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The Canada-Caribbean Remittance Corridor
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profiling more challenging. Banks today seldom accept walk-in customers who are there for a single transaction. Canadian banks, partly for the above reasons, have been slow to respond to this growing remittance market, although, as noted, a very few have started offering services in partnership with MTOs. Other banks do not believe that there is a profitable market there, partly because they believe that bankarization is high in Canada thanks to the government policy to increase access to financial services for the low-income population and thus there is only a limited opportunity to increase a new client base. In-Kind Remittances. One of the key distinctive features of the remittance transfers to the Caribbean region is the tradition of sending barrels and foods. While cash is most popular, barrels and foods are still sent to families, especially on special occasions such as holidays, birthdays, anniversaries, weddings, and so forth. One can buy a big barrel and fill it in with clothes, shoes, toys, or any other necessities and gifts for the family. The fees for sending a barrel are high because goods are being shipped. In addition, the recipient has to collect the barrel at customs, and may have to pay some taxes or fees. For foods, many MTOs that target Caribbean markets offer a dispatch service. They provide the customer with a menu that includes such items as rice, sugar, and oil and then deliver the selected items to the family.
Measuring Canadian Remittances: The Challenge Measuring the exact scale of workers’ remittances is a challenging task. The macro-based approach, which relies on official data submitted by financial institutions and MTOs, only captures formal transfers, and it only captures them provided that remittance service providers (RSPs) are making the required regular and accurate reports to the authorities. Informal transfers around the world, however, are believed to be sizeable. A micro approach using surveys that target migrant workers can be useful in understanding them, though they may not always be accurate because senders and receivers are often hesitant to share information about money matters. Many countries record the official amount of workers’ remittances in the annual Balance of Payment (BoP) statistics in the “Workers Remittances” category or “Compensation of Employees” category. In Canada, the records are included in “Other private transfers” (Ralhan and Caron 2007). “Other private transfers” includes more than workers’ remittances, and this creates problems in identifying the exact official record of the workers’ remittances. Currently there is an on-going debate to improve the recording of migrant workers’ remittances in the BoP. As yet, however, BoP statistics are not a reliable source to determine the size of the remittance outflows from Canada. Subject data available from Citizenship and Immigration Canada (CIC) and the Survey of Household Spending may be subjected to further analysis, although in most cases these sources focus on inflows rather than the outflows in which this study is more interested. As well, there is frequently a very low response rate to the surveys. Statistics Canada recently studied the overall size of remittance flows out of Canada. This, as far as the authors are aware, was the first attempt by a Canadian governmental agency to estimate the scale of outward remittances. The estimate was based on the inflow