Canadians raised money during the first months of the pandemic – .

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Canadians raised money during the first months of the pandemic – .


The Royal Canadian Mint produced fewer coins during the pandemic, but Canadians kept their banknotes, especially larger denominations

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OTTAWA – The pandemic may have seen an increase in the use of credit and debit cards, as well as payment options like Square, but Canadians are not giving up on cash.

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In fact, the Bank of Canada, which prints the bills, says there was $ 17 billion more in circulation last year than before the pandemic, suggesting Canadians are sitting on a treasure trove of money. money.

Bank of Canada spokesperson Raewyn Passmore said Canadians continue to use and appreciate physical currency and don’t see a big change from cash anytime soon.

“Cash remains popular among Canadians, and for the foreseeable future, the bank will continue to provide Canadians with banknotes they can use with the utmost confidence.

The Bank of Canada estimates that people were holding onto their money in 2020. The amount of money in circulation was $ 83 billion before the pandemic, but it reached over $ 100 billion by the end of 2020.

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Cash remains popular among Canadians

spokesperson for the Bank of Canada

Many retailers encouraged credit or debit payments or even stopped accepting cash during the pandemic. The bank noted that the greatest demand was for the higher denomination banknotes, 50 and 100, suggesting that Canadians kept money as a sort of savings account under their mattresses during the first days of the pandemic.

Canadians were withdrawing more money during this time and depositing less in banks, but these trends began to stabilize at the end of 2020.

Surveys by the Bank of Canada in November 2020 showed that cash was used for about 22% of purchases, a number that has been stable for years, but it was used for 40% of purchases under 15 $.

Marie Lemay, president of the Royal Canadian Mint, which makes circulation coins like loons and toonies, said they had seen demand drop. They shipped 365 million coins, from various denominations in 2019 and 338 million in 2019, but overall demand for cash remained strong.

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Lemay said they expected the final numbers for 2021 to be similar, as many businesses were on hold for much of the year and switched to online payments.

The Mint has a coin management system to track demand and most of the coins used by traders and consumers are recirculating coins, but every year some coins come out of the system stored in piggy banks or others. savings. It is the role of the Mint to create new coins to cover the difference.

“There is a delta between the coins that were at the start of the year, they are circulating in the economy, and what is missing, we fill it with new coins,” she said.

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She said they saw a 37% drop in demand for parts, but didn’t have to make up that difference because they had a good idea of ​​the need. She said when businesses opened in parts of the country it resulted in an increase, but overall they were able to manage.

She said other countries have not been as successful in pointing the finger at the United States where shortages have occurred due to high demand.

“They produced 25% more parts than last year and they had parts shortages, we produced fewer parts and we didn’t have a parts shortage. “

Lemay said research from the Mint showed that the use of cash varies widely across regions and demographics, with older and lower-income people being much more likely to use hard currencies.

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“The relationship with the use of money is not equal across the board and there are so many differences,” she said.

The Mint has several lines of business, including collector coins, circulation coins for other countries, and a precious metals business, including the manufacture of gold and silver bullion. Lemay said these businesses have remained stable during the pandemic.

The savings of Canadians increased dramatically at the onset of the pandemic.

Even though layoffs skyrocketed in those first few months, benefit programs like the Canadian Emergency Response Benefit more than made up for the overall wage loss and gave Canadians a $ 10 raise. 8% of their disposable income.

With everything closed, spending also fell 13.7% overall, bringing the amount of disposable income Canadians saved to 28.2% in the second quarter of 2020, from just 7.6% in the first quarter of 2020. 2020.

Earlier this year, Statistics Canada reported that in 2019, the net savings were $ 1,157 per household. But in the first three quarters of 2020, households saved $ 10,507.

In addition to the physical money the bank prints, the bank also issued billions of dollars in government bonds during the pandemic as the government added hundreds of billions in new debt.

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