The Globe and Mail
Ori Freiman, Anwar Sheluchin, Jordan Mansell and John McAndrews are researchers at the Digital Society Lab at McMaster University.
As Canada contemplates a major shift in its monetary system with the potential introduction of a digital Canadian dollar, a crucial voice is missing from the conversation: yours.
Conservative MP Ted Falk recently introduced Bill C-400, which aims to ensure continued access to cash across Canada and includes a provision that would prohibit the Bank of Canada from issuing a digital form of the dollar. Though the bill is unlikely to pass under the current Parliament, it offers a rare opportunity to deepen our understanding of the future of money and rethink democratic participation in decision-making.
A digital Canadian dollar (or central-bank digital currency) would be a new form of money issued by the Bank of Canada. Unlike the digital money we currently use, which is a liability on commercial banks, the digital Canadian dollar would be a direct liability on the central bank, like physical cash, but in digital form.
From May 8 to June 19, 2023, the Bank of Canada conducted an online public consultation on a digital Canadian dollar, which garnered more than 89,000 responses nationwide. This consultation took the form of a survey that was open to everyone. Public consultations are widely used by governments, but self-selection means that those who participate may not always be representative of the general population – something the bank acknowledged in its report.
In an effort to obtain a more representative sample of the Canadian population, the Digital Society Lab at McMaster University conducted a replication study in March, 2024, drawing insights from more than 2,600 Canadians. Participants were recruited from an online panel provided by the research firm Vox Pop Labs, with the goal of mirroring the population on select socio-demographic and political characteristics.
Our preliminary results found substantial differences between the results of the central bank’s public consultation and those of the Digital Society Lab’s more representative sample. For instance, 87 per cent of the Bank of Canada’s sample reported being familiar with the concept of a digital Canadian dollar, whereas only 23 per cent of our sample said the same. Additionally, our findings suggest that the public may have much more trust in the central bank’s ability to issue a secure digital dollar than those who participated in the public consultation. Moreover, our survey found Canadians may be more open to using a central-bank digital currency in the future than the bank’s report suggests.
These preliminary findings point to the possibility that participants in the Bank of Canada’s consultation may disproportionately oppose this new form of money as compared with the general population. Public consultations in general tend to receive outsized engagement from people who are particularly interested in the subject matter at hand. This suggests that many of those who are paying close attention to debates about a digital dollar are against the idea. But the results of the public consultation don’t give us much indication as to why.
Conservative Party Leader Pierre Poilievre, a noted critic of the idea of a digital dollar, has signalled his support for Bill C-400, suggesting that it protects the privacy and freedom of Canadians. But there has otherwise been little public debate or engagement from federal elected officials on this important subject.
A digital Canadian dollar, if implemented, could potentially enable government surveillance of financial transactions, but if designed properly, it could serve as a tool to prevent against such risks. If such a currency is developed, it should reflect our collective values, priorities and concerns.
We are at a pivotal moment: Regardless of whether one agrees with Bill C-400 or not, this discussion offers an opportunity to deepen public understanding of our monetary system and its potential future, while also fostering a more informed and participatory democracy in the process.
The necessity of a digital Canadian dollar is itself a subject of debate. Proponents argue it could improve payment efficiency and protect monetary sovereignty in an increasingly digital world. Critics contend that existing digital payment systems already meet most needs, and a central-bank digital currency could potentially disrupt the banking sector, compromise privacy and pose a threat to democracy.
To move forward responsibly, we must ensure meaningful public engagement on this topic – and our study suggests that we have a long way to go. The decision whether to issue a digital Canadian dollar isn’t just a technical or economic one – it would have an impact on every Canadian and the very fabric of our society. Our currency symbolizes our sovereignty and shared economic life. Its future should be shaped not just by experts and officials, but by all Canadians. It’s time for them to join the conversation.