It's not 100% clear, but basically in February they were to have an auction of $12 to $18 billion and another similar auction in May, August, and November. If you add up those totals, it would be as much as $72 billion worth of two-year bonds. I guess what interests me here is that they're only issuing $12 to $18 billion worth of 10-year bonds and $16 billion worth of 30-year bonds. In other words, they're issuing more than twice as much debt through two-year bonds as they are through 10- and 30-year bonds combined. This probably sounds a little bit arcane to the listener, but what strikes me is that now that we have such low interest rates, doesn't it stand to reason that we would want to lock in longer-term borrowing rather than shorter-term borrowing?
The debt we are auctioning now will come to terms in two years. If interest rates go up in, say, five years, then the record low rates that we enjoy right now will be of no value, because we will have extracted all of the benefit of it in simply 24 months. If we were to lock in on a 10- or a 30-year bond for a larger share of the debt offerings, then we would be able to take advantage of these lower interest rates for a generation.
Can you explain why it is? I know you don't speak for Finance Canada's debt strategy, but can you perhaps give us some idea why they might have done that?