Cash is Thriving in Canada
Cash use in Canada is rising and demand for notes and coins remains buoyant as its economy processes the shock of 2020. The Bank of Canada’s latest report shows 80 percent of citizens have no plans to go cashless, and the number of people saying they already have is in decline.
The report states, by the end of 2020, the value of circulating banknotes reached $100 billion, up from $83 billion before the pandemic. High-denomination notes contributed the most to this rise. People’s cash-on-hand holdings saw a slight decrease over the year, but remained comparable at a median $80 versus $85 in April 2020.
Earlier in the pandemic, there was a sharp spike in withdrawals, driven by demand for $50 and $100 bills. As has been seen in many other economies—and throughout history—Canadians responded to a crisis by turning to the dependability of cash: a reliable store of value, and an essential payment option should others become unavailable due to infrastructure failures.
Use of all payment methods (by percentage of people using them) was stable or rising in November 2020 compared with July of that year, with cash seeing the largest increase. 59 percent of Canadians said they had used cash for transactions in November, up five percent from July and 23 percent from April, when it reached a low of 36 percent. Notes and coins are seeing the highest usage for low-value sales, accounting for 40 percent of transactions under $15.
This increase [in cash transactions] continues the trend of growing cash use after initial lockdown measures were lifted in the summer, even after the second wave of the pandemic began in the autumn.
The share of people stating they had gone cashless decreased from 14 percent in July to 12 percent in November. The Bank also says the results of its surveys suggest ‘some respondents might overestimate the extent to which they are cashless’.