Non-bank financial intermediation in Canada: a pulse check


Bank-like activities that are exempt from banking regulations have often been called shadow banking. A more accurate but less interesting name is non-bank financial intermediation (NBFI). The Bank of Canada monitors NBFI, particularly activities and entities that involve a significant amount of maturity, liquidity and credit transformation.12 These transformations are often associated with financial leverage and represent the key channels through which risk can spread across the Canadian financial system.

Despite the shadowy reputation implied by its nickname, NBFI provides a valuable alternative to traditional banking. It fosters innovation, enhances competition, caters to underserved market segments and promotes financial system efficiency. However, non-bank financial entities are excluded from the prudential supervision and capital requirements that apply to traditional deposit-taking institutions (DTIs).3

The Bank’s most recent NBFI update (Bédard-Pagé 2019) covered data until the end of 2017. Section 1 of this report provides an update on the NBFI sector for 2018 and 2019 and compares its growth with that of the overall Canadian financial system.

The Bank and Statistics Canada have continued to improve the quality of data for NBFI subsectors. Section 2 highlights entities and channels that have benefited from these efforts—namely financing companies and mortgage investment corporations (MICs)—and how these entities are connected with the broader Canadian banking sector.

The COVID‑19 pandemic has had a widespread impact on the Canadian financial system, and the NBFI sector has not been immune. A thorough review of the effect of the COVID‑19 pandemic on the entire Canadian NBFI sector will be available only in 2022 due to lags in the publication of data. However, we have preliminary data for the first half of 2020 for non-bank investment dealers and investment funds, two subsectors that account for more than half of Canadian NBFI assets. Section 3 describes the effect of the pandemic on these two subsectors.

Key data insights

  • Canada’s NBFI sector experienced robust growth over 2018 and 2019 (an annual average growth rate of 8 percent), in line with the rest of the financial system.
    • Non-bank investment dealers were the fastest-growing NBFI subsector (an annual average growth rate of 20 percent), while investment funds remained the largest NBFI subsector (45 percent of NBFI assets).4
    • Financial assets of MICs have undergone a significant data revision, doubling from the 2017 estimate, but the market share of outstanding mortgages issued by MICs remains small, at 1.4 percent.
    • New data show that financing companies have experienced strong growth since 2008 (an annual average growth rate of 5 percent).
  • The COVID‑19 pandemic substantially affected the growth of assets within the non-bank investment dealer and investment fund subsectors during the first half of 2020.
    • Assets of non-bank investment dealers grew at a much slower pace than those of prudentially regulated investment dealers because the Office of the Superintendent of Financial Institutions (OSFI) relaxed leverage restrictions to help prudentially regulated investment dealers intermediate financial markets.
    • Assets of fixed-income mutual funds declined by more than 6 percent in the initial stage of the crisis and recovered only slowly thereafter; in contrast, fixed-income exchange-traded funds (ETFs) continued to benefit from robust growth.

1. Overview of the Canadian non-bank financial intermediation sector

At the end of 2019, Canada’s NBFI sector stood at $1.71 trillion, 17 percent larger than it was at the end of 2017. Even though Canada’s NBFI sector has experienced strong growth since the global financial crisis, its share of financial system assets relative to that of DTIs has remained stable over time (Chart 1). The trends in the Canadian NBFI sector are similar to those in other advanced economies.5

Non-bank investment dealers greatly contributed to the growth in NBFI assets: their assets have increased by 43 percent since 2017 (Chart 2). Investment funds continue to be the largest NBFI subsector, accounting for nearly half of all NBFI assets, with fixed-income funds representing 63 percent of investment funds (Chart 3).

Chart 1: The relative share of assets held by non-bank financial intermediaries has remained stable

Sources: Statistics Canada, Ontario Securities Commission, Morningstar, IHS Markit, DBRS, Investment Industry Regulatory Organization of Canada and Bank of Canada calculationsLast observation: 2019

Chart 2: Growth in non-bank financial intermediation has been driven by investment dealers

Sources: Statistics Canada, Ontario Securities Commission, Morningstar, IHS Markit, DBRS, Investment Industry Regulatory Organization of Canada and Bank of Canada calculationsLast observation: 2019

Chart 3: Investment funds continue to be the largest non-bank financial intermediation subsector

Chart 3: Investment funds continue to be the largest non-bank financial intermediation subsector

Sources: Statistics Canada, Ontario Securities Commission, Morningstar, IHS Markit, DBRS, Investment Industry Regulatory Organization of Canada and Bank of Canada calculationsLast observation: 2019

Box 1: Has the non-bank financial intermediation sector been growing in importance as a source of credit?

Non-bank financial intermediation (NBFI) entities are a valuable alternative source of credit to the Canadian economy. However, they are exempt from prudential regulation, making them more vulnerable to a build-up of risks. If Canadian households and businesses rely increasingly on NBFI financing, it could raise concerns about their access to credit in times of stress. In this box, we take a first look at whether the share of credit provided by the NBFI sector to the economy has increased.

NBFI entities meet the demand for credit from Canadian households and businesses in two ways:

  • directly, though private lending, which consists of financial corporations and investments funds using their own resources to extend loans and purchase marketable securities
  • indirectly, through private securitizations, which involves financial corporations collateralizing pools of consumer and business loans (e.g., credit card receivables, home‑equity loans, trade receivables and commercial mortgages) into marketable asset‑backed securities, increasing the velocity of NBFI credit

NBFI entities are a significant source of credit for households and businesses. At the end of 2019, the NBFI sector provided:

  • households with $113 billion in mortgage debt and $102 billion in consumer debt
  • businesses with $183 billion in business loans and $209 billion in marketable debt6

Nonetheless, NBFI’s share of outstanding credit has either declined or remained steady since the global financial crisis (Chart 1‑A). This implies that other players such as traditional deposit-taking institutions and long-term institutional investors have provided credit at an even faster pace. An increased reliance on foreign lenders could also explain the stagnant share of NBFI financing for Canadian marketable debt securities. Our NBFI estimate does not include non-financial private sector debt issued in foreign currency, a significant portion of which could be extended by foreign NBFI entities.

For more information on the growing use of foreign credit markets by the Canadian non-financial private sector, see Vulnerability 4 in the 2019 Financial System Review Fragile corporate debt funding from certain markets.

Chart 1‑A: Despite strong post‑crisis growth in assets, non-bank financial intermediation's share of outstanding private debt has declined or remained steady

Annual data

Chart 1‑A: Despite strong post‑crisis growth in assets, non-bank financial intermediation's share of outstanding private debt has declined or remained steady

Sources: Morningstar, Ontario Securities Commission, DBRS, Statistics Canada and Bank of Canada calculationsLast observation: 2019

2. Financial corporations engaged in lending: better data, better perspectives

Financial corporations engaged in lending is a $427 billion subsector of the NBFI account, making up almost 25 percent of NBFI assets (Chart 3). This subsector comprises various entities, such as mortgage finance companies (MFCs), MICs and financing companies. (Figure 1).7 Over the past few years, Statistics Canada has updated its NBFI economic account to provide better balance sheet data for these different types of entities.

Figure 1: Structure of Statistics Canada’s non-bank financial intermediation account

Source: Statistics Canada

For the first time, the Bank’s report on NBFI includes insights on financing companies (Section 2.1). Moreover, because Statistics Canada refined its data framework, we update our analysis of MICs to reflect better estimates (Section 2.2). Finally, we examine the interconnectedness between the traditional banking sector and entities in the Financial corporations engaged in lending subsector (Section 2.3).

2.1 Financing companies—old entity type, new dataset

Financing companies extend non-mortgage loans to individuals and businesses. Examples include pawn shops, crowd-funded debt platforms, loans by vendors of big-ticket household items, and credit cards issued by non-DTIs. Box 2 describes the methodology Statistics Canada uses to identify financing companies for the NBFI account.

Box 2: Aspects of financing companies that fall under non-bank financial intermediation

Determining whether a financing company’s entities or activities should be classified as a NBFI can be difficult. Figure 2‑A illustrates how prudential regulation and characteristics such as leverage, liquidity and credit transformation play a role in determining if an entity or activity falls under financing companies.

Figure 2‑A: Financing companies’ decision tree

Figure 2‑A: Financing companies’ decision tree

Figure 2‑A helps explain why a loan underwritten by a pension fund with a captive clientele is not considered NBFI while the same loan extended by a private investment vehicle or corporation could be NBFI, depending on that entity’s business model (contingent on leverage and/or short-term funding).

Financing companies’ assets stood at $26 billion at the end of 2019, 73 percent more than their 2008 level and 14 percent higher than they were in 2017 (Chart 4). Their leverage is limited at 4x their assets‑much lower than in 2008 (Chart 5). Overall, the sector accounts for a relatively small share of Canadian consumer lending.

Although the impact of the COVID‑19 pandemic on financing companies is yet to be fully determined, early evidence suggests that financing companies were negatively affected in two ways. First, some financing companies, such as payday loan companies and non‑DTI credit card companies, experienced growth in their portfolio of non-performing loans. Second, these companies also saw their ability to generate income reduced because regulators in several provinces capped the maximum interest rate they could charge on pre-existing and newly issued loans. This could affect the ability of financing companies to provide credit in the short term.

Chart 4: Since 2008, financing companies' assets have grown by 73%

Note: Other assets include currency and deposits, debt securities, mortgages, other financial assets and non-financial assets.
Sources: Statistics Canada and Bank of Canada calculations Last observation: 2019

Chart 5: Since 2008, leverage has declined and liquidity remains stable

Note: Leverage measured as assets divided by equity. Liquidity is measured as currency and deposits and short-term paper divided by total assets.
Sources: Statistics Canada and Bank of Canada calculationsLast observation: 2019

2.2 Reassessing the size of mortgage investment corporations

The 2019 NBFI report discussed the business models and relative footprint of MFCs and MICs.8 Because data for MICs were revised significantly, we provide an update.9

The revised data suggest that total financial assets held by MICs were around 95 percent larger than estimated in the 2019 NBFI report. However, the market share of outstanding mortgages issued by MICs remains small, at 1.4 percent (Chart 6). At the end of 2019, financial assets held by MICs had grown on average by 8 percent over 2018 and 2019 (Chart 7).

Chart 6: Mortgage investment corporations' market share of outstanding mortgages remains small

Note: This is based on the mortgages held on the entities' balance sheets, which includes both residential and commercial mortgages. Quasi-banks include credit unions, caisses populaires and trust and loan companies.
Source: Statistics CanadaLast observation: 2019

Chart 7: Total financial assets of mortgage investment corporations have grown rapidly since the global financial crisis

Source: Statistics CanadaLast observation: 2019

While MICs hold a small market share at the national level, their activities are highly concentrated in large urban centres and in riskier mortgage products.10 The strong growth of MICs has been accompanied by slightly increasing leverage, particularly since 2015 (Chart 8). Nonetheless, leverage is significantly lower in MICs than in traditional DTI sources of mortgage financing.

Chart 8: MIC leverage has increased while liquidity has steadily declined

Note: Leverage is measured as assets minus corporate claims divided by equity. Liquidity is measured as liquid assets divided by financial liabilities
Sources: Statistics Canada and Bank of CanadaLast observation: 2019

While data to assess the impact of COVID‑19 on MICs are not yet available, market intelligence suggests that MICs were broadly resilient. Although MICs typically extend credit to riskier borrowers, most borrowers who deferred payments have now begun making payments again (Gravelle 2020). This speaks to the effectiveness of government support programs implemented to sustain household income during the pandemic.

Some MICs initially froze redemptions in the spring at the same time as some investors requested a return of their capital. However, discussions with MICs and provincial regulators suggest that this was done pre-emptively to prevent a rush to the exit. Nearly all MICs have now resumed redemptions; in fact, some are reporting an increase in investor contributions.

2.3 Private lenders and the Canadian banking sector—a tale of interconnectedness

The Financial corporations engaged in lending subsector of NBFI accounts for only $427 billion of overall lending activity in the Canadian financial system. This suggests that the subsector poses little systemic risk. However, the subsector may indirectly contribute to systemic risk through interconnectedness with other entities within both the NBFI sector and the traditional banking system. Interconnectedness is considered a structural vulnerability in the Bank of Canada’s risk and vulnerabilities assessment framework (Christensen et al. 2015). Assessing this indirect link is therefore also important.

In this subsection, we present data that the Bank began collecting to measure interconnectedness between the NBFI sector and domestic systemically important banks (DSIBs). DSIBs are a small source of financing for private lenders. In the fourth quarter of 2019, direct lending by DSIBs to private lenders stood at $12 billion, accounting for less than 1 percent of total assets held by DSIBs (Chart 9). However, a degree of variance exists across banks, with the largest variability observed for credit extended to auto-financing companies. Given the size of these exposures, a stand-alone failure at an NBFI lending entity would not likely trigger a systemic risk event for the Canadian banking sector. Nonetheless, an indirect impact on pricing and the availability of sectoral lending would likely occur. We will continue to monitor how interconnectedness evolves over time in response to changes in economic conditions and the regulatory environment.

Chart 9: DSIBs' exposure to private lenders is small, but some variation exists across banks

Chart 9: DSIBs' exposure to private lenders is small, but some variation exists across banks

Note: Excludes reverse repurchase agreements and securities borrowed. DSIB stands for domestic systemically important bank.
Sources: Office of the Superintendent of Financial Institutions and Bank of Canada calculations Last observation: 2019

3. A sneak peek at how the pandemic affected the non-bank financial intermediation sector

The onset of the COVID‑19 pandemic and the ensuing lockdowns around the world placed the global financial system under severe strain, and the NBFI sector was no exception (FSB 2020b). Data are not yet available to understand the full impact of the pandemic on the NBFI sector as a whole. However, we have preliminary data covering the first half of 2020 to explore the effects of the pandemic on two key NBFI subsectors:

  • non-bank investment dealers
  • investment funds

The COVID‑19 shock clearly provided further evidence on the role that interconnectedness within the financial system plays in the propagation and amplification of shocks.

3.1 The impact of the COVID‑19 pandemic on investment dealers

The NBFI sector includes non-bank investment dealers because they rely on leverage and employ maturity, liquidity and credit transformation—using shorter-term, liquid funding while holding longer-term, illiquid assets on their balance sheet. Non-bank investment dealers are classified into three subsectors:

  • institutional dealers—firms that provide services such as trade execution, equity research and investment banking, which account for 53 percent of all non‑bank investment dealer assets
  • retail dealers—firms that provide similar services as institutional dealers but for smaller clients such as individuals or small or medium-sized enterprises, which account for 39 percent
  • trading venues and platforms—firms that facilitate the exchange of securities, which account for the remaining 8 percent

Through the first half of 2020, non-bank investment dealer assets increased from $167 billion to $179 billion. However, bank investment dealer assets increased proportionally more, resulting in a decline in the share of non-bank investment dealers from 22 to 19 percent (Chart 10).

Chart 10: The share of assets held by non-bank investment dealers has fallen

Sources: Investment Industry Regulatory Organization of Canada and Bank of Canada calculations Last observation: June 2020

Non‑bank investment dealer leverage increased from 4.6x in December 2009 to 16.4x in February 2020, driven primarily by the growth in client margin accounts and matched-repo business at institutional dealers.11 However, in response to the COVID‑19 pandemic, non‑bank investment dealers reduced their leverage to 13.4x by the end of June. In contrast, bank investment dealers increased their leverage from 19.2x to 21.6x between February and June 2020, partly supported by temporary adjustments to the regulatory measure of leverage (OSFI 2020).

3.2 The impact of the pandemic on investment funds

The COVID‑19 pandemic affected investment funds differently according to the type of fund and assets held. Money market fund assets increased considerably through the crisis. This reflects the belief that money market funds are a safer alternative to non-cash ETFs and mutual funds in times of market stress.

The assets of fixed-income, commodity and mixed ETFs grew by 13 percent during the first half of 2020, attracting a record $9 billion of new investor capital over this stressful period (Chart 11). This is because ETFs trade on exchange, which makes them attractive to institutional investors as price discovery tools and substitutes for their underlying assets.12 Trading in fixed-income ETFs also surged to unprecedented levels globally because investors rebalanced their holdings, hedged their portfolios and managed their risk.

Chart 11: Money market funds and exchange-traded funds grew faster than fixed-income mutual funds did during the crisis

Note: AUM stands for assets under management.
Sources: Morningstar Direct and Bank of Canada calculations Last observation: June 30, 2020

In contrast, the assets of open-ended fixed-income mutual funds experienced a cumulative decline of more than 6 percent at the peak of the crisis, and investors did not fully reverse their cumulative outflows until mid‑June. Open‑ended funds invest cash from investors into less-liquid assets while offering daily redemptions to these investors. This liquidity transformation is why open‑ended funds are considered non-bank financial intermediaries. Liquidity transformation makes open‑ended funds vulnerable to sudden redemption requests from their investors, which was seen in the spring of 2020.

The Bank launched extraordinary liquidity programs and asset purchase facilities in response to the COVID‑19 shock. These measures helped keep redemptions below levels that could have been difficult for portfolio managers to meet. Other organizations also took measures that helped manage large liquidity demand from investors. Notably, the Canadian Securities Administrators temporarily increased the limit of allowable short-term borrowing from 5 to 10 percent of a fund’s net asset value to give bond fund managers additional flexibility to manage redemption requests (Ouellet Leblanc and Shotlander 2020).

3.3 The relationships between NBFI and other financial system participants played a role in the March 2020 market liquidity stresses

The NBFI sector represents a small fraction (10.9 percent) of the Canadian financial system. However, its implications for financial stability can be wide‑ranging. This is because actions taken by NBFIs can interact with those of other financial system participants. For instance, when mutual funds sold fixed‑income securities in response to significant redemptions at the end of March, other entities, such as insurance companies, also sold fixed‑income securities. At the same time, DSIBs, which typically provide liquidity in fixed-income markets, were unable or unwilling to purchase the amount of bonds needed to support the selling from this wide range of market players concurrently because they were facing other demands for liquidity (e.g., from businesses tapping their credit lines). This combination of actions placed severe stress on fixed-income markets, as illustrated by the dramatic and broad-based widening of fixed‑income spreads (Fontaine et al. 2021). The impact of the COVID‑19 pandemic on market liquidity in the spring of 2020 clearly illustrates that it is important to monitor developments in the NBFI sector but also to understand the interconnections that link financial system participants (both NBFI and banks) to each other to better assess how vulnerabilities and shocks can lead to instability.

  1. 1. For more information see Gravelle, Grieder and Lavoie (2013).[]
  2. 2. For more information on entities and activities that fall under NBFI, see the Appendix.[]
  3. 3. Most NBFI entities are subject to securities regulation or other forms of industry-specific self-regulation that cover market conduct, licensing and transparency requirements. However, these rules and standards are not deemed equivalent to risk-based prudential supervision such as the Basel III framework.[]
  4. 4. Non-bank investment dealers may buy and sell securities for their own account or execute trades on behalf of clients. They may also provide services such as equity research and investment banking. These entities are not consolidated into another financial conglomerate that is subject to prudential supervision equivalent to Basel III.[]
  5. 5. For more information, see FSB (2020a).[]
  6. 6. Business loans include non-residential mortgages. Marketable debt includes bonds, commercial paper and other debt instruments issued by Canadian non-financial corporations.[]
  7. 7. For more information, see Statistics Canada (2021).[]
  8. 8. For a full discussion on the differences between MICs and MFCs, see Bédard-Pagé (2019) and Coletti, Gosselin and MacDonald (2016).[]
  9. 9. For more information, see Statistics Canada (2019).[]
  10. 10. As noted in the Bank of Canada Financial System Review—2019, private lenders account for a non-negligible share of new residential mortgages in the Greater Toronto Area.[]
  11. 11. In matched-repo business, a broker extends cash to clients (reverse repos) funded through the repo market. This approach ensures parity between assets and liabilities.[]
  12. 12. See Arora et al. (2020) for more information on the discrepancies observed between fixed-income ETFs and their underlying assets during the COVID‑19 crisis.[]


Category Entities/Activities Characteristics
Investment funds
  • Money market mutual funds
  • Fixed-income and alternative-strategy mutual funds
  • Fixed-income and synthetic exchange-traded funds
  • Credit hedge funds
  • Credit pooled funds
Investment funds engage in liquidity and maturity transformation by purchasing less-liquid assets with longer-dated maturities, while offering investors the ability to redeem shares with short notice.
Financial corporations engaged in lending
  • Mortgage finance companies
  • Mortgage investment companies
  • Consumer and business transportation leasing companies
  • Other leasing companies
  • Financing companies
Financial corporations engaged in lending (also known as private lenders) provide loans outside the prudentially regulated sector. They generally have internal underwriting capabilities and obtain funding through securitization and other market-based financial instruments. They use varying degrees of leverage.
Repurchase agreements and securities lending
  • Repurchase agreement transactions with one non-prudentially regulated counterparty
  • Securities lending transactions with one non-prudentially regulated counterparty
Repurchase agreements and securities lending transactions are susceptible to runs, particularly when there is a significant amount of collateral transformation. These transactions can also facilitate the buildup of leverage and lead to asset fire sales if they unwind unexpectedly.
Private-label securitization
  • Commercial mortgage-backed securities
  • Asset-backed securities
  • Asset-backed commercial paper
  • Private residential mortgage-backed securities
Securitization facilitates a chain of credit intermediation and can include a material degree of liquidity and maturity transformation.
Non-bank investment dealers
  • Independent investment dealers that are not owned by prudentially regulated deposit-taking institutions
Non-bank investment dealers usually finance their activities through the wholesale market. They use a significant amount of leverage.


For their valuable comments and suggestions, we thank Virginie Traclet, Don Coletti and Stephen Murchison. For their editorial and graphics support, we thank Nicole van de Wolfshaar, Himawan Sudarso and Qianqian Sun. We also thank Statistics Canada and the Ontario Securities Commission for their expertise and contributions. The other reports in the series are:

  1. Emerging from the Shadows: Market-Based Financing in Canada,” James Chapman, Stéphane Lavoie and Lawrence Schembri, Bank of Canada Financial System Review, June 2011
  2. Monitoring and Assessing Risks in Canada's Shadow Banking Sector,” Toni Gravelle, Timothy Grieder and Stéphane Lavoie, Bank of Canada Financial System Review, June 2013
  3. Monitoring Shadow Banking in Canada: A Hybrid Approach,” Bo Young Chang, Michael Januska, Gitanjali Kumar and André Usche, Bank of Canada Financial System Review, December 2016
  4. Non-Bank Financial Intermediation in Canada: An Update,” Guillaume Bédard-Pagé, Bank of Canada Staff Discussion Paper No. 2019-2, March 2019


  1. Arora, R., S. Betermier, G. Ouellet Leblanc, A. Palumbo and R. Shotlander. 2020. “Concentration in the Market of Authorized Participants of US Fixed-Income Exchange-Traded Funds.” Bank of Canada Staff Analytical Note No. 2020-27.
  2. Bank of Canada. 2019. Bank of Canada Financial System Review—2019.
  3. Bédard-Pagé, G. 2019. “Non-Bank Financial Intermediation in Canada: An Update.” Bank of Canada Staff Discussion Paper No. 2019-2.
  4. Christensen, I., G. Kumar, C. Meh and L. Zorn. 2015. “Assessing Vulnerabilities in the Canadian Financial System.” Bank of Canada Financial System Review (June): 37–46.
  5. Coletti, D., M.-A. Gosselin and C. MacDonald. 2016. “The Rise of Mortgage Finance Companies in Canada: Benefits and Vulnerabilities.” Bank of Canada Financial System Review (December): 39–52.
  6. Financial Stability Board. 2020a. Global Monitoring Report on Non-Bank Financial Intermediation: 2020.
  7. Financial Stability Board. 2020b. Holistic Review of the March Market Turmoil.
  8. Fontaine, J.-S., C. Garriott, J. Johal, J. Lee and A. Uthemann. 2021. COVID‑19 Crisis: Lessons Learned for Future Policy Research. Bank of Canada Staff Discussion Paper No. 2021-2.
  9. Gravelle, T., T. Grieder and S. Lavoie. 2013. “Monitoring and Assessing Risks in Canada’s Shadow Banking Sector.” Bank of Canada Financial System Review (June): 55–63
  10. Gravelle, T. 2020. Financial Stability and the COVID‑19 Pandemic.” Speech to Autorité des Marches Financiers, Montréal, Quebec, November 23.
  11. Office of the Superintendent of Financial Institutions (OSFI). 2020. OSFI Actions to Address Operational Issues Stemming from COVID‑19.
  12. Ouellet Leblanc, G. and R. Shotlander. 2020. “What COVID‑19 Revealed About the Resilience of Bond Funds.” Bank of Canada Staff Analytical Note No. 2020-18.
  13. Statistics Canada. 2019. An Economic Account for Non-bank Financial Intermediation as an Extension of the National Balance Sheet Accounts
  14. Statistics Canada. 2021. Non-bank Financial Intermediation, 2007 to 2019.


Bank of Canada staff analytical notes are short articles that focus on topical issues relevant to the current economic and financial context, produced independently from the Bank’s Governing Council. This work may support or challenge prevailing policy orthodoxy. Therefore, the views expressed in this note are solely those of the authors and may differ from official Bank of Canada views. No responsibility for them should be attributed to the Bank.