An Exploration of First Nations Reserves and Access to Cash

Providing bank notes is one of the Bank of Canada’s core functions. So the Bank is interested in whether cash is adequately distributed across society, and this also influences the Bank’s thinking on issuing a central bank digital currency. We provide a perspective on these issues by exploring access of First Nations reserves to cash. To do so, we measure the distance between the 637 reserve band offices in Canada and their closest cash sources. In this study, these cash sources are:

• branches of financial institutions (FIs)
• automated bank machines (ABMs) owned by FIs
• white label ABMs

We measure the distance between band offices and cash sources by geographical distance (“as the crow flies”) and by travel distance (e.g., road routes). We also provide some information on access to financial services more generally.

Our findings show that the median travel distance from First Nations band offices to the closest cash source is 3.7 kilometres (km) and that the closest cash source is usually a white label ABM. The median travel distance from band offices to the closest FI branch is about 25 km. We also find that the closest cash sources are generally clustered within a relatively short distance from band offices, but some offices are far from a cash source. More specifically, almost a third of band offices are within 1 km of a cash source, over half are within 5 km, and over three-quarters are within 20 km. But some band offices are more than 100 km from a cash source, and some do not have a travel route to one of these cash sources.

There are a number of questions that follow from this work, including the following. What access to cash and other payment methods, and to financial services, do the most remote First Nations reserves have? What access to cash and other payment methods do marginalized communities have, including in urban settings? What access to cash sources and financial services should be reasonably expected in these areas?