Canada Secures Third-Lowest Borrowing Costs Among G7 Nations

Canada's borrowing costs have improved significantly among its G7 peers, making it the third-lowest in the group after Germany and Japan. The country's 10-year government bond yield stood at 3.54 percent as of July 29, 2026, compared to 4.61 percent in the US.

This borrowing cost advantage matters for Canada's economy, particularly during a time when it needs stronger investment and productivity growth. Lower yields also benefit households through lower fixed mortgage rates and reduce the risks associated with the renewal of mortgages taken out during the exceptionally low-rate environment of 2021 and 2022.

The Canadian government's fiscal restraint has played a crucial role in achieving this advantage. Canada's central government debt-to-GDP ratio fell to around 52 percent by 2024, making it the only G7 nation with a lower figure than in 1995. In contrast, other advanced economies, including the US, have seen their debt levels soar.