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Bank of Canada survey reveals 86% of Canadians opposed to creating digital ‘dollar’

Published

12 months ago

5 minute read

From LifeSiteNews

By Anthony Murdoch

The main findings show that Canadians place a ‘high value on holding cash that is backed by their central bank and want to maintain access to bank notes.’

An overwhelming majority, 86% of Canadians, are opposed to the creation of a national digital dollar and want the government and banks to “leave cash alone,” according to results from a recent Bank of Canada (BOC) survey concerning the creation of a “potential digital Canadian dollar.”

In a press release yesterday, the BOC published the feedback it got concerning the creation of a “potential digital Canadian dollar.” The bank says it has been collecting information since 2020 with “stakeholders in the financial sector and civil society.”

The main findings from the BOC’s survey show that Canadians place a “high value on holding cash that is backed by their central bank and want to maintain access to bank notes.”

“Canadians value their right to privacy and many expressed concerns that a digital dollar could compromise that right,” the BOC said about another main finding from its report.

The BOC noted that should a digital dollar be created, it “should be easily accessible and should neither add barriers nor worsen existing ones.”

“A digital dollar should not add to financial stability risks,” the BOC said.

The survey, which was open from May 8 to June 19, 2023, received 89,423 responses. A total of 87% of respondents said they were “aware” of talk concerning the creation of a digital dollar.

The survey results come after the BOC in August admitted that the creation of a central bank digital currency (CBDC) is not needed as many people rely on “cash” to pay for things. The bank concluded that the introduction of a digital currency would only be feasible if consumers demanded its release.

Canadians prefer cash as the best payment method, but bank has not fully ruled out digital dollar

A total of 88% of respondents said they were not interested in the creation of an additional “offline” payment method such as an offline digital dollar in addition to cash.

While 85% of respondents said they would not use a digital dollar, 12% said they would, with 3% being uncertain.

Of important note is that the BOC has not ruled out the creation of a digital dollar despite the report’s findings.

The BOC said it “aims to ensure that Canadians will continue to have the benefits of money issued by the central bank in an increasingly digitalized world.”

“Whether and when a digital dollar will become needed is uncertain. Ultimately, the decision to go ahead with a digital dollar belongs to Canadians, through their representatives in Parliament,” the BOC said.

As reported by LifeSiteNews in May, the BOC was looking for public feedback on whether such a form of digital currency, which experts have warned could mean an end to purchasing anonymity, would be viable for Canadians.

Overall, the report found that when all answers were combined, the creation of a digital dollar garnered 86% negative feedback.

According to the BOC, a CBDC would have to offer “compelling advantages to motivate these consumers – particularly the typical, well-connected consumers who account for most of the market — to adopt and use CBDC at sufficient scale to generate widespread merchant acceptance.”

Digital currencies have been touted as a way by some government officials to replace traditional cash.

As noted in a report from LifeSiteNews, experts warn that central bank digital currencies are a “control tool” of governments.

Conservative leader Pierre Poilievre promised that if he is elected prime minister, he would stop any implementation of a “digital currency” or a compulsory “digital ID” system.

The BOC at the time said that any final decision on when and if a digital Canadian dollar is issued would be up to the government.

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Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

Published on November 21, 2024

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From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

Author:

Tegan Hill
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Alberta

Alberta fiscal update: second quarter is outstanding, challenges ahead

Published on November 21, 2024

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Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.

Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.

The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.

Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.

“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”

Nate Horner, President of Treasury Board and Minister of Finance

Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:

  • $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.
  • $125 million to address enrollment growth pressures in Alberta schools.
  • $847 million for disaster and emergency assistance, including:
    • $647 million to fight the Jasper wildfires
    • $163 million for the Wildfire Disaster Recovery Program
    • $5 million to support the municipality of Jasper (half to help with tourism recovery)
    • $12 million to match donations to the Canadian Red Cross
    • $20 million for emergency evacuation payments to evacuees in communities impacted by wildfires
  • $240 million more for Seniors, Community and Social Services to support social support programs.

Looking forward, the province has adjusted its forecast for the price of oil to US$74 per barrel of West Texas Intermediate. It expects to earn more for its crude oil, with a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.

After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.

Revenue

Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:

  • $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
  • $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.

Expense

Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.

Surplus cash

After calculations and adjustments, $2.9 billion in surplus cash is forecast.

  • $1.4 billion or half will pay debt coming due.
  • The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.

Contingency

Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.

Alberta Heritage Savings Trust Fund

The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.

  • The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.

Debt

Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.

  • Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.

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