Province raises funds without US banks amid tariff tensions and growing foreign borrowing plans
Ontario raised US$2bn last week in a US-dollar bond sale that excluded American banks for the first time in nearly 14 years.
The 10-year bond issue was led by Barclays PLC alongside Canadian banks BMO Capital Markets, Canadian Imperial Bank of Commerce, and Bank of Nova Scotia.
According to the Financial Post, this marked Ontario’s first greenback bond since January and the first time since July 2011 that US banks were not included.
Since then, the province has conducted about 40 such transactions, often involving Bank of America Corp., Goldman Sachs Group Inc., or JPMorgan Chase & Co.
The most recent bond in January had Bank of America on the deal, and JPMorgan participated in a September issue.
The Ontario Financing Authority (OFA), which manages the province’s debt issuance, directed questions to the finance ministry.
Colin Blachar, a spokesperson for the ministry, stated that the deal “was part of regular bond rotation and US banks were in no way deliberately excluded.”
He added, “Bond issuance is run through the Ontario Financing Authority (OFA), which is an arms-length organization to government.”
The province plans to borrow nearly $60bn in this fiscal year to fund its budget deficit. It expects up to 30 percent of that—nearly $13bn—to come from foreign markets.
With widening budget deficits due to the economic slowdown, other provinces are also expected to increase borrowing.
JPMorgan’s chief executive Jamie Dimon said in April that the firm had already lost “a couple” of bond deals tied to the uncertainty around tariffs, though he did not specify which ones.
Alberta similarly issued a US$1.4bn bond in April without Bank of America’s involvement—a first in six years.
Alberta said the move was not a blanket ban but aligned with its broader rejection of US goods and services following the introduction of tariffs.
Ontario Premier Doug Ford has publicly criticized US President Donald Trump’s tariffs, which have targeted sectors such as automotive and steel—both key to Ontario’s economy.
In March, Ford’s government announced measures limiting public-sector procurement from US businesses.
It also ordered the removal of US-made wine and liquor from store shelves and committed to using Canadian-made materials in government infrastructure projects.
However, the policy did not prohibit the OFA from awarding new business to US financial institutions.
Ontario’s unemployment rate rose to 7.9 percent in May, up more than a percentage point compared to the same month last year.
The province is home to manufacturing plants operated by General Motors Co., Honda Motor Co., and others, along with significant steel production, all of which have been affected by US trade measures.
Meanwhile, British Columbia continues to work with US banks.
It issued a US$2.5bn US-dollar bond this week with Bank of America and Citigroup Inc. as part of its syndicate, and also completed a euro bond transaction with JPMorgan last month.
A spokesperson for BC’s finance ministry said the province’s participation in the US-dollar global bond market can involve US banks among the lead managers.
“[This] can include US banks among the lead managers and support competitive and efficient access to international US dollar investors,” the spokesperson said, adding it also helps with secondary market performance.
