The Bank of Canada devotes considerable energy to tracking the money supply, and in connection with this role it’s been carefully documenting Canadians’ growing love affair with plastic. Every so often it unearths some startling data.
The latest issue of the Bank of Canada Review, released on Thursday, reports that both the volume and value of old-fashioned money transactions has been on a steady decline since the early 1990s as consumers warmed up first to credit cards, then debit cards and more recently online payments. Last year total cash purchases were just $100-billion, compared to $180-billion for debit cards and more than $300-billion for credit cards. But here’s the thing. Even while money is going electronic, Canadians are increasingly holding onto their cash.
According to the Bank of Canada, the value of bank notes in circulation has been increasing at an annual rate of 5% since 2000, roughly the same as total growth in personal spending.