News in Brief

Reflections on Cash in Canada

A recent article by RBC ¹ demonstrated that in Canada the use of cash as a proportion of GDP decreased from 4.8% in 1961 to 2.9% in 1981. From then until about 2008/9 it held steady at about the 3% level. Since then it has risen steadily reaching 4.4% in 2021. No doubt the global financial crisis kickstarted the increase, and the pandemic has seen it surge further, but it is not clear why cash continued to increase between these events.

Canadian payment diaries show cash transactions falling from 54% in 2009 to 22% in 2020. The data suggests that cash is being used to store value just as e-commerce and the ease of digital payments erode transactional use.