It wasn’t that long ago, when at the start of the COVID-19 pandemic, we saw such a ridiculous demand for items such as toilet paper, gloves, and hand sanitizer, that it caused shortages in supplies across North America. Five months later and now there’s another item we can add to the list of things being hoarded by Canadians across the county.
In a recent statement, the Bank of Canada reported it is facing a shortage of $50 bills due to the COVID-19 pandemic and signs point to Canadians holding on to cash as a primary reason.
“We still have $50 banknotes 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.”
When Bank of Canada recently examined the relationship between COVID-19 and the demand for banknotes, their data pointed to a sharp increase in the number of notes in circulation starting in about mid-March (when the effects of the pandemic really began to hit Canada). It adds that $20 and $50 bills were the most popular.
Considering several businesses over the past few months (including Loblaws, Metro, and Tim Hortons) are encouraging customers to avoid cash payments— not to mention many other businesses are flat out refusing it all together— it seems the reason so many Canadians are pulling out cash isn’t to spend the money but rather to ensure they have their own emergency supply of cash.
As Melissa Leong wisely pointed out:
“During the early days of the pandemic, there was so much unknown and an unprecedented amount of fear and uncertainty not just in the economy but the world that people reacted like it was a zombie apocalypse. “There was distrust of everything including institutions and that resulted in behaviour such as hoarding cash which is a tangible symbol of safety and security.”
The question we are now asking is why is it that only the $50 bills are in shortage?