Spreads

A spread (aka., credit spread) is the difference between a government Treasury security and a non-Treasury credit instrument.

Take the difference between 5-year fixed mortgage rates and the yield of a 5-year government bond, for example.  This number is a commonly quoted “mortgage spread.” 

The reason spreads exist in the first place is quite simple.  In the case of a mortgage spread, it's because mortgage lenders must offer a higher return (i.e.  rate, or yield) on their mortgages than the government does.  That, in turn, is because a lender's credit risk is higher than the government of Canada's.