Taking the pulse of Canada’s financial system

Risks to households, businesses and markets remain

As we said in our May 2020 Financial System Review, the longer the pandemic affects jobs and incomes, the greater the risk of financial trouble for households and businesses. In the early days we also saw strains on the functioning of financial markets. Six months later, we have a better idea of the impacts of COVID‑19.


Government income support programs and loan deferral initiatives offered by financial institutions helped households get through the initial crisis. People were able to keep paying their debts, and we’re seeing lower levels in household and consumer debt. This is cause for optimism.

Going forward, we will keep a close eye on household debt levels, especially with interest rates remaining low for the foreseeable future.


The pandemic severely affected many businesses across Canada. Businesses relying on in-person contact suffered most, including those in:

  • transportation
  • arts and entertainment
  • accommodation and food services

Government wage and rent subsidies have helped keep bankruptcy filings low, but we’ll need to watch how more localized shutdowns affect the long recovery.

Market functioning

With uncertainty high, it is vital that markets keep functioning well to support what households and businesses may need down the road.

The Bank put in place asset purchase programs and liquidity facilities at the start of the pandemic, and these have kept the financial system running smoothly. We’ve since been able to end some of these programs. But we can and will start them up again if the need arises.

News – Bank of Canada