Event Highlights
Canadian Fixed Income Conference
September 28-29, 2021
Session 1
By Bloomberg Live
The 9th annual Bloomberg Canadian Fixed Income Conference convenes the biggest names in Canadian bonds, credit, commodities, and more, in a two-day virtual event on September 28-29, 2021.
As world economies seek to rebuild after the Covid-19 pandemic, these conversations have seldom been more relevant and timely. We gathered top investors, analysts, CEOs, CFOs, government officials, and bankers to discuss everything from insurance to real estate to mining to ESG to economics and more.
Day One Session I features panels and interviews with government officials and supranationals and discussing their views of the current economic landscape, funding strategies and investment opportunities.
Click here to view video of today’s event.
Speakers included:
- Amaro Cosme, Director, Funding Management and Investor Relations, Treasury, CDPQ
- Christine Dacre, Chief Financial Officer, TransLink
- Eusebio Garre, Head of Funding, IDB Invest
- Eric Girard, Minister of Finance, Quebec
- Laura Fan, Head of Funding, Treasury Division, IADB
- Scott Fielding, Minister of Finance, Manitoba
- Edward Hankins, Director, Treasury Office, York Region
- Zauresh Kezheneva, Funding Officer, International Finance Corporation (IFC)
- Randy LeClair, Director, Capital Markets, Toronto
- Nik Nanos, Executive Chairman, Nanos Research Group of Companies
- Khawar Nasim, Acting Consul General, Consulate General of Canada in New York
- Bob Rae, Permanent Representative of Canada to the United Nations
- Selina Robinson, Minister of Finance, British Columbia
- Travis Toews, Treasury Board President & Finance Minister, Alberta
- Brandon Weening, Senior Vice President, Corporate Finance, OMERS
Bloomberg Moderators:
- Theophilos Argitis, Ottawa Bureau Chief
- Kait Bolongaro, Canadian Government Reporter
- Carlos Cambinada, Energy and Commodities Editor, Americas
- Derek DeCloet, Managing Director, Canada
- Eric Martin, IMF, World Bank and Trade Reporter
- Natalie Obiko Pearson, Vancouver Bureau Chief
- Sandrine Rastello, Montreal Bureau Chief
- Paula Sambo, Corporate Finance and Credit Reporter
Event Highlights:
Climate Change and U.S. Collaboration
Khawar Nasim, Acting Consul General, Consulate General of Canada in New York gave opening remarks and discussed climate change and U.S. collaboration: “The key to Canada’s future prosperity lies in talent acquisition to prioritize climate change and infrastructure. Combating climate change is integral not only to our economic recovery, but to building a more sustainable future for all of us, as we work toward our goal of zero net emissions by 2050.” “The foundation is in place to chart a joint path for prosperity and recovery for our citizens.”
Addressing the Residential Housing Shortage
Eric Girard, Minister of Finance, Quebec spoke with Bloomberg’s Montreal Bureau Chief Sandrine Rastello about the state of residential housing in Quebec. “We want to make sure before we intervene in private markets, that our intervention is going to do more good than harm. So we’ve launched a consultation process on the role of brokers, real estate, residential brokers, in order to make sure that we protect the buyers in the market. We want people to proceed with the inspection when they buy a house, to make sure that a residential real estate broker’s conduct is respecting their code of conduct. It’s bringing upward pressure in the market and it’s reducing affordability. And so we’re looking at that carefully, but we need to be sure that what we will bring in as a replacement will be better than what we have now.”
Municipal Bond Opportunities
Christine Dacre, Chief Financial Officer, TransLink, Randy LeClair, Director, Capital Markets, Toronto, Edward Hankins, Director, Treasury Office, York Region spoke with Bloomberg’s Paula Sambo, Corporate Finance and Credit Reporter on municipal bond opportunities. Christine Dacre explained that municipal bonds “Offer higher yields than government bonds but a similar risk profile. We provide liquidity and laddering for portfolios to buy or hold trade on secondary markets. We also issue green bonds for investors with ESG mandates. Edward Hankins elaborated, stating that these bonds are “more highly rated, have very good secondary market liquidity and offer a spread over similar data bonds from their home province. For example, York is a frequent issuer, holds AAA rating with S&P and Moody’s, operates a very good liquidity and has about a six basis point spread over a comparable province of Ontario. The probability of default would be minimal.”
In the final moments of the panel, Randy LeClair contextualized municipal investments during the COVID-19 pandemic, and its impact on capital and operations: “Our impact was on the operating side, and very minimal impact on capital. Our operating, given our budget size of about 14 billion, we had a budget gap to start with. If there’s a silver lining in all of this, it’s that the needs of municipalities for infrastructure were stressed. Within our five point strategy, a main one was to get to senior levels of government–provinces and federal—understand how municipalities are funded. The biggest shortfall was [loss of] revenue from transit. There was a greater understanding by those[ two] levels of government that they have to support infrastructure, municipalities and especially transit. That’s been loud and clear.
The Role of International Cooperation
Bob Rae, Permanent Representative of Canada to the United Nations spoke with Bloomberg’s Kait Bolongaro, Canadian Government Reporter about the role of the UN as an “instrument of national governance.” “There is no room in the world today for rogue behavior. Whether we are talking about COVID-19, climate change–everybody has to be a part of the solution. It’s a roundtable. International cooperation is not about replacing national governments. It’s about understanding that without it, we will face even greater instability.”
Objectives of SSA Funding and Investment Strategies
Amaro Cosme, Director, Funding Management and Investor Relations, Treasury, CDPQ, and Laura Fan, Head of Funding, Treasury Division, IADB, spoke with Kait Bolongaro, Bloomberg’s Canadian Government Reporter, about investment opportunities within their organizations. Laura Fan discussed EYE Bonds and sustainable development bonds at the IADB: “We continue to look at ways to look at our ESG bonds. We are constantly evolving, understanding the requirements for new regulations. There will be a question regarding factors that imply higher costs. However the IADB is not a profit maximizing institution. Our purpose is to improve lives in Latin America and the Caribbean and we do that by reducing poverty and inequality, in a climate friendly and sustainable manner. As I already mentioned, we subscribe to the United Nations sustainable development goals, and our corporate results framework has specific targets to achieve.”
Amaro Cosme discussed the unique opportunities ESG poses to “build investor relationships, trust, open dialogues, and exchange on best practices. Risk factors associated have been part of the risk profile assessment by rating agencies, but more and more the investors. We had conversations with investors and it was clear for us that there’s a real value to customers, to demonstrate commitment and leadership.”
The Economic Landscape in Manitoba
Scott Fielding, Minister of Finance, Manitoba, discussed the province’s investment opportunities with Theophilos Argitis, Bloomberg’s Ottawa Bureau Chief. “We are anticipating GDP growth to be somewhere around 5% this year.” Yet in certain sectors, Fielding agreed, labor shortages are a bigger problem than unemployment. One specific concern in the region is the drought-like conditions, which has had two impacts: first is on agriculture and livestock. In response, Manitoba worked with the federal government to partner with livestock producers. Second is in the hydro-power sector. With less water flowing over the turbine, there has been an impact on the net income of Manitoba’s hydro-electricity crown corporation. “We need to see how much precipitation we get over the next two months. But we’ve built enough in our contingencies from a government point of view to address those types of issues. So we’re on track so far.”
The Economic Landscape in Alberta
Travis Toews, Treasury Board President & Finance Minister, Alberta discussed the province’s investment opportunities with Carlos Cambinada, Bloomberg’s Energy and Commodities Editor. On the efforts to diversify the economy given the price of oil Minister Toews states, “It’s a priority of the government and Albertans to see diversification as part of our economic recovery plan. [The plan] looks to position this province for disproportionate investment attractions in economic diversification. Early results are encouraging in the tech industry. In 2020, Alberta doubled our venture capital investment attraction to almost 500 million dollars. Big tech companies choose Alberta for their head offices: we have a very young educated demographic, world-class institutions, a relatively low cost of living and a competitive business environment.”
More on Objectives of SSA Funding and Investment Strategies
We heard from Brandon Weening, Senior Vice President, Corporate Finance, OMERS, Eusebio Garre, Head of Funding, IDB Invest, Zauresh Kezheneva, Funding Officer, International Finance Corporation (IFC), who explored investment opportunities for sovereign supranational and agencies with Eric Martin, Bloomberg’s IMF, World Bank and Trade Reporter. To start off, Zauresh Kezheneva explained the needs of clients in pandemic recovery. “The current challenge is to ensure that there is a resilient recovery for our clients by helping them with production of vaccines, or distribution of vaccines, or unlocking some new investment opportunities. So, resilient recovery for our clients and helping our clients to achieve. It is probably one of the key challenges and opportunities for us as an institution. I would also say from the institutional perspective, another challenge and opportunity is working on smooth transition to new alternative reference rates.”
Brandon Weening offered insight on OMERS’ approach to ESG in the asset management industry. “First, we integrate ESG considerations through the investment lifecycle, be it underwriting through asset management, development, operations, and then finally upon exit. We also believe in engagement. We engage frequently and often with our investing companies. In the public equity space, we engage our infrastructure and private equity investments through our seats. Third, collaboration: meeting with like minded institutional investors across the globe to advance the standards around ESG. Fourth, adaptation: this space continues to change, so too does OMERS approach.”
Finally, Euesbio Garre offered audiences the advantages of IDB invest bonds, as a “unique opportunity for investors to add diversification to their portfolios, with high-quality bonds, that have transparent, environmental and social impact in economies in Latin America and the Caribbean.
The Economic Landscape of British Columia
Selina Robinson, Minister of Finance, British Columbia, discussed investment opportunities in British Columbia with Natalie Obiko Pearson, Bloomberg’s Vancouver Bureau Chief. “It’s more than a service based economy. We have a tech sector growing in leaps and bounds. We’ve launched NBC, a strategic investment fund, investments in agritech. There’s a real opportunity that is starting to burgeon–It’s a good place to live, it’s a good place to work, it’s a good place to invest so that people have good paying jobs that don’t just serve us here in British Columbia that can be exported right around the world”
Debrief on the Election
Nik Nanos, Executive Chairman, Nanos Research Group of Companies explored the results of Canada’s recent election with Theophilos Argitis, Bloomberg’s Ottawa Bureau Chief. Nanos offered insights on why the conservatives failed to break through. “In most democracies, if it were a popular vote, they would have won. But the challenge for the conservatives is that the distribution of their support, the math and structure of the vote, did not work in their favor.”
In the big picture, Nanos stated that “ My research suggests that Canadian values are immutable: When there’s prosperity, they want to be able to reap the benefits of their hard work. So I would say that Canadians are pragmatic based on the situation. They can embrace either more right-wing policies or more left-wing policies because the vast majority of Canadians are in the center.”
The Bloomberg Canadian Fixed Income Conference was Proudly Sponsored By
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