Canada 'sleepwalking' into cashless society, consumer advocates warn

A consumer group is urgently calling on the federal government to follow other jurisdictions in the U.S and Europe and bring in legislation to stem the slide toward a cashless society.

Only 10 per cent of transactions in Canada today are done using cash, according toCarlos Castiblanco, an economist with the groupOption Consommateurs.

"There is a need to protect cash right now before more merchants start refusing[it]," Castiblancorecently toldCBC Radio'sOntario Today.

It's critical to act now, he added, before retailersbeginremoving all of the infrastructure required to store and maintain physical money.

"They are already used to dealing with cash," he said. "So this is the moment to act, before it is more complicated."

In a report called"Will cash be a thing of the past?",Option Consommateurspublished one of the first deep divesinto who is still using coins and paper money.

'Solid demand'for cash

A recent online poll of some 1,500 peoplecommissioned by a different group, Payments Canada, found thata majority of respondents were worried about the prospect of cashless storesand want to maintain the option to use cash which is free from bank fees, isn't susceptible to privacy breachesand can be used during internet outages.

"There's still very solid demand for cash," Sharon Kozicki, the deputy governor of the Bank of Canada, said in a recent interview with CBC.

The bank closely trackshow money gets used, shesaid, with the use of cash actually risingat the beginning of the COVID-19 pandemic.

While thatgrowth has slowed, Kozicki said there's still an "overall general increase that suggests people still want it."

Even a report commissioned by the Bank of Canada suggests it's time to protect access to money.

That report, titled "Social policy implications for a less-cash society," recommends legislativeaction, arguing thatcash-based transactions have plummetedfrom 54 per cent in 2009 to 10 per cent as of 2021.

One of its authors, Aftab Ahmed, described who would be most affected by a world with no cashin a recent article inPolicy Options, the online magazine for theInstitute for Research on Public Policy.

"For many such as Indigenous peoples, unhoused individuals, older Canadians, victims of domestic abuse and others who are vulnerable cash is a beacon of economic security, a source of financial autonomy, an emergency lifeline and an emblem of cultural traditions," Ahmed wrote.

"Canada must avoid sleepwalking into a cashless future and instead recognize the risk of exacerbating financial exclusion of those most vulnerable."

Other cities, countries taking steps

The issue has caught fire outside Canada, Castiblancosaid, with severaljurisdictions beginning to legislate to protect access to cash.

In 2019, Philadelphia became the first city in North America to prohibit "a person selling or offering for sale consumer goods or services at retailfrom refusing to accept cash as a form of payment."

Other U.S. cities, includingNew York, Seattle andLos Angeles, have since moved ahead on the issue.

In New York, the regulation proposes fines of up to $1,500, with the councillor who sponsored the rules declaring that aban on cashless businesses protects privacy, equity and consumer choice.

European countries like Norway, Spain, and Ireland have introduced similar laws. InIreland, the law would require a cash option at businesses like pharmacies and grocery stores that sell essential products and services.

LISTEN | Why do you still need cash?:

Ontario Today51:39Why do you still need cash?

Your calls with Ron Delnevo, the head of group in the United Kingdom trying to stop the slide into a cashless society. Also, joining us, Carlos Castiblanco, an conomist with the consumer group, Option-Consommateurs, which used a federal grant to create a recent report called: "Will Cash Soon be a thing of the past?" It's recommendations include an urgent call on legislators to protect access to cash before we sleepwalk into a society that leaves out a lot of Canadians.

'We need urgent action now'

Consumer groups in the United Kingdom such asPayment Choice Allianceare pushing that country to follow Ireland's model.

"I think that we need urgent action now," the alliance's spokesperson, Ron Delnevo,toldOntario Today.

The group is calling for new rules in the U.K. by the end of 2025.

"We feel if it goes beyond that, there [will be] so many businesses not accepting cash," Delnevo said. "Cash will be so difficult to access that the whole [cash-based system] will fall down."

Delnevo saidCanadians can take a lesson on the power of consumer action in his country.

"MPsin our Parliament have been inundated with mail from the public, and they are reacting to that," he said. "So don't let the politicians put their hands over their ears and not listen. Tell them what you want."