Nov. 1	0.40 – 3.10	2007 - Nov. 1		S108		402,789,414
2017 — Dec. 1	0.40 – 3.25	2007 - Dec. 1		S109		24,509,529
2018 — Jan. 1	0.40 – 3.10	2008 - Jan. 1		S110		7,640,298

37

Unmatured Market Debt (Continued)

	Annual				Outstanding at
Maturity date	Coupons %	Issue date	Series		September 30, 2010
2018 — Feb. 1	0.40 – 2.85	2008 - Feb. 1		S111	$	7,685,355
2018 — Mar. 1	0.40 – 2.50	2008 - Mar. 1		S112		8,664,660
2018 — Apr. 1	0.40 – 2.45	2008 - Apr. 1		S113		13,531,887
2018 — Nov. 1	0.40 – 2.00	2008 - Nov. 1		S114		670,364,713
2018 — Dec. 1	0.40 – 1.85	2008 - Dec. 1		S115		55,187,134
2019 — Jan. 1	1.65	2009 - Jan. 1		S116		33,334,766
2019 — Feb. 1	1.25	2009 - Feb. 1		S117		29,745,666
2019 — Mar. 1	1.00	2009 - Mar. 1		S118		29,895,936
2019 — Apr. 1	0.75	2009 - Apr. 1		S119		20,922,918
2019 — Nov. 1	.40 – .65	2009 - Nov. 1		S120		962,327,666
2019 — Dec. 1	0.40	2009 - Dec. 1		S121		24,669,722
2020 — Jan. 1	0.40	2010 - Jan. 1		S122		8,495,834
2020 — Feb. 1	0.40	2010 - Feb. 1		S123		6,712,407
2020 — Mar. 1	0.40	2010 - Mar. 1		S124		11,809,342
2020 — Apr. 1	0.40	2010 - Apr. 1		S125		4,427,753
2020 — Nov. 1	0.65	2010 - Nov. 1		S126		0
					$	6,597,296,260

Canada Premium Bonds(5)

	Annual			Outstanding at
Maturity date	Coupons %	Issue date	Series	September 30, 2010
2018 — Nov. 1(4)	1.85 - 5.00	1998 - Nov. 1	P3	$	356,122,263
2018 — Dec. 1(4)	1.85 - 4.50	1998 - Dec. 1	P4		40,850,385
2019 — Jan. 1(4)	2.00 - 4.50	1999 - Jan. 1	P5		8,910,843
2019 — Feb. 1(4)	1.75 - 4.75	1999 - Feb. 1	P6		6,699,308
2019 — Mar. 1(4)	1.75 - 6.00	1999 - Mar. 1	P7		29,471,243
2019 — Apr. 1(4)	1.40 - 6.00	1999 - Apr. 1	P8		21,058,829
2019 — Nov. 1(4)	1.00 - 6.00	1999 - Nov. 1	P9		139,983,810
2019 — Dec. 1(4)	1.00 - 6.00	1999 - Dec. 1	P10		42,055,695
2020 — Jan. 1(4)	1.00 - 6.00	2000 - Jan. 1	P11		15,448,707
2020 — Feb. 1(4)	1.00 - 6.00	2000 - Feb. 1	P12		11,286,295
2020 — Mar. 1(4)	1.00 - 6.25	2000 - Mar. 1	P13		26,378,571
2020 — Apr. 1(4)	1.00 - 6.25	2000 - Apr. 1	P14		31,920,073
2010 — Nov. 1	2.35 - 5.90	2000 - Nov. 1	P15		308,677,052
2010 — Dec. 1	2.35 - 5.90	2000 - Dec. 1	P16		67,159,020
2011 — Jan. 1	2.35 - 5.90	2001 - Jan. 1	P17		75,544,909
2011 — Feb. 1	1.75 - 5.75	2001 - Feb. 1	P18		141,656,332
2011 — Mar. 1	1.75 - 4.55	2001 - Mar. 1	P19		18,311,901
2011 — Apr. 1	1.40 - 4.55	2001 - Apr. 1	P20		18,181,371
2011 — Nov. 1	1.10 - 4.00	2001 - Nov. 1	P21		339,160,141
2011 — Dec. 1	1.85 - 4.00	2001 - Dec. 1	P22		46,987,344
2012 — Jan. 1	2.00 - 3.50	2002 - Jan. 1	P23		12,713,866
2012 — Feb. 1	2.00 - 3.50	2002 - Feb. 1	P24		10,769,470
2012 — Mar. 1	1.00 - 6.00	2002 - Mar. 1	P25		57,221,516
2012 — Apr. 1	1.00 - 6.00	2002 - Apr. 1	P26		26,888,099
2012 — Nov. 1	1.10 - 6.00	2002 - Nov. 1	P27		680,951,637
2012 — Dec. 1	2.50 - 6.00	2002 - Dec. 1	P28		134,680,827
2013 — Jan. 1	2.50 - 6.00	2003 - Jan. 1	P29		52,312,760
2013 — Feb. 1	2.50 - 6.00	2003 - Feb. 1	P30		8,576,533
2013 — Feb. 1	2.50 - 5.00	2003 - Feb. 1	P33		41,989,274
2013 — Mar. 1	2.50 - 5.00	2003 - Mar. 1	P31		35,660,647
2013 — Apr. 1	2.50 - 5.00	2003 - Apr. 1	P32		18,825,541
2013 — Nov. 1	2.35 - 5.00	2003 - Nov. 1	P34		522,003,499
2013 — Dec. 1	2.35 - 5.50	2003 - Dec. 1	P35		115,065,480
2014 — Jan. 1	2.35 - 5.50	2004 - Jan. 1	P36		39,964,861
2014 — Feb. 1	1.75 - 5.00	2004 - Feb. 1	P37		26,503,017
2014 — Mar. 1	1.75 - 4.00	2004 - Mar. 1	P38		36,701,022
2014 — Apr. 1	1.40 - 4.00	2004 - Apr. 1	P39		19,515,651
2014 — Nov. 1	1.85 - 3.50	2004 - Nov. 1	P40		150,627,164
2014 — Dec. 1	1.85 - 3.50	2004 - Dec. 1	P41		36,377,475
2015 — Jan. 1	2.00 - 3.25	2005 - Jan. 1	P42		12,131,925
2015 — Feb. 1	2.00 - 3.05	2005 - Feb. 1	P43		6,027,477
2015 — Mar. 1	2.00 - 3.15	2005 - Mar. 1	P44		7,625,936
2015 — Apr. 1	2.00 - 3.05	2005 - Apr. 1	P45		6,626,507
2015 — Nov. 1	2.25 - 2.75	2005 - Nov. 1	P46		84,326,391
2015 — Dec. 1	2.35 - 3.55	2005 - Dec. 1	P47		35,964,983
2016 — Jan. 1	2.35 - 4.00	2006 - Jan. 1	P48		10,956,276
2016 — Feb. 1	1.75 - 4.00	2006 - Feb. 1	P49		11,147,135
2016 — Mar. 1	1.75 - 4.00	2006 - Mar. 1	P50		11,426,688
2016 — Apr. 1	1.40 - 4.00	2006 - Apr. 1	P51		12,814,937
2016 — Nov. 1	1.00 - 3.35	2006 - Nov. 1	P52		83,386,160
2016 — Dec. 1	1.00 - 3.35	2006 - Dec. 1	P53		21,026,457
2017 — Jan. 1	1.00 - 3.25	2007 - Jan. 1	P54		6,011,943

38

Unmatured Market Debt (Continued)

	Annual			Outstanding at
Maturity date	Coupons %	Issue date	Series	September 30, 2010
2017 — Feb. 1	1.00 - 3.05	2007 - Feb. 1	P55	$	4,701,869
2017 — Mar. 1	1.00 - 3.35	2007 - Mar. 1	P56		31,430,068
2017 — Apr. 1	1.00 - 3.35	2007 - Apr. 1	P57		22,263,500
2017 — Nov. 1	1.10 - 3.50	2007 - Nov. 1	P58		77,908,242
2017 — Dec. 1	3.30 - 3.50	2007 - Dec. 1	P59		19,654,904
2018 — Jan. 1	3.15 - 3.25	2008 - Jan. 1	P60		4,986,146
2018 — Feb. 1	2.95 - 3.05	2008 - Feb. 1	P61		5,507,202
2018 — Mar. 1	2.85 - 3.15	2008 - Mar. 1	P62		11,188,990
2018 — Apr. 1	2.75 - 3.05	2008 - Apr. 1	P63		15,412,270
2018 — Nov. 1	2.35 - 2.65	2008 - Nov. 1	P64		167,510,483
2018 — Dec. 1	2.35 - 2.65	2008 - Dec. 1	P65		98,358,608
2019 — Jan. 1	2.35 - 2.65	2009 - Jan. 1	P66		68,633,968
2019 — Feb. 1	1.75 - 2.05	2009 - Feb. 1	P67		26,049,999
2019 — Mar. 1	1.75 - 2.05	2009 - Mar. 1	P68		28,843,041
2019 — Apr. 1	1.40 - 1.70	2009 - Apr. 1	P69		34,836,481
2019 — Nov. 1	1.00 - 1.80	2009 - Nov. 1	P70		98,502,642
2019 — Dec. 1	1.00 - 1.80	2009 - Dec. 1	P71		58,517,841
2020 — Jan. 1	1.00 - 1.80	2010 - Jan. 1	P72		21,799,251
2020 — Feb. 1	1.00 - 1.80	2010 - Feb. 1	P73		17,492,969
2020 — Mar. 1	1.00 - 1.80	2010 - Mar. 1	P74		14,799,534
2020 — Apr. 1	1.00 - 1.80	2010 - Apr. 1	P75		10,935,148
2020 — Nov. 1	1.10 - 1.70	2010 - Nov. 1	P76		0
				$	4,922,018,397

Obligations Issued To Canada Pension Plan Investment Fund(6)

Maturity date(s)	Coupon(s) %	Issue date(s)
Various maturity dates from Nov. 1, 2010 to Jul. 2, 2012	9.17 to 11.04	Various issue dates from Nov. 1, 1990 to Jul. 2, 1992 (long term)	$	62,107,000

Total Unmatured Market Debt Payable In Canadian Dollars $ 574,564,332,157

39

Unmatured Market Debt (Continued)

(B) Payable In Foreign Currency (1) (7)

Canada Bills

					Outstanding at
Maturity date(s)	Yield(s) %	Original issue amount		Issue date(s)	September 30, 2010
Various maturity dates	0.04 to 0.39	U.S.$	2,489,694,000	Various issue dates	$	2,561,895,126
from Oct. 1, 2010				from Jan. 11, 2010
to Jun. 3, 2011				to Sept. 30, 2010

Other Marketable Bonds Payable In Foreign Currencies

		Original amount at			Issue or
Maturity date	Coupon %	issue or assumption			assumption date
2014 — Sep. 10	2.38	USD	3,000,000,000		2009 — Sep. 10	$	3,087,000,000
2016 — Dec. 15	8.25	USD	38,244,000(8	)(9)	2001 — Feb. 5		34,208,076
2018 — Jun. 30	9.70	USD	16,080,000(8	)	2001 — Feb. 5		16,546,320
2019 — Jun. 1	8.80	USD	3,500,000(8	)	2001 — Feb. 5		3,601,500
2020 — Jan. 13	3.50	EUR	2,000,000,000		2010 — Jan. 13		2,805,774,300
Total(10)						$	5,947,130,196
Total Unmatured Market Debt Payable In Foreign Currency						$	8,509,025,322
Total Unmatured Market Debt						$	583,073,357,479

40

Unmatured Market Debt (Continued)

(C) Cross Currency Swaps

For the cross currency swaps listed below (outstanding as of September 30, 2010), the Government’s Canadian dollar liability has been swapped into a U.S. dollar liability

	Canadian dollar liability			U.S. dollar liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
2010 Oct. 01	4.4950	$	79,230,000	Fixed		USD 50,000,000
2011 Mar. 01	4.6400		78,670,000	Fixed		50,000,000
Mar. 01	5.0090		78,375,000	Fixed		50,000,000
Mar. 01	5.4000		115,072,500	Fixed		75,000,000
Mar. 01	5.4300		114,750,000	Fixed		75,000,000
Mar. 01	5.5860		116,632,500	Fixed		75,000,000
Jun. 01	4.44453		99,750,000	Fixed		75,000,000
Jun. 01	4.4527		99,375,000	Fixed		75,000,000
Jun. 01	4.4659		68,450,000	3 month LIBOR		50,000,000
Jun. 01	4.5279		68,940,000	Fixed		50,000,000
Jun. 01	4.6112		101,400,000	Fixed		75,000,000
Jun. 01	4.6430		78,670,000	Fixed		50,000,000
Jun. 01	4.6600		79,010,000	Fixed		50,000,000
Jun. 01	4.6980		78,950,000	Fixed		50,000,000
Jun. 01	4.8045		79,440,000	Fixed		50,000,000
Jun. 01	4.9430		77,875,000	Fixed		50,000,000
Jun. 01	5.0339		77,815,000	Fixed		50,000,000
Jun. 01	5.0670		78,775,000	Fixed		50,000,000
Jun. 01	5.4000		114,990,000	Fixed		75,000,000
2012 Apr. 06	3 month CDOR		250,000,000	3 month LIBOR		202,020,202
Apr. 08	3 month CDOR		248,320,000	3 month LIBOR		200,000,000
Apr. 13	3 month CDOR		247,400,000	3 month LIBOR		200,000,000
May 05	3 month CDOR		299,880,000	3 month LIBOR		252,000,000
Jun. 01	3.9148		93,675,000	Fixed		75,000,000
Jun. 01	3.9154		57,410,000	3 month LIBOR		50,000,000
Jun. 01	3.93343		93,375,000	Fixed		75,000,000
Jun. 01	3.94551		92,287,500	Fixed		75,000,000
Jun. 01	3.9592		61,200,000	Fixed		50,000,000
Jun. 01	3.9840		93,225,000	3 month LIBOR		75,000,000
Jun. 01	4.0190		90,225,000	3 month LIBOR		75,000,000
Jun. 01	4.0499		118,150,000	3 month LIBOR		100,000,000
Jun. 01	4.0569		117,380,000	3 month LIBOR		100,000,000
Jun. 01	4.1065		58,875,000	3 month LIBOR		50,000,000
Jun. 01	4.3370		133,900,000	3 month LIBOR		100,000,000
Jun. 01	4.3697		96,525,000	Fixed		75,000,000
Jun. 01	4.59355		99,600,000	Fixed		75,000,000
Jun. 01	4.6314		68,625,000	Fixed		50,000,000
Jun. 01	4.6402		102,787,500	3 month LIBOR		75,000,000
Jun. 01	4.6770		68,300,000	Fixed		50,000,000
Jun. 01	4.8198		100,897,500	3 month LIBOR		75,000,000
Jun. 01	4.9090		78,445,000	Fixed		50,000,000
Jun. 01	4.9872		79,500,000	Fixed		50,000,000
Jun. 01	5.0863		78,745,000	Fixed		50,000,000
Jun. 01	5.1110		78,540,000	Fixed		50,000,000
Jun. 01	5.4980		76,650,000	Fixed		50,000,000
Jun. 15	3 month CDOR		225,560,000	3 month LIBOR		200,000,000
Jun. 18	3 month CDOR		209,605,000	3 month LIBOR		185,000,000
Jun. 18	2.1500		16,200,000	3 month LIBOR		15,000,000
2013 Jun. 01	3.7493		120,600,000	3 month LIBOR		100,000,000
Jun. 01	4.0677		117,500,000	3 month LIBOR		100,000,000
Jun. 01	4.07245		123,100,000	3 month LIBOR		100,000,000
Jun. 01	4.0995		118,200,000	3 month LIBOR		100,000,000
Jun. 01	4.11355		91,687,500	Fixed		75,000,000
Jun. 01	4.11833		90,975,000	Fixed		75,000,000
Jun. 01	4.14637		122,700,000	Fixed		100,000,000
Jun. 01	4.1494		62,000,000	3 month LIBOR		50,000,000
Jun. 01	4.30247		89,250,000	3 month LIBOR		75,000,000
Jun. 01	4.5100		33,437,500	3 month LIBOR		25,000,000
Jun. 01	4.5340		33,375,000	3 month LIBOR		25,000,000
Jun. 01	4.5480		98,662,500	Fixed		75,000,000
Jun. 01	4.5938		103,050,000	Fixed		75,000,000
Jun. 01	4.6810		102,150,000	Fixed		75,000,000
Jun. 01	4.7850		104,250,000	3 month LIBOR		75,000,000
2014 Mar. 15	4.1145		62,750,000	Fixed		50,000,000
Mar. 15	4.11452		92,625,000	Fixed		75,000,000
Mar. 15	4.1870		91,950,000	Fixed		75,000,000
Mar. 15	4.1969		123,750,000	Fixed		100,000,000
Mar. 15	4.2973		59,850,000	Fixed		50,000,000

41

Unmatured Market Debt (Continued)

	Canadian dollar liability			U.S. dollar liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
Mar. 15	4.3137	$	91,117,500	Fixed		USD 75,000,000
Mar. 15	4.3400		91,762,500	Fixed		75,000,000
Mar. 15	4.6365		103,170,000	Fixed		75,000,000
Mar. 15	4.6615		100,650,000	Fixed		75,000,000
Mar. 15	4.7329		101,962,500	Fixed		75,000,000
Mar. 15	4.8547		69,425,000	3 month LIBOR		50,000,000
Mar. 15	4.8973		69,925,000	3 month LIBOR		50,000,000
Jun. 01	3.7516		119,120,000	3 month LIBOR		100,000,000
Jun. 01	3.7662		118,950,000	3 month LIBOR		100,000,000
Jun. 01	3.7964		119,500,000	3 month LIBOR		100,000,000
Jun. 01	3.8246		119,850,000	3 month LIBOR		100,000,000
Jun. 01	4.0288		117,750,000	3 month LIBOR		100,000,000
Jun. 01	4.1189		85,350,000	3 month LIBOR		75,000,000
Jun. 01	4.1435		86,437,500	3 month LIBOR		75,000,000
Jun. 01	4.2989		92,250,000	3 month LIBOR		75,000,000
Jun. 01	4.55863		65,200,000	Fixed		50,000,000
Jun. 01	4.5768		65,725,000	Fixed		50,000,000
Jun. 01	4.6020		96,862,500	Fixed		75,000,000
Jun. 01	4.6262		97,500,000	Fixed		75,000,000
Jun. 01	4.6421		94,410,000	3 month LIBOR		75,000,000
Jun. 01	4.6437		97,627,500	Fixed		75,000,000
Jun. 01	4.6591		94,725,000	3 month LIBOR		75,000,000
Jun. 01	4.70554		98,730,000	Fixed		75,000,000
Jun. 01	4.7375		99,300,000	Fixed		75,000,000
Jun. 01	4.7540		65,200,000	3 month LIBOR		50,000,000
Jun. 01	4.7943		99,150,000	3 month LIBOR		75,000,000
Jun. 01	4.9805		136,240,000	Fixed		100,000,000
2015 Jun. 01	3.7511		92,325,000	3 month LIBOR		75,000,000
Jun. 01	3.8187		123,250,000	3 month LIBOR		100,000,000
Jun. 01	3.8207		92,737,500	3 month LIBOR		75,000,000
Jun. 01	3.8960		124,310,000	3 month LIBOR		100,000,000
Jun. 01	3.9048		121,850,000	3 month LIBOR		100,000,000
Jun. 01	3.9082		121,940,000	3 month LIBOR		100,000,000
Jun. 01	3.9301		121,720,000	3 month LIBOR		100,000,000
Jun. 01	3.9585		122,150,000	3 month LIBOR		100,000,000
Jun. 01	3.9598		121,200,000	3 month LIBOR		100,000,000
Jun. 01	4.0205		117,870,000	3 month LIBOR		100,000,000	��
Jun. 01	4.0487		95,175,000	3 month LIBOR		75,000,000
Jun. 01	4.0525		126,950,000	3 month LIBOR		100,000,000
Jun. 01	4.1225		93,525,000	3 month LIBOR		75,000,000
Jun. 01	4.1273		85,950,000	3 month LIBOR		75,000,000
Jun. 01	4.1384		85,650,000	3 month LIBOR		75,000,000
Jun. 01	4.1598		93,225,000	3 month LIBOR		75,000,000
Jun. 01	4.17423		62,050,000	3 month LIBOR		50,000,000
Jun. 01	4.1810		92,625,000	Fixed		75,000,000
Jun. 01	4.1850		92,775,000	3 month LIBOR		75,000,000
Jun. 01	4.2002		62,050,000	3 month LIBOR		50,000,000
Jun. 01	4.2103		57,875,000	3 month LIBOR		50,000,000
Jun. 01	4.3380		62,100,000	Fixed		50,000,000
Jun. 01	4.3438		91,875,000	3 month LIBOR		75,000,000
Jun. 01	4.37127		90,150,000	Fixed		75,000,000
Jun. 01	4.3860		90,300,000	Fixed		75,000,000
Jun. 01	4.3960		120,550,000	Fixed		100,000,000
Jun. 01	4.4310		90,487,500	Fixed		75,000,000
Jul. 20	3.5542		76,987,500	3 month LIBOR		75,000,000
Oct. 20	3.3805		104,900,000	3 month LIBOR		100,000,000
2016 Feb. 20	3.2529		80,175,000	Fixed		75,000,000
Apr. 20	3.4474		49,825,000	Fixed		50,000,000
Apr. 20	3.4533		75,150,000	Fixed		75,000,000
May 20	3.4307		74,512,500	Fixed		75,000,000
Jun. 01	4.0098		117,000,000	Fixed		100,000,000
Jun. 01	4.0450		169,050,000	3 month LIBOR		150,000,000
Jun. 01	4.0545		113,150,000	3 month LIBOR		100,000,000
Jun. 01	4.1248		113,250,000	3 month LIBOR		100,000,000
Sep. 20	3.5990		100,080,000	Fixed		100,000,000
Sep. 20	3.6960		101,000,000	Fixed		100,000,000
Oct. 20	3.5212		78,108,750	Fixed		75,000,000
Nov. 20	3.2886		53,260,000	Fixed		50,000,000
Nov. 20	4.16311		56,380,000	Fixed		50,000,000
Nov. 20	4.1858		113,000,000	Fixed		100,000,000
Nov. 20	4.2380		52,750,000	Fixed		50,000,000
Nov. 20	4.2877		52,200,000	Fixed		50,000,000
Nov. 20	4.3188		103,690,000	Fixed		100,000,000
2017 Jan. 20	3.6938		76,237,500	Fixed		75,000,000

42

Unmatured Market Debt (Continued)

	Canadian dollar liability			U.S. dollar liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
Feb. 20	4.4067	$	80,925,000	Fixed		USD 75,000,000
Feb. 20	4.6263		52,150,000	Fixed		50,000,000
Feb. 20	4.6564		104,860,000	Fixed		100,000,000
Mar. 20	4.4898		79,350,000	Fixed		75,000,000
Mar. 20	4.6458		53,675,000	Fixed		50,000,000
Apr. 20	4.2287		55,150,000	Fixed		50,000,000
Apr. 20	4.2892		54,900,000	Fixed		50,000,000
May 20	4.1826		55,400,000	Fixed		50,000,000
May 20	4.21876		110,800,000	Fixed		100,000,000
May 20	4.5388		104,630,000	Fixed		100,000,000
May 20	4.5433		104,300,000	Fixed		100,000,000
May 20	4.5773		104,200,000	3 month LIBOR		100,000,000
May 20	4.5823		103,700,000	Fixed		100,000,000
May 20	4.5926		104,300,000	Fixed		100,000,000
May 20	4.6273		52,195,000	Fixed		50,000,000
May 20	4.6325		53,350,000	Fixed		50,000,000
Jun. 01	3.9835		117,800,000	Fixed		100,000,000
Jun. 01	4.0122		116,890,000	Fixed		100,000,000
Jun. 01	4.0207		117,530,000	Fixed		100,000,000
Jun. 01	4.0262		117,600,000	Fixed		100,000,000
Jun. 01	4.0313		117,170,000	Fixed		100,000,000
Jun. 01	4.1118		116,140,000	Fixed		100,000,000
Jun. 01	4.12744		115,650,000	Fixed		100,000,000
Jun. 01	4.1763		114,750,000	Fixed		100,000,000
Jun. 01	4.2051		115,190,000	Fixed		100,000,000
Jun. 01	4.2174		113,250,000	Fixed		100,000,000
Jul. 20	4.6740		53,375,000	3 month LIBOR		50,000,000
Aug. 20	4.5517		53,250,000	3 month LIBOR		50,000,000
Aug. 20	4.6200		80,212,500	Fixed		75,000,000
Sep. 20	4.3226		99,920,000	3 month LIBOR		100,000,000
Sep. 20	4.4428		49,330,000	3 month LIBOR		50,000,000
Oct. 03	4.4070		75,000,000	3 month LIBOR		76,336,000
Oct. 20	4.2830		49,000,000	Fixed		50,000,000
2018 Jan. 20	3.5834		75,517,500	Fixed		75,000,000
Jan. 20	3.8380		50,225,000	Fixed		50,000,000
Jan. 20	3.8670		49,875,000	Fixed		50,000,000
Mar. 20	3.5553		51,100,000	Fixed		50,000,000
Mar. 20	3.5679		76,612,500	Fixed		75,000,000
Mar. 20	3.6000		76,350,000	Fixed		75,000,000
Mar. 20	3.6027		76,500,000	Fixed		75,000,000
Mar. 20	3.6046		50,735,000	Fixed		50,000,000
Mar. 20	3.6064		76,650,000	Fixed		75,000,000
Mar. 20	3.6216		50,325,000	Fixed		50,000,000
Mar. 20	3.7441		50,685,000	Fixed		50,000,000
Apr. 20	3.5660		52,600,000	Fixed		50,000,000
Apr. 20	3.5748		75,450,000	Fixed		75,000,000
Apr. 20	3.5912		50,250,000	Fixed		50,000,000
Apr. 20	3.6115		100,000,000	Fixed		100,000,000
Apr. 20	3.6233		99,250,000	Fixed		100,000,000
Apr. 20	3.6371		76,350,000	Fixed		75,000,000
Apr. 20	3.6992		102,475,000	Fixed		100,000,000
Apr. 20	3.7029		99,400,000	Fixed		100,000,000
May 20	3.5552		79,725,000	Fixed		75,000,000
May 20	3.5874		106,300,000	Fixed		100,000,000
May 20	3.6656		100,400,000	Fixed		100,000,000
May 20	3.6742		75,465,000	Fixed		75,000,000
May 20	3.8752		101,000,000	Fixed		100,000,000
Jun. 20	3.4819		106,100,000	Fixed		100,000,000
Jun. 20	3.6492		75,450,000	Fixed		75,000,000
Jun. 20	3.6669		50,600,000	Fixed		50,000,000
Jun. 20	3.6706		75,975,000	Fixed		75,000,000
Jun. 20	3.6743		51,000,000	Fixed		50,000,000
Jun. 20	3.6870		50,650,000	Fixed		50,000,000
Jun. 20	3.7363		50,085,000	Fixed		50,000,000
Jul. 20	3.4673		53,500,000	Fixed		50,000,000
Jul. 20	3.6476		104,850,000	Fixed		100,000,000
Aug. 20	3.4930		106,900,000	Fixed		100,000,000
Aug. 20	3.6614		103,500,000	Fixed		100,000,000
Oct. 20	3.6682		125,000,000	Fixed		100,000,000
Nov. 20	3 month CDOR		85,950,000	Fixed		75,000,000
Nov. 20	3.2852		110,000,000	Fixed		100,000,000
Nov. 20	3.3194		109,850,000	Fixed		100,000,000
Nov. 20	3.3360		55,975,000	Fixed		50,000,000
Nov. 20	3.3456		84,037,500	Fixed		75,000,000

43

Unmatured Market Debt (Continued)

	Canadian dollar liability			U.S. dollar liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
Nov. 20	3.3783	$	55,500,000	Fixed		USD 50,000,000
Nov. 20	3.3920		55,500,000	Fixed		50,000,000
Nov. 20	3.4346		136,275,000	Fixed		125,000,000
2019 Feb. 20	3.3200		106,850,000	Fixed		100,000,000
Feb. 20	3.3201		106,780,000	Fixed		100,000,000
Apr. 20	3 month CDOR		175,500,000	Fixed		150,000,000
May 20	3.3076		116,560,000	Fixed		100,000,000
May 20	3.3258		58,000,000	Fixed		50,000,000
May 20	3.3313		116,000,000	Fixed		100,000,000
May 20	3.3435		116,400,000	Fixed		100,000,000
May 20	3.3600		57,000,000	Fixed		50,000,000
Aug. 20	3.3510		108,650,000	Fixed		100,000,000
Aug. 20	3.3547		54,400,000	Fixed		50,000,000
Aug. 20	3.3835		163,875,000	Fixed		150,000,000
Aug. 20	3.4300		104,700,000	Fixed		100,000,000
Aug. 20	3.4388		107,900,000	Fixed		100,000,000
Aug. 20	3.4476		52,550,000	Fixed		50,000,000
Oct. 20	3.5067		54,964,000	3 month LIBOR		52,000,000
Nov. 20	3.3985		52,415,000	3 month LIBOR		50,000,000
Nov. 20	3.4095		110,400,000	Fixed		100,000,000
Nov. 20	3.4625		110,000,000	Fixed		100,000,000
Nov. 23	3.4101		53,445,000	3 month LIBOR		50,000,000
Nov. 25	3.4055		66,316,800	3 month LIBOR		62,800,000
Nov. 27	3.2949		52,750,000	3 month LIBOR		50,000,000
2020 Jan. 20	3.2663		106,000,000	3 month LIBOR		100,000,000
Jan. 20	3.3197		52,750,000	3 month LIBOR		50,000,000
Jan. 20	3.3747		52,600,000	3 month LIBOR		50,000,000
Jan. 20	3.4990		15,427,500	3 month LIBOR		15,000,000
Jan. 20	3.5145		18,562,536	3 month LIBOR		17,995,672
Feb. 20	3.3900		53,130,000	3 month LIBOR		50,000,000
Feb. 20	3.4030		53,500,000	Fixed		50,000,000
Feb. 20	3.4258		86,395,588	3 month LIBOR		81,528,346
Mar. 20	3.3910		53,500,000	Fixed		50,000,000
Mar. 20	3.4221		106,570,000	Fixed		100,000,000
Mar. 20	3.4370		157,050,000	Fixed		150,000,000
Mar. 20	3.4761		103,300,000	Fixed		100,000,000
Mar. 20	3.4944		105,750,000	Fixed		100,000,000
Mar. 20	3.5531		205,600,000	Fixed		200,000,000
Mar. 20	3.5577		103,050,000	Fixed		100,000,000
Apr. 20	3.4551		105,450,000	Fixed		100,000,000
Apr. 20	3.4810		157,350,000	Fixed		150,000,000
Apr. 20	3.4945		104,580,000	Fixed		100,000,000
Apr. 20	3.5241		104,250,000	Fixed		100,000,000
Apr. 20	3.5363		157,305,000	Fixed		150,000,000
May. 20	3.6560		50,895,000	Fixed		50,000,000
May. 20	3.7121		100,500,000	Fixed		100,000,000
Jun. 20	3.2828		79,792,500	Fixed		75,000,000
Jun. 20	3.2970		53,090,000	Fixed		50,000,000
Jun. 20	3.3006		53,425,000	Fixed		50,000,000
Jun. 20	3.4058		51,700,000	Fixed		50,000,000
Jun. 20	3.4655		51,825,000	Fixed		50,000,000
Jun. 20	3.5847		51,000,000	Fixed		50,000,000
Jun. 22	3.2882		52,550,000	Fixed		50,000,000
Jun. 22	3.3000		105,600,000	Fixed		100,000,000
Jun. 22	3.3118		52,525,000	Fixed		50,000,000
Jun. 22	3.3315		104,000,000	Fixed		100,000,000
Jun. 22	3.3647		104,150,000	Fixed		100,000,000
Jun. 22	3.3800		51,900,000	Fixed		50,000,000
Jul. 20	3.2942		51,060,000	Fixed		50,000,000
Jul. 20	3.3248		51,250,000	Fixed		50,000,000
Jul. 20	3.3700		76,252,500	3 month LIBOR		75,000,000
Aug. 20	3.0731		103,950,000	3 month LIBOR		100,000,000
Aug. 20	3.0789		98,393,300	3 month LIBOR		94,700,000
Aug. 20	3.0890		51,200,000	Fixed		50,000,000
Aug. 20	3.1462		52,740,000	Fixed		50,000,000
Aug. 20	3.1601		52,750,000	Fixed		50,000,000
Aug. 20	3.1857		52,000,000	Fixed		50,000,000
Aug. 20	3.2031		104,000,000	Fixed		100,000,000
Aug. 20	3.2298		51,600,000	Fixed		50,000,000
Aug. 20	3.2321		103,100,000	Fixed		100,000,000
Aug. 20	3.2555		103,620,000	Fixed		100,000,000

44

Unmatured Market Debt (Continued)

	Canadian dollar liability			U.S. dollar liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
Sep. 20	2.8800		18,358,980	3 month LIBOR		17,560,000
Oct. 20	2.9630		62,502,178	3 month LIBOR		60,593,483
Oct. 20	2.9735		51,180,000	Fixed		50,000,000
Oct. 20	3.0142		51,425,000	Fixed		50,000,000
		$	26,266,367,131			USD 22,757,533,703

For the cross currency swaps listed below (outstanding as of September 30, 2010), the Government’s Canadian dollar liability has been swapped into a euro liability.

	Canadian dollar liability			Euro liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
2010 — Oct. 1	5.13600	$	70,478,000	Fixed		EUR 50,000,000
Oct. 1	5.23900		71,805,000	Fixed		50,000,000
Oct. 1	5.26570		103,876,125	Fixed		75,000,000
Oct. 1	5.28100		103,462,328	Fixed		75,000,000
Oct. 1	5.33200		71,512,500	Fixed		50,000,000
Oct. 1	5.39100		67,200,000	Fixed		50,000,000
Oct. 1	5.51860		104,770,421	Fixed		75,000,000
Oct. 1	5.70110		52,407,000	Fixed		40,000,000
Oct. 1	5.72600		98,520,000	Fixed		75,000,000
2011 — Jun. 1	3.81820		70,260,000	Fixed		50,000,000
Jun. 1	4.11270		119,869,000	Fixed		85,000,000
Jun. 1	4.15040		82,800,000	Fixed		60,000,000
Jun. 1	4.24630		91,942,000	Fixed		65,000,000
Jun. 1	4.28570		119,306,000	Fixed		85,000,000
Jun. 1	5.10200		105,164,970	Fixed		75,000,000
Jun. 1	5.36960		69,535,700	Fixed		50,000,000
Jun. 1	5.49060		69,340,800	Fixed		50,000,000
Sep. 1	3.99180		78,375,000	Fixed		55,000,000
Sep. 1	4.03020		120,581,000	Fixed		85,000,000
Sep. 1	4.03420		119,816,000	Fixed		85,000,000
Sep. 1	4.05070		113,960,000	Fixed		80,000,000
Sep. 1	4.07130		113,760,000	Fixed		80,000,000
Nov. 20	2.05340		158,750,000	Fixed		100,000,000
2012 — Apr. 20	1.50560		79,650,000	Fixed		50,000,000
Apr. 20	1.55480		80,875,000	Fixed		50,000,000
Jun. 1	3.62450		121,057,115	Fixed		85,000,000
Jun. 1	3.86440		119,952,000	Fixed		85,000,000
Jun. 1	3.98100		70,875,000	Fixed		50,000,000
Jun. 1	3.99850		115,931,500	Fixed		85,000,000
Jun. 1	4.00360		120,360,000	Fixed		85,000,000
Jun. 1	4.05650		119,175,000	Fixed		85,000,000
Jun. 1	4.08310		114,032,000	Fixed		80,000,000
Jun. 1	4.30400		119,348,500	Fixed		85,000,000
Jun. 1	4.34060		119,433,000	Fixed		85,000,000
Jun. 1	5.60300		70,615,000	Fixed		50,000,000
Jun. 1	5.67400		70,101,870	Fixed		50,000,000
Nov. 20	3.37300		55,811,000	Fixed		35,000,000
2013 — Jan. 20	1.70480		119,377,500	Fixed		75,000,000
Apr. 19	1.81000		79,500,000	Fixed		50,000,000
Apr. 19	1.83640		119,475,000	Fixed		75,000,000
Jun. 1	3.56590		126,066,000	Fixed		85,000,000
Jun. 1	3.85940		119,793,050	Fixed		85,000,000
Jun. 1	3.92270		71,300,000	Fixed		50,000,000
Jun. 1	4.04960		120,997,500	Fixed		85,000,000
Jun. 1	4.06580		118,725,000	Fixed		85,000,000
Jun. 1	4.06720		81,954,000	Fixed		60,000,000
Jun. 1	4.06880		118,549,500	Fixed		85,000,000
Jun. 1	4.41480		119,408,000	Fixed		85,000,000
Jun. 1	4.41890		118,983,000	Fixed		85,000,000
Jul. 19	1.60750		97,680,000	Fixed		60,000,000
Jul. 20	3.05400		151,280,000	Fixed		100,000,000
Jul. 20	3.10860		151,850,000	Fixed		100,000,000
2014 — Jun. 1	3.72300		124,025,500	Fixed		85,000,000
Jun. 1	3.85090		121,953,104	Fixed		85,000,000
Jun. 1	3.87030		120,402,500	Fixed		85,000,000
Jun. 1	3.97840		121,779,500	Fixed		85,000,000
Jun. 1	4.01790		116,000,000	Fixed		85,000,000
Jun. 1	4.08210		137,460,000	Fixed		100,000,000
Jun. 1	4.13160		118,991,500	Fixed		85,000,000
Jun. 1	4.16900		118,986,000	Fixed		85,000,000
Jun. 1	4.29100		121,735,000	Fixed		85,000,000

45

Unmatured Market Debt (Continued)

	Canadian dollar liability			Euro liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
Jun. 1	4.29570	$	92,675,000	Fixed		EUR 65,000,000
Jun. 1	4.35210		118,337,000	Fixed		85,000,000
Jun. 1	4.42220		120,292,000	Fixed		85,000,000
Aug. 20	3.59700		118,125,000	Fixed		75,000,000
Aug. 20	3.63140		78,466,500	Fixed		50,000,000
Aug. 20	3.66910		79,225,000	Fixed		50,000,000
Sep. 20	3.50400		39,925,000	Fixed		25,000,000
2015 — Apr. 20	3.55500		79,600,000	Fixed		50,000,000
Apr. 20	3.58260		80,250,000	Fixed		50,000,000
Apr. 20	3.60470		79,150,000	Fixed		50,000,000
Jun. 1	3.82800		123,586,000	Fixed		85,000,000
Jun. 1	3.85310		120,718,928	Fixed		85,000,000
Jun. 1	3.97750		117,968,032	Fixed		85,000,000
Jun. 1	4.11890		117,096,000	Fixed		85,000,000
Jun. 1	4.14170		118,872,500	Fixed		85,000,000
Jun. 1	4.16550		118,490,000	Fixed		85,000,000
Jun. 1	4.39610		117,988,500	Fixed		85,000,000
Jul. 20	2.13990		82,500,000	Fixed		50,000,000
Jul. 20	3.16000		151,680,000	Fixed		100,000,000
Aug. 20	3.69150		118,462,500	Fixed		75,000,000
2016 — Mar. 20	3.31810		78,250,000	Fixed		50,000,000
Mar. 20	3.35940		156,000,000	Fixed		100,000,000
Mar. 20	3.58590		80,525,000	Fixed		50,000,000
Apr. 20	3.65360		79,620,000	Fixed		50,000,000
Jun. 1	4.08250		71,290,000	Fixed		50,000,000
Jun. 1	4.17380		119,918,000	Fixed		85,000,000
Jun. 1	4.17820		120,437,775	Fixed		85,000,000
Jun. 1	4.20600		111,240,000	Fixed		80,000,000
Jun. 1	4.33520		119,340,000	Fixed		85,000,000
Jun. 1	4.37660		120,504,500	Fixed		85,000,000
Jun. 1	4.40680		119,918,000	Fixed		85,000,000
Jun. 1	4.42300		121,728,500	Fixed		85,000,000
Jun. 1	4.45070		122,757,000	Fixed		85,000,000
Jun. 1	4.45100		120,666,000	Fixed		85,000,000
Jun. 1	4.55370		119,569,500	Fixed		85,000,000
Jun. 1	4.59180		141,600,000	Fixed		100,000,000
Jun. 1	4.59640		70,675,000	Fixed		50,000,000
Jun. 1	4.59780		119,544,000	Fixed		85,000,000
Jun. 1	4.63220		70,267,500	Fixed		50,000,000
Jul. 20	2.31510		83,125,000	Fixed		50,000,000
Jul. 20	2.36950		122,625,000	Fixed		75,000,000
Jul. 20	3.49350		77,670,000	Fixed		50,000,000
Jul. 20	3.50900		117,300,000	Fixed		75,000,000
Jul. 20	3.61430		119,070,000	Fixed		75,000,000
Sep. 20	3.52250		120,937,500	Fixed		75,000,000
Oct. 20	3.44070		79,012,800	Fixed		50,000,000
2017 — Apr. 20	4.17920		74,700,000	Fixed		50,000,000
Apr. 20	4.18880		75,225,000	Fixed		50,000,000
Jun. 1	4.00510		154,450,000	Fixed		100,000,000
Jun. 1	4.15940		153,650,000	Fixed		100,000,000
Jul. 20	4.39630		70,550,000	Fixed		50,000,000
Jul. 20	4.43500		70,510,000	Fixed		50,000,000
Jul. 20	4.48170		71,250,000	Fixed		50,000,000
Jul. 20	4.49940		114,744,000	Fixed		80,000,000
Jul. 20	4.55350		142,620,000	Fixed		100,000,000
Jul. 20	4.61860		70,875,000	Fixed		50,000,000
Aug. 20	4.40800		72,675,000	Fixed		50,000,000
Aug. 20	4.50020		142,820,000	Fixed		100,000,000
Aug. 20	4.56940		72,850,000	Fixed		50,000,000
Sep. 20	4.34100		106,087,500	Fixed		75,000,000
Sep. 20	4.36900		71,800,000	Fixed		50,000,000
2018 — Jan. 20	3.78430		72,600,000	Fixed		50,000,000
Jan. 20	3.79570		73,200,000	Fixed		50,000,000
Jan. 20	3.83400		73,750,000	Fixed		50,000,000
Jan. 20	3.85300		72,250,000	Fixed		50,000,000
Jan. 20	3.85680		145,750,000	Fixed		100,000,000
Apr. 20	3.84300		73,625,000	Fixed		50,000,000
May 20	3 month CDOR		233,040,000	Fixed		150,000,000
May 20	3 month CDOR		156,500,000	Fixed		100,000,000
Jul. 20	3 month CDOR		231,720,000	Fixed		150,000,000
Jul. 20	3.62200		155,100,000	Fixed		100,000,000
Jul. 20	3 month CDOR		154,030,000	Fixed		100,000,000
Jul. 20	3 month CDOR		155,000,000	Fixed		100,000,000

46

Unmatured Market Debt (Continued)

	Canadian dollar liability			Euro liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
Jul. 20	3.31350	$	77,950,000	Fixed		EUR 50,000,000
2019 — Jan. 20	2.83130		159,290,000	Fixed		100,000,000
Jan. 20	2.98000		157,000,000	Fixed		100,000,000
Jan. 20	2.98220		156,200,000	Fixed		100,000,000
Jan. 20	3.06030		39,485,000	Fixed		25,000,000
Jan. 20	3.14000		78,075,000	Fixed		50,000,000
Apr. 20	3 month CDOR		158,800,000	Fixed		100,000,000
Jul. 20	3.42560		77,325,000	Fixed		50,000,000
Jul. 20	3.46490		154,000,000	Fixed		100,000,000
Jul. 20	3.50510		155,100,000	Fixed		100,000,000
Jul. 20	3.58250		115,612,500	Fixed		75,000,000
Jul. 20	3.58250		153,750,000	Fixed		100,000,000
Jul. 20	3.58850		154,000,000	Fixed		100,000,000
2020 — Jul. 20	3.14150		66,750,000	Fixed		50,000,000
		$	15,992,688,518		EUR	10,890,000,000

For the cross currency swaps listed below (outstanding as of September 30, 2010), the Government’s Canadian dollar liability has been swapped into a yen liability.

	Canadian dollar liability			Yen liability
Maturity date	Coupon %	Notional amount		Basis	Notional amount
2012 — Mar. 20	1.3216	$	62,111,800	Fixed		JPY 5,000,000,000
2013 — Mar. 20	1.5875		62,874,556	Fixed		5,000,000,000
Mar. 20	1.5900		60,782,884	Fixed		5,000,000,000
2014 — Mar. 20	1.8070		60,774,648	Fixed		5,000,000,000
		$	246,543,888			JPY 20,000,000,000

NOTES:

(1)	Non-callable except as otherwise noted.
(2)	Real Return Bonds bear interest adjusted in relation to the CPI for Canada. At maturity, a final payment equal to the sum of inflation compensation from the original issue date to maturity and principal will be made. All amounts shown for these issues include the inflation compensation accrued to date.
(3)	Canada Savings Bonds offer minimum guaranteed annual interest rates and are non-callable, non-assignable and non-transferable. Canada Savings Bonds are redeemable on demand at any time with accrued interest. Issues are available in compound interest or regular interest form.
(4)	For these series of Canada Savings Bonds and Canada Premium Bonds the original maturity date was extended by 10 years, at the option of the holder.
(5)	Canada Premium Bonds are non-callable, non-assignable and non-transferable. Canada Premium Bonds are redeemable once a year on the anniversary date and during the 30 days thereafter without penalty. Issues are available in compound interest or regular interest form.
(6)	Obligations are non-negotiable, non-assignable and non-transferable. Term to maturity is 20 years, or such lesser period as may from time to time be fixed by the Minister of Finance on the recommendation of the Office of the Superintendent of Financial Institutions. Obligations are redeemable in whole or in part before maturity only at the option of the Minister of Finance; Obligations bear interest payable semi-annually at the rate fixed by the Minister of Finance, and are issued in accordance with terms and conditions set forth in an agreement (all in accordance with Section 111 of the Canada Pension Plan Act).
(7)	Converted at USD 1.00 = CAD 1.029, EUR 1.00 = CAD 1.4029 the closing rates on September 30, 2010.
(8)	Assumed by the Government of Canada on February 5, 2001, on the dissolution of Petro Canada Limited.
(9)	Of the U.S.$38,244,000 assumed by the Government of Canada, U.S.$5,000,000 was cancelled on August 31, 2004.
(10)	May not add to total due to rounding.

47

Other Obligations (with Respect to Money Borrowed)

Direct Obligations (1)

The borrowings listed below are direct obligations of agent enterprise Crown corporations which are agents of Canada and as such constitute direct obligations of the Government of Canada and are a charge on and payable out of the Consolidated Revenue Fund of Canada.

Borrowings by Agent Enterprise Crown Corporations

	Outstanding at March 31, 2010
	Canadian		Foreign
	dollar		currency		Total
	borrowings		borrowings (2)		borrowings
			(in millions)
Business Development Bank of Canada	$	987.6	$	500.1	$	1,487.7
Canada Lands Company Limited		165.0		—		165.0
Canada Mortgage and Housing Corporation		2,299.1		2,122.3		4,421.5
Canada Housing Trust		180,440.2		—		180,440.2
Canada Post Corporation		90.0		—		90.0
Canadian Commercial Corporation (3)		—		—		—
Canadian Dairy Commission (Marketing)		—		—		—
Export Development Canada		3,839.2		19,161.4		23,000.5
Farm Credit Canada		1,681.1		83.7		1,764.9
Freshwater Fish Marketing Corporation		25.3		4.0		29.4
Parc Downsview Park Incorporated		39.0		—		39.0
Royal Canadian Mint		15.5		—		15.5
Total	$	189,582.0	$	21,871.6	$	211,453.6

Source: Public Accounts of Canada 2010.

Note: Amounts may not add due to rounding.

(1)  The payment of all money borrowed by agent Crown corporations is a charge on and payable out of the Consolidated Revenue Fund. Such borrowings constitute unconditional obligations of the Government and are recorded as such in the accounts of Canada, net of borrowings expected to be repaid directly by these corporations. In practice, with few exceptions, all borrowings have been repaid by the agent Crown corporations.

(2) Foreign currency equivalent in Canadian dollars.

(3)  During the year, the Canadian Commercial Corporation was reclassified as a consolidated Crown corporation.

48

Contingent Liabilities

	At March 31, 2010
	(in millions)
Guarantees by the Government
Borrowings by enterprise Crown corporations which are agents of Her Majesty	$	211,454
Borrowings by other than enterprise Crown corporations:
From agents
Loans to Indians by the Canada Mortgage & Housing Corporation for on-reserve housing		1,220
From other than agents
Guarantee programs of the Government
Aboriginal Economic Program		—
Canada Student Loans Act		50
Enterprise Development Program		—
Farm Improvement Loans Act and Farm Improvement and Marketing Cooperatives Loans Act		99
Indian economic development		1
Loans to Indians by approved lenders for on-reserve housing		627
Regional Aircraft Credit Facility		156
Small Business Loans Act		705
Other explicit loan guarantees
National Biomass Ethanol Program		25
Insurance programs of the Government
Accounts administered for the Government by the Export Development Corporation – Insurance & related guarantees		523
Insurance against accidents at nuclear installations under the Nuclear Liability Act		582
Other explicit guarantees
Restructuring of Canadian Third-Party Asset Backed Commercial Paper (Senior Funding Facility)		1,850
Guarantees under the Agricultural Marketing Programs Act
Advance Payments Program		1,515
Price Pooling Program		18
Guarantees to holders of mortgages insured by the AIG United Guaranty Mortgage Insurance Company of Canada, Genworth Financial Mortgage Insurance Company of Canada and PMI Mortgage Insurance Company of Canada		1,468
Guarantees under Section 19 of the Canadian Wheat Board Act		1,686
Total Gross Guarantees		221,979
Less: allowance for losses		535
Net Exposure Under Guarantees	$	221,444

Source: Public Accounts of Canada 2010.

Note: Amounts may not add due to rounding.

49

Supplementary Information

Marketable Bonds (Domestic)

From October 1, 2010 through November 30, 2010, Government of Canada domestic marketable bonds outstanding increased by $10,192 million to $401,885 million. New issues and retirements during this period are detailed below.

Issue or Maturity Date	Coupon (%)		Maturity Date	Issue Amount		Maturity Amount
2010 – Oct. 1		8.75	2010 – Oct. 1		—	$	97,018,000
2010 – Oct. 12		3.25	2021 – Jun. 1	$	3,000,000,000		—
2010 – Oct. 15		1.50	2012 – Dec. 1		3,000,000,000		—
2010 – Oct. 26		3.00	2015 – Dec. 1		372,515,000		—
2010 – Oct. 29		1.50	2012 – Dec. 1		906,688,000		—
2010 – Nov. 8		2.00	2016 – Jun. 1		3,500,000,000		—
2010 – Nov. 15		1.50	2012 – Dec. 1		3,000,000,000		—
2010 – Nov. 22		4.00	2041 – Jun. 1		1,400,000,000		—
2010 – Nov. 26		1.50	2012 – Dec. 1		1,000,000,000		—

From October 1, 2010 through November 30, 2010, ten repurchase operations were held and the following bonds were purchased by the Government. Repurchased bonds are typically cancelled shortly after their settlement.

Repurchase Settlement Date	Coupon %		Maturity Date	Amount Repurchased
2010 – Oct. 7		2.75	2010 – Dec. 1	$	13,000,000
2010 – Oct. 7		1.25	2011 – Jun. 1		275,000,000
2010 – Oct. 7		1.00	2011 – Sep. 1		31,000,000
2010 – Oct. 7		3.75	2011 – Sep. 1		181,000,000
2010 – Oct. 14		1.25	2011 – Jun. 1		931,000,000
2010 – Oct. 14		6.00	2011 – Jun. 1		14,000,000
2010 – Oct. 14		1.00	2011 – Sep. 1		10,000,000
2010 – Oct. 14		3.75	2011 – Sep. 1		45,000,000
2010 – Oct. 21		2.75	2010 – Dec. 1		13,000,000
2010 – Oct. 21		1.00	2011 – Sep. 1		40,405,000
2010 – Oct. 21		1.25	2011 – Dec. 1		446,595,000
2010 – Oct. 26		3.00	2014 – Jun. 1		518,679,000
2010 – Oct. 28		2.75	2010 – Dec. 1		292,000,000
2010 – Oct. 28		1.25	2011 – Jun. 1		29,000,000
2010 – Oct. 28		6.00	2011 – Jun. 1		28,000,000
2010 – Oct. 28		1.00	2011 – Sep. 1		274,700,000
2010 – Oct. 28		3.75	2011 – Sep. 1		351,300,000
2010 – Oct. 28		1.25	2011 – Dec. 1		25,000,000
2010 – Oct. 29		1.50	2012 – Jun. 1		80,000,000
2010 – Oct. 29		3.75	2012 – Jun. 1		2,300,000
2010 – Oct. 29		3.50	2013 – Jun. 1		245,000,000
2010 – Oct. 29		3.00	2014 – Jun. 1		305,000,000
2010 – Oct. 29		5.00	2014 – Jun. 1		2,577,000
2010 – Nov. 4		2.75	2010 – Dec. 1		500,000,000
2010 – Nov. 10		2.75	2010 – Dec. 1		209,800,000
2010 – Nov. 10		1.00	2011 – Sep. 1		25,000,000
2010 – Nov. 18		2.75	2010 – Dec. 1		19,884,000
2010 – Nov. 18		1.25	2011 – Jun. 1		265,336,000
2010 – Nov. 18		1.00	2011 – Sep. 1		25,000,000
2010 – Nov. 18		3.75	2011 – Sep. 1		10,000,000
2010 – Nov. 18		1.25	2011 – Dec. 1		25,000,000
2010 – Nov. 26		3.50	2013 – Jun. 1		316,999,000
2010 – Nov. 26		3.00	2014 – Jun. 1		300,000,000
2010 – Nov. 26		5.00	2014 – Jun. 1		40,000,000
Total repurchased amount for period:				$	5,890,575,000

50

Canada Savings Bonds

CSB Series 126 issued on November 1, 2010 has a guaranteed minimum interest rate of 0.65% for the year beginning November 1, 2010. Rates for the remaining years to maturity will be announced at a future date.

Canada Premium Bonds

CPB Series 76 issued on November 1, 2010 has a guaranteed minimum interest rate of 1.10% for the year beginning November 1, 2010, 1.40% for the year beginning November 1, 2011 and 1.70% for the year beginning November 1, 2012. Rates for the remaining years to maturity will be announced at a future date.

Treasury Bills

From October 1, 2010 through November 30, 2010, treasury bills outstanding increased by $4,100 million to $174,800 million.

Canada Bills

From October 1, 2010 through November 30, 2010, Canada Bills outstanding decreased by U.S.$531,788,000 to U.S.$1,957,906,000

51