The Canadian Press

The Canadian government is planning to float a new global 10-year bond issue denominated in euros.

The bond issue is the first in the European currency in almost 11 years but the second foreign-currency issue in the past year.

The government raised US$3 billion with a U.S.-dollar bond issue in September.

The Finance Department says the euro bonds will be issued in the near future pending market conditions.

A spokesman said the amount to be raised and the interest offered have yet to be determined.

Scotiabank economist Derek Holt notes the conditions couldn’t be better for Ottawa to raise money, given the strength of the loonie and likelihood the Canadian currency will gain in value going forward.

As well, Canadian government debt has been given the highest investment-grade rating by Standard & Poor’s and Moody’s Investors Service.

An official with the department said the bond issue is to diversify the government’s foreign reserve holdings, and that Ottawa finances its ongoing programs through the domestic market.

Canada’s borrowing requirements have increased as a result of federal and provincial budget deficits amid recession-related stimulus spending and lower revenue.

Ottawa is on track to record a $56 billion deficit this fiscal year and is projected to add about $170 billion to the national debt over five years.