OTTAWA â€” A federal budget billed as helping Canadians better navigate the modern-day economy cashed out Wednesday on a 71-year-old program that used to be a cornerstone of helping people plan for their future.
The federal government is eliminating the venerable Canada Savings Bonds program, for generations a beacon of savings for Canadians keen to sock away a few dollars or teach their children a thing or two about managing money.
The program costs more to run than the benefits it brings in, and has become out of date in an era of wide-ranging, more effective savings tools, the government said in the spending blueprint unveiled Wednesday.
Maybe so, but the news came as a blow to many on social media.
“My parents paid for my education by investing baby bonus cheques in Canada Savings Bonds,” tweeted London Free Press columnist Wayne Newton, one of several people who called the bonds instrumental in funding their education.
Others were less sentimental.
“But what about the war effort?” John Campea joked on his Facebook feed. “How will we fund those new Super Hornets?”
The savings bond dates back to 1946, building on the success of the Victory Bonds campaign that enlisted prudent, frugality-minded Canadians to help pay for the war effort. At the height of its popularity in the late 1980s, the bonds accounted for $60 billion in government debt, about 45 per cent of the total.
This year, the outstanding bonds total about $5 billion, or less than one per cent of total federal market debt. Sales this year are expected to be about $1 billion compared with about $15 billion three decades ago.
Only about 115,000 people are expected to buy the bonds this year, government officials say.
“This decline in the program’s popularity can be attributed to the proliferation of higher-yielding alternative retail investment instruments, such as government of Canada insured retail products,” the budget documents said.
A 2015 evaluation of the program by the Finance Department had suggested the program be wound down, noting there were other vehicles for Canadians to save.
But in their heyday, the bonds were a popular tool, particularly with those who bought them through small, weekly workplace deductions.
“Canada Savings Bonds bite the dust at age 71. I remember selling them with a 19.5 per cent coupon in 1981,” wrote David Baskin on Twitter.
“Relic of a bygone era.”
All outstanding bonds will continue to be honoured, the government said.
The Canadian Press