Ok this post is in the form of a naive question. And it goes like this: If the Federal Government can borrow (MMTers don’t vide your back-end here, I know they do not have to go to the bond markets) at around 3% and the provinces are stuck borrowing at around 4- 4.5 % on new issues and at an average rate of around 6 – 6.5% if not higher; then why does not the Federal government use its good name and do a massive bond issue at 3% use the proceeds to buy out the provinces’ debt at say 3.5% and net o.5+% on the deal?
To simplify the question. What stops the federal government from using its good name to act as an intermediary and capture a revenue stream while cutting the servicing costs of the provinces?
NB the 6- 6.5% was a guess based on the structure of outstanding debt not the average present rate. (HT Andrew for the clarification)
Relentlessly Progressive Political Economy 
Good question. I have asked it before. and if the Euro zone has to have a common fiscal policy why dont we have one. I think your bond speads are tooo hgih though – but finding good data is hard
On the spreads. I was looking at the structure of Newfoundland’s debt and they have several in the 7-11 range. So yes probably for the other provinces the spreads are lower. The last issue in Ontario went at somewhere around 4.2%. Which seems crazy high given my mortgage is lower than that.