John Carpay:

The Bank of Canada has made no secret of its efforts to explore a Central Bank Digital Currency (CBDC), which could lead to the abolition of cash.

Cash remains essential to protect the rights and freedoms of Canadians, including their privacy, security, and autonomy. In a cashless economy, all transactions are digital, and therefore subject to surveillance and government interference. CBDC opens the door for governments to reward or penalize Canadians for their personal choices about how to live, where to go, and what to do with the money they have earned. Governments can use CBDC to restrict when, where, and what people are allowed to buy, leading to a level of control resembling China’s notorious social credit system.

A cashless economy means that banks, credit card companies, and even governments are in a position, at all times, to know about every purchase, sale, investment, and donation made by every Canadian. A government, once armed with this knowledge, is in a strong position to exercise stringent control over much of its citizens’ lives.

Cash means privacy and confidentiality.

If I use cash to pay for gas for my car, then no bank, credit card company, or government will know that I was (for example) at the Shell station on Southland Drive in Calgary at 8:45 a.m. on Monday, March 10, 2025. If, three hours later, I use cash to pay for a meal at a restaurant in Edmonton, no corporation or government will know that I travelled from Calgary to Edmonton that morning.

It’s true that most Canadians prefer using debit and credit cards over cash. However, with the option to use cash, Canadians preserve their right to choose privacy, security, autonomy, and financial independence.

By tracking my expenses, banks and credit card companies acquire vast amounts of information about my geographical locations at various moments in time, and about my spending habits. However, banks and credit card companies do not use coercive power to control my behaviour or my personal choices, as the Chinese government does with its citizens.

Governments differ radically from banks and credit card companies. By definition and by their very nature, governments exercise coercive power over citizens. This is a good thing when governments enforce Criminal Code prohibitions against murder, theft, and terrorism. However, governments also use their coercive power to violate human rights, civil liberties, and constitutional freedoms, always in the name of advancing some ideology. Power corrupts, and absolute power corrupts absolutely, hence our Constitution is intended to protect citizens from tyranny.

China already uses a “social credit” system to reward citizens who support (or who do not oppose) the Communist Party and its rules and policies. Those who criticize the Communist Party can find themselves unable to board a train, plane, or subway, or denied a bank loan, or prevented from enrolling their children in the best schools and universities.

We saw an ugly example of this in Canada in February 2022. The federal government froze the bank accounts of hundreds of Canadians whose only “crime” was donating money to a peaceful protest movement which the prime minister of the day disliked intensely. These Canadians had not violated anti-terrorism legislation or any other laws. Cash alone made it possible for these victimized Canadians to buy groceries, pay their heating bills in winter, and secure other necessities. If CBDC had been in place in February 2022, the government’s freezing of bank accounts would have inflicted far more harm on these citizens.

What government (or politician or bureaucrat) can be trusted to resist the temptation to use a CBDC as a tool to control citizens? When cash is outlawed and replaced with a CBDC, the government has a powerful tool to exercise ultimate – and very intimate – control over the lives of Canadians.

A CBDC poses a grave threat to Charter rights and freedoms. Hopefully, CBDC will become an issue in the next election. Hopefully, political parties and candidates will commit to preserving the right of Canadians to use cash.

John Carpay is president of the Justice Centre for Constitutional Freedoms, which has released a new report that explains CBDC’s potential impact on Canadians’ rights and freedoms, including privacy, autonomy, security, equality, and access.