When the Bank of Canada conducts liquidity operations (such as term repos, or "purchase and resale agreements" (PRAs) as they are called in Canada), we are merely changing the distribution of liquidity in the financial system by changing the composition of our balance sheet.
When we do term repos, we aim to hold fewer government treasury bills, 3 which means that the private sector would hold more. 4 We are injecting liquidity where the system had generated it before, essentially by exchanging less-liquid assets for more liquid ones.