Banks in Small Communities in Canada: 1998-2004‪.‬

Abstract This paper examines changes in the provision of fundamental services to smaller communities in Canada. The research analyzes changes in the network of Canadian banks over the period 1998 to 2004 for the 874 places in Canada that reported populations of less than 50,000 inhabitants in 2001. It is well known that the Canadian banking sector has undergone major changes in its delivery system since the early 1990s. The research examines the relationship between bank services and other services, specifically by assessing if a decrease or increase in the number of bank branches in these smaller centres follows the same patterns and locational tendencies as other major service and retail providers (i.e., physicians, dentists, pharmacies, grocery stores, and car dealerships). The paper examines two fundamental issues: (i) the level of banking service in these communities; and (ii) whether banks typically are the first services to leave these centres. The empirical evidence indicates that changes in the banking system in small Canadian communities are associated directly with the overall economic performance of these places. The paper provides models of the lag-effects associated with service change in small town communities, identifying the services that either lead or follow change.