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Bonds in Canada

A bond is a tool that businesses, governments and other organizations use to borrow money. More specifically, it is a loan agreement through which the bond issuer (the borrower) agrees to pay the lender a specified amount by a certain date. Bond agreements generally also include interest payments. While the borrower usually pays the lender interest on the loan, bonds sometimes have negative interest, meaning the lender pays interest to hold the bond. Bonds and debt financing are important tools for funding large infrastructure projects and wars. (See Canada Savings Bonds; Victory Loans.)


Debt in Canada

A debt is something that one owes to another. While debt can take many forms, the term usually refers to money owed. In a Canadian context, debts have become an increasing concern during the past three decades. According to Statistics Canada, at the end of the first quarter of 2019, Canadian businesses, governments and households owed about $6.4 trillion in debts. That works out to roughly $170,000 per person. (See also Public Debt.)


Capital in Canada

In economics, capital traditionally refers to the wealth owned or employed by an individual or a business. This wealth can exist in the form of money or property. Definitions of capital are constantly evolving, however. For example, in some contexts it is synonymous with equity. Social capital can refer to positive outcomes of interactions between people or to the effective functioning of groups. Human capital refers to people’s experience, skills and education, viewed as an economic resource.