The sharing of credit information among all lenders yields social benefits which cannot be realized if each lender were to retain the information which itself has gathered for its own private use. Evidence suggests that information sharing significantly increases the breadth of credit markets, especially where creditors’ rights and foreclosure mechanisms are weak, partly compensating for the lack of effective law enforcement.
Indeed, Canadian companies, many of whom had already been forced to the sidelines by uncertainty over the future of NAFTA and the US-China trade war, could retrench further. The Canadian economy has demonstrated good resilience in the past couple of years. That resilience could be seriously tested by COVID-19, however, depending on the severity and duration of its effects.