RBC Capital Markets, the top arranger of Canadian government-bond issues for seven years, saw its market share fall to its lowest level since 2007 as National Bank Financial gained on higher sales outside Quebec.

Canadian provinces, cities, municipalities and government agencies raised $95.9 billion in debt last year, 4.2% less than in 2009, according to data compiled by Bloomberg.

"Governments have had to finance larger deficits and that's what has created all the activity," said Ricardo Pascoe, executive vice president of financial markets at National Bank Financial in Montreal.

Royal Bank of Canada's investment-banking unit ranked No. 1 with 85 sales of provincial and other government-related bonds valued at $20.5 billion, according to Bloomberg data. National Bank of Canada's investment bank advanced two spots to second with $18.8 billion from 64 sales, its best showing since 2006. RBC's market share slipped 1.3 percentage points to 21.3% last year, its lowest since 2007, while National's share rose 5.8 percentage points to 19.6%.

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