TORONTO —
The Bank of Canada is facing a shortage of $50 bills due to the COVID-19 pandemic and signs point to Canadians hoarding cash as a primary reason.
In a statement, the Bank of Canada said the shortage will not impact the consumer’s ability to withdraw cash, but rather it may require banks to alter their cash orders to incorporate other denominations.
“We still have $50 bank notes in stock, but the order adjustments were made in order to maintain adequate inventories throughout the next few weeks,” the statement reads.
“This adjustment is due to the larger-than-expected demand over the past few months, and ahead of our regularly scheduled stock replenishment expected by the end of summer. This measure, which only affects the $50 denomination, is temporary and will be lifted as soon as possible.”
The Bank of Canada could not specify why the demand has increased for the $50 specifically, but it released a staff discussion paper earlier this month that shows there was a spike in demand for all bank notes — though $20 and $50 bills were in highest demand — in April and May, compared to the past five years.
The report indicates likely three reasons for the increase in notes in circulation:
Precautionary measures from banks to increase their cash inventories during the pandemic;
Banks also drew more money to compensate for disruptions to the flow of cash from retailers affected by the pandemic; and,
an increased demand for bank notes from consumers.
In the statement, the Bank of Canada said it believes the increase in consumer demand “was significant.”
Furthermore, the report indicates that Canadians were holding on average $22 more in cash during the pandemic, compared to the same months last year, while 35 per cent of Canadians decreased their overall cash use.
Another 30 per cent of respondents said they did not use cash at all, but a “significant proportion of these respondents had cash on hand,” according to the report.
Even though Canadians are withdrawing more cash, there are fewer places to spend it. Several businesses over the past few months, including Loblaws, Metro and Tim Hortons, are encouraging customers to avoid cash payments, while other businesses are refusing it all together.
“While the economic shutdowns and increased use of online retailing are currently diminishing cash’s traditional function as a medium of exchange, it seems that this is being more than offset by panic driven hoarding of banknotes,” the report states.
In the U.S., pandemic hoarding, combined with businesses refusing cash, has led to a shortage of coins. This shortage led to the foundation of the U.S. Coin Task Force, which is meant to “identify, implement, and promote actions to reduce the consequence and duration of COVID-19 related disruptions to normal coin circulation.”
The Spain-based Banco Bilbao Vizcaya Argentaria (BBVA) has issued a warning against hoarding money during the pandemic, citing consumers lose a layer of protection that a bank provides and it increases security risk to the consumer.
TORONTO – Ontario is pushing through several bills with little or no debate, which the government house leader says is due to a short legislative sitting.
The government has significantly reduced debate and committee time on the proposed law that would force municipalities to seek permission to install bike lanes when they would remove a car lane.
It also passed the fall economic statement that contains legislation to send out $200 cheques to taxpayers with reduced debating time.
The province tabled a bill Wednesday afternoon that would extend the per-vote subsidy program, which funnels money to political parties, until 2027.
That bill passed third reading Thursday morning with no debate and is awaiting royal assent.
Government House Leader Steve Clark did not answer a question about whether the province is speeding up passage of the bills in order to have an election in the spring, which Premier Doug Ford has not ruled out.
This report by The Canadian Press was first published Nov. 7, 2024.
