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Posted: September 20, 2025
This week, we’re returning to the economic side of the struggle for Palestinian liberation, while also mixing in some Working Class University economics education. We will be learning about government bonds, bond markets, and how ‘Israel’ uses government bonds to get foreign citizens/entities, including Canadians, to finance their genocidal ethnostate.
So first off, what are bonds? A bond is a fixed-income investment product, which means you know what the return will be if you hold the bond for its lifetime. When an individual buys a bond, they are lending money to a government or private company at a pre-set interest rate, for a predetermined amount of time (5 years, 10 years, 30 years, etc.). After the time period is up, the government or company must pay back the face value (the initial loan amount), as well as the interest according to the pre-agreed rate and timeline. Bonds are debt instruments, with governments and companies able to borrow this money from bondholders on the presumption that bondholders will be ‘made whole’ (repaid with interest) at the end of the bond’s lifetime. This is different from stocks, which are equity instruments. Stockholders own a percentage of the company, entitling them to dividends from future profits/revenue, as long as they hold the stock, and the company survives. As fixed-term, fixed-income debt instruments, bonds are typically less risky than stocks, with lower potential gains or losses. Government bonds are how the state finances deficit spending. The money borrowed from bondholders is necessary when state revenue is not enough to cover state expenses. These yearly deficits add up to ‘The Deficit,’ or the state’s total national debt.
So then what is the bond market? Here, we need to differentiate between the primary market and secondary market. The primary market is where new bonds are issued, with the government or company selling the new bonds (fresh debt) directly to bond buyers. The secondary market is where existing bonds can be bought and sold, similar to how stocks are traded on a stock exchange. Investors can buy these bonds through a broker, or the bonds may be packaged as a component of pension funds, mutual funds, and life insurance policies (due to their lower risk). But if bonds are fixed-income, fixed period investments, why would someone buy them on the secondary market? Because a bond’s yield (return on investment) fluctuates while the bond is outstanding.
If you buy a bond on the primary market, and hold it to maturity, the yield is just the interest rate discussed above, also called the coupon rate. However, on the secondary market, what’s relevant is the bond’s current yield. This is the bond's interest/coupon rate divided by the market price (either above, at par, or below face value) for which it can be bought/sold. So as the bond price changes on the secondary market, the bond's current yield also changes. The bond price on the secondary market changes based on the likelihood that the bondholder will be paid back upon the bond’s maturity. When a bond isn’t paid back at maturity, this is called default, and default risk is a main factor that moves bond prices in the secondary markets. The riskier the debt, the higher the bond price, as investors want a higher return for investments that are more likely to default. A recent example of government default was in Sri Lanka in 2022. Additionally, bond yields increase with longer maturity (longer periods are inherently more risky). Bond prices are also generally sensitive to interest rate changes, changing inversely with rate movement.
Now that we’ve got a better understanding of bonds, let’s see how ‘Israel’ is using them to borrow from allied nations (including private citizens) to finance its genocidal state war machine, with an emphasis on the Canadian context. ‘Israel’ Bonds, or the Development Corporation of ‘Israel,’ is the global name for various entities that sell ‘Israeli’ government bonds overseas, with locations in the USA, Canada, Mexico, Brazil, France, the UK, and Germany. As anti-imperialists, we shouldn’t be surprised by the settler colonial or imperial nature of every one of these states. ‘Israel’ is simply the latest iteration in five centuries of European settler colonialist imperialism, driven by the relentless expansionary economic logic of capitalism, and financed by deficit spending. Canada-Israel Securities, Limited (CISL) is the Canadian entity responsible for selling Israel Bonds on behalf of the Israeli Ministry of Finance. CISL has locations in Toronto, Montreal, Ottawa, Vancouver, Calgary, Edmonton, and Winnipeg, which market and sell these bonds.
Before we get to the extent of ‘Israel’ Bond sales in Canada, let’s quickly ground some of the theoretical concepts about bonds we just learned in real world economic data. From data from Trading Economics, we can see that the 10 Year ‘Israeli’ government bond reached a maximum yield of 5.179% on July 2, 2024, and a minimum yield of 0.425% on March 4, 2020. The 30 Year bond, meanwhile, reached a maximum yield of 5.665% on July 3, 2024, and a minimum yield of 1.205% also on March 4 2020. Yields were at their lowest when the bonds were the least risky (right before the economic impacts of the COVID pandemic reached the majority of the world in March 2020). They were their highest when the bonds were most risky (near the end of the failed May-July 2024 Rafah Offensive, yet another military failure for ‘Israel during the Gaza genocide). Additionally, the 30 Year yield is always slightly higher than the 10 Year yield, because of longer periods’ inherent risk.
According to the 2024 ‘Israeli’ filing with the US Securities and Exchange Commission (SEC) regarding ‘Israel’ Bonds, as of December 31, 2024, there was $439M CAD in outstanding ‘Israel’ bonds. This includes 33 bond issues, dating back to Jan. 2015, with maturity dates ranging from Jan. 2025 to Dec. 2039. While this is dwarfed by ~$7B in outstanding US dollar-denominated ‘Israel’ bonds, we need to ground this $439M CAD amount in the overall Canadian context.
Thanks to the reporting from The Maple, highlighted in the excellent Arms Embargo Now report on ongoing Canadian military exports to ‘Israel,’ we can see that ‘despite the Canadian government’s 8 January 2024 announcement of a pause on new permit approvals’ Global Affairs Canada’s (GAC) 2024 report of military exports ‘documents $18.9[M] in direct military exports to Israel under 164 permits.’ This includes $2.2M in munitions, $12.5M in electronic equipment, and $2.8M in military aircraft and aircraft equipment. While this $18.9M is obviously direct military exports, I don’t think it’s unreasonable to conclude that 'Israel' as it currently exists no longer has any civilian/non-military expenses; its sole existential purpose is genocidal imperialism. That means that, beyond $18.9M in direct government support, Canadians and Canadian entities have lent the genocidal ‘Israeli’ state more than 23x that much through the purchase of ‘Israel’ Bonds. This is a perfect example of how imperialist states use our ignorance of financial markets to covertly fund (and profit from) genocide.
For a deeper look at ‘Israel’ Bonds in an American context, particularly relating to state and local government bond purchases, check out this great article from the International Consortium of Investigative Journalists.
You can find the Socialist Economics for Worker Power Handbook here, and begin putting it to work in your organization or union right away, to build class consciousness and sharpen class struggle.