In the years leading up to the mid-1990s, provincial and federal governments in Canada ran large budget deficits. These deficits built up as governments continued to borrow, primarily to finance current consumption. It was an unsustainable situation, made more serious by our aging population. Clearly, social spending had to be put on a viable long-term course.
The average number of community banks per rural market has been remarkably stable over the past 20 years at right around 4, while the average number of large banks per rural market has increased from just under 1 to 1.4 (figure 10).