The Canadian dollar (sign : $ ; code : CAD) is the currency of Canada . It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar -denominated currencies. It is divided into 100 cents.
In 1841, the Province of Canada adopted a new system based on the Halifax rating . The new Canadian pound was equal to four U.S. dollars (92.88 grains gold), making one pound sterling equal to 1 pound 4 shillings 4 pence Canadian. Thus, the new Canadian pound was worth 16 shillings 5.3 pence sterling.
The 1850s was a decade of wrangling over whether to adopt a sterling monetary system or a decimal monetary system based on the U.S. dollar. The local population, for reasons of practicality in relation to the increasing trade with the neighbouring United States, had a desire to assimilate the Canadian currency with the American unit, but the imperial authorities in London still preferred the idea of sterling to be the sole currency throughout the British Empire . In 1851, the Legislative Council and Assembly of Canada passed an act for the purposes of introducing a pound sterling unit in conjunction with decimal fractional coinage. The idea was that the decimal coins would correspond to exact amounts in relation to the U.S. dollar fractional coinage.
As a compromise, in 1853 an act of the Legislative Council and Assembly of Canada introduced the gold standard into Canada, based on both the British gold sovereign and the American gold eagle coins . This gold standard was introduced with the gold sovereign being legal tender at £1 = $US. No coinage was provided for under the 1853 act. Sterling coinage was made legal tender and all other silver coins were demonetized. The British government in principle allowed for a decimal coinage but nevertheless held out the hope that a sterling unit would be chosen under the name of 'royal'. However in 1857 the decision was made to introduce a decimal coinage into Canada in conjunction with the U.S. dollar unit. Hence, when the new decimal coins were introduced in 1858, Canada's currency became aligned with the U.S. currency, although the British gold sovereign continued to remain legal tender at the rate of £1 = right up until the 1990s. In 1859, Canadian postage stamps were issued with decimal denominations for the first time.
In 1861, New Brunswick and Nova Scotia followed Canada in adopting a decimal system based on the U.S. dollar unit. In the following year, Canadian postage stamps were issued with the denominations shown in dollars and cents.
Newfoundland went decimal in 1865, but unlike in the cases of Canada, New Brunswick, and Nova Scotia, it decided to adopt a unit based on the Spanish dollar rather than on the U.S. dollar, and there was a slight difference between these two units. The U.S. dollar was created in 1792 on the basis of the average weight of a selection of worn Spanish dollars. As such, the Spanish dollar was at a slight discount to the U.S. dollar, and likewise, the Newfoundland dollar while it existed, was at a slight discount to the Canadian dollar.
In 1867, Canada, New Brunswick, and Nova Scotia united in a federation called The Dominion of Canada and the three currencies were united.
In 1871, Prince Edward Island went decimal within the U.S. dollar unit and introduced coins for 1¢. However, the currency of Prince Edward Island was absorbed into the Canadian system shortly afterwards when Prince Edward island joined the Dominion of Canada.
New Brunswick is one of Canada's three Maritime provinces and is the only constitutionally bilingual province in the federation. The provincial capital is Fredericton; Saint John is the most populous city...
The History of Newfoundland and Labrador is the story of the peoples who have lived in what is now the Canadian province of Newfoundland and Labrador. In terms of population, Labrador is far smaller and has been part of Newfoundland since 1763....
The federal Parliament passed the Uniform Currency Act in April 1871, tying up loose ends as to the currencies of the various provinces and replacing them with a common Canadian dollar. The gold standard
Canadian English, like American English
In French
In 1858, bronze 1¢ and 0.925 silver 5¢, 10¢ and 20¢ coins were issued by the Province of Canada. Except for 1¢ coins struck in 1859, no more coins were issued until 1870, when production of the 5¢ and 10¢ was resumed and silver 25¢ and 50¢ were introduced. Between 1908 and 1919, sovereigns (legal tender in Canada for $) were struck in Ottawa with a "C" mintmark. Gold $5 and $10 coins were issued between 1912 and 1914.
In 1920, the size of the 1¢ was reduced and the silver fineness of the 5¢, 10¢, 25¢ and 50¢ coins was reduced to .800 silver/.200 copper. This composition was maintained for the 10¢, 25¢ and 50¢ piece through 1966, but the debasement of the 5¢ piece continued in 1922 with the silver 5¢ being entirely replaced by a larger nickel coin. In 1942, as a war-time measure, nickel was replaced by tombac
In 1935, the 0.800 silver Voyageur dollar
In 1967 both .800 silver/.200 copper and, later that year, .500 silver/.500 copper 10¢ and 25¢ coins were issued. 1968 saw further debasement: the .500 fine silver dimes and quarters were completely replaced by nickel ones mid-year. All 1968 50¢ and $1 coins were reduced in size and coined only in pure nickel. Thus, 1968 marked the last year in which any circulating silver coinage was issued in Canada.
In 1982, the 1¢ coin was changed to dodecagonal and the 5¢ was further debased to a cupro-nickel alloy. In 1987, a $1 coin struck in aureate-plated nickel was introduced. A bimetallic $2 coin followed in 1996. In 1997, copper-plated zinc replaced bronze in the 1¢. This was followed, in 2000, by the introduction of even cheaper plated-steel 1¢, 5¢, 10¢, 25¢ and 50¢ coins, with the 1¢ plated in copper and the others plated in cupro-nickel.
Coins are produced by the Royal Canadian Mint
A 2007 survey shows that only 37% of Canadians use pennies but the government continues to produce about 816 million pennies per year, equal to 25 pennies per Canadian.
The first paper money issued in Canada denominated in dollars were British Army bills, issued between 1813 and 1815. Canadian dollar bank notes were later issued by the chartered banks
In 1935, with only 10 chartered banks still issuing notes, the Bank of Canada was founded. It took over the federal issuance of notes from the Dominion of Canada. It began issuing notes in denominations of $1, $2, $5, $10, $20, $25, $50, $100, $500 and $1000. In 1944, the chartered banks were prohibited from issuing their own currency, with the Royal Bank of Canada
Significant design changes to the notes have occurred since 1935, with new series introduced in 1937, 1954, 1970, 1986, and 2001. The next series of notes is scheduled to be released in 2011. The design of these new notes has not been revealed to the public as of March 2011, but it has been confirmed that the notes will be printed on a polymer
All banknotes are currently printed by the Canadian Bank Note Company
Canadian dollar banknotes issued by the Bank of Canada are legal tender in Canada. However, commercial transactions may legally be settled in any manner agreed by the parties involved.
Legal tender of Canadian coinage is governed by the Currency Act
Retailers in Canada may refuse bank notes without breaking the law. According to legal guidelines, the method of payment has to be mutually agreed upon by the parties involved with the transactions. For example, convenience stores may refuse $100 bank notes if they feel that would put them at risk of being counterfeit
Canadian dollars, especially coins, are accepted by some businesses in the northernmost cities of the United States and in many Canadian snowbird
Unlike other currencies in the Bretton Woods system
The Canadian dollar fell considerably after 1960, and this contributed to Prime Minister John Diefenbaker's defeat in the 1963 election
As an inflation
The Canadian dollar fell in value against its American counterpart during the technological boom of the 1990s that was centred in the United States, and was traded for as little as 61.79¢ U.S. on 21 January 2002, which was an all-time low. Since then, its value against all major currencies has risen due, in part, to high prices for commodities (especially oil
The CAD's value against the U.S. dollar rose sharply in 2007 due to the continued strength of the Canadian economy and the U.S. currency's weakness on world markets. During trading on September 20, 2007 it met the U.S. greenback at parity for the first time since November 25, 1976.
Inflation
On September 28, 2007, the Canadian dollar closed above the U.S. dollar for the first time in 30 years, at US$1.0052.
On November 7, 2007, it hit US$1.1024 during trading, a modern-day high
after China announced it would diversify its US$1.43 trillion foreign exchange reserve away from the U.S. dollar. (The dollar has been as high as US$2.78, reached on 11 July 1864 after the United States had temporarily abandoned the gold standard.) By November 30, however, the Canadian dollar was once again at par with the U.S. dollar, and on December 4, the dollar had retreated back to US$0.98, through a cut in interest rates made by the Bank of Canada due to concerns about exports to the U.S.
Due to its soaring value and new record highs, the Canadian dollar was named the Canadian Newsmaker of the Year for 2007 by the Canadian edition of Time
Since 84.2% of Canada's exports go to the U.S., and 56.7% of imports into Canada come from the U.S., Canadians are mainly interested in the value of their currency against the U.S. dollar. Although domestic concerns arise when the dollar trades much lower than its U.S. counterpart, there is also concern among exporters when the dollar appreciates quickly. The rapid rise in the value of the dollar increases the price of Canadian exports to the U.S. On the other hand, there are advantages to a rising dollar, in that it is cheaper for Canadian industries to purchase foreign material and businesses.
The rise in value has affected the book and book publishing industry, where buyers have been accustomed to fixed prices on the backs of their books: one for the Canadian market, and another one for the American market.
The Bank of Canada has no specific target value for the Canadian dollar and has not intervened in foreign exchange market
On world markets, the Canadian dollar historically tended to move in tandem with the U.S. dollar. An apparently rising Canadian dollar (against the U.S. dollar) was decreasing against other international currencies; however, during the rise of the Canadian dollar since 2002, it has gained value against the U.S. dollar as well as other international currencies. In recent years, dramatic fluctuations in the value of the Canadian dollar have tended to correlate with shifts in oil prices, reflecting the dollar's status as a petrocurrency
A number of central banks (and commercial banks) keep Canadian dollars as a reserve currency. The Canadian dollar is considered to be a benchmark currency.
In the economy of the Americas the Canadian dollar plays a similar role to that which the Australian dollar
By observing how the Canadian dollar behaves against the U.S. dollar, foreign exchange economists can indirectly observe internal behaviours and patterns in the US economy that could not be seen by direct observation. The Canadian dollar has only fully evolved into a global reserve currency since the 1970s when it was floated against all other world currencies. Some economists have attributed the rise of importance of the Canadian dollar to the long term effects of the Nixon Shock
The Canadian dollar is used as a reserve currency around the world and is currently ranked 6th in value held as reserves.
Concerns about the United States of America's increasing debt levels in recent years have caused the Canadian dollar to become more widely held as an international reserve currency, as countries try to decrease their US dollar-denominated reserves.
Currency sign
A currency sign is a graphic symbol used as a shorthand for a currency's name, especially in reference to amounts of money. They typically employ the first letter or character of the currency, sometimes with minor changes such as ligatures or overlaid vertical or horizontal bars...
Dollar sign
The dollar or peso sign is a symbol primarily used to indicate the various peso and dollar units of currency around the world.- Origin :...
ISO 4217
ISO 4217 is a standard published by the International Standards Organization, which delineates currency designators, country codes , and references to minor units in three tables:* Table A.1 – Current currency & funds code list...
Currency
In economics, currency refers to physical objects generally accepted as a medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west and northward into the Arctic Ocean. It is the world's second largest country by...
Dollar sign
The dollar or peso sign is a symbol primarily used to indicate the various peso and dollar units of currency around the world.- Origin :...
Dollar
The dollar is the name of the official currency of many countries, including the United States, Canada, the Eastern Caribbean territories, Ecuador, Suriname, El Salvador, Panama, Belize, Singapore, Hong Kong, Taiwan, Brunei, East Timor, Australia, and New Zealand.-Etymology:On the 15th of January,...
From the Canadian pound to the Canadian dollar
In 1841, the Province of Canada adopted a new system based on the Halifax rating . The new Canadian pound was equal to four U.S. dollars (92.88 grains gold), making one pound sterling equal to 1 pound 4 shillings 4 pence Canadian. Thus, the new Canadian pound was worth 16 shillings 5.3 pence sterling.
The 1850s was a decade of wrangling over whether to adopt a sterling monetary system or a decimal monetary system based on the U.S. dollar. The local population, for reasons of practicality in relation to the increasing trade with the neighbouring United States, had a desire to assimilate the Canadian currency with the American unit, but the imperial authorities in London still preferred the idea of sterling to be the sole currency throughout the British Empire . In 1851, the Legislative Council and Assembly of Canada passed an act for the purposes of introducing a pound sterling unit in conjunction with decimal fractional coinage. The idea was that the decimal coins would correspond to exact amounts in relation to the U.S. dollar fractional coinage.
As a compromise, in 1853 an act of the Legislative Council and Assembly of Canada introduced the gold standard into Canada, based on both the British gold sovereign and the American gold eagle coins . This gold standard was introduced with the gold sovereign being legal tender at £1 = $US. No coinage was provided for under the 1853 act. Sterling coinage was made legal tender and all other silver coins were demonetized. The British government in principle allowed for a decimal coinage but nevertheless held out the hope that a sterling unit would be chosen under the name of 'royal'. However in 1857 the decision was made to introduce a decimal coinage into Canada in conjunction with the U.S. dollar unit. Hence, when the new decimal coins were introduced in 1858, Canada's currency became aligned with the U.S. currency, although the British gold sovereign continued to remain legal tender at the rate of £1 = right up until the 1990s. In 1859, Canadian postage stamps were issued with decimal denominations for the first time.
In 1861, New Brunswick and Nova Scotia followed Canada in adopting a decimal system based on the U.S. dollar unit. In the following year, Canadian postage stamps were issued with the denominations shown in dollars and cents.
Newfoundland went decimal in 1865, but unlike in the cases of Canada, New Brunswick, and Nova Scotia, it decided to adopt a unit based on the Spanish dollar rather than on the U.S. dollar, and there was a slight difference between these two units. The U.S. dollar was created in 1792 on the basis of the average weight of a selection of worn Spanish dollars. As such, the Spanish dollar was at a slight discount to the U.S. dollar, and likewise, the Newfoundland dollar while it existed, was at a slight discount to the Canadian dollar.
In 1867, Canada, New Brunswick, and Nova Scotia united in a federation called The Dominion of Canada and the three currencies were united.
In 1871, Prince Edward Island went decimal within the U.S. dollar unit and introduced coins for 1¢. However, the currency of Prince Edward Island was absorbed into the Canadian system shortly afterwards when Prince Edward island joined the Dominion of Canada.
Province of Canada
The Province of Canada or the United Province of Canada was a British colony in North America from 1841 to 1867. Its formation reflected recommendations made by John Lambton, 1st Earl of Durham in the Report on the Affairs of British North America following the Rebellions of 1837.The Province of...
Halifax rating
The Halifax rating was a valuation of the Spanish dollar in the £sd accounting system. It set the Spanish dollar at a value of 5 shillings and was established c.1750 in Halifax, Nova Scotia...
Canadian pound
The pound was the unit of account for currency of the Canadas until 1858. It was subdivided into 20 shillings, each of 12 pence. In Lower Canada, the sou was used, worth penny...
United States dollar
The United States dollar is the official currency of the United States of America. It is divided into 100 smaller units called cents....
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha...
Canadian pound
The pound was the unit of account for currency of the Canadas until 1858. It was subdivided into 20 shillings, each of 12 pence. In Lower Canada, the sou was used, worth penny...
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha...
British Empire
The British Empire comprised the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom. It originated with the overseas colonies and trading posts established by England in the late 16th and early 17th centuries. At its height it was the...
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha...
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. There are distinct kinds of gold standard...
Eagle (United States coin)
The eagle is a base-unit of denomination issued only for gold coinage by the United States Mint. It has been obsolete as a circulating denomination since 1933. The eagle was the largest of the four main decimal base-units of denomination used for circulating coinage in the United States prior to...
New Brunswick
Nova Scotia
Nova Scotia is one of Canada's three Maritime provinces and is the most populous province in Atlantic Canada. The provincial capital is Halifax. Nova Scotia is the second-smallest province in Canada with an area of...
History of Newfoundland and Labrador
Spanish dollar
The Spanish dollar is a silver coin, of approximately 38 mm diameter, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform in 1497. Its purpose was to correspond to the German thaler...
Newfoundland dollar
The dollar was the currency of the colony and Dominion of Newfoundland from 1865 until 1949, when Newfoundland became a province of Canada. It was subdivided into 100 cents.-History:...
Prince Edward Island
Prince Edward Island is a Canadian province consisting of an island of the same name, as well as other islands. The maritime province is the smallest in the nation in both land area and population...
| Currencies used in Canada | |||
|---|---|---|---|
| Currency | Dates in use | Value in British pounds | Value in Canadian dollars |
| Canadian pound Canadian pound The pound was the unit of account for currency of the Canadas until 1858. It was subdivided into 20 shillings, each of 12 pence. In Lower Canada, the sou was used, worth penny... | 1841–1858 | 16s 5.3d | $4 |
| Canadian dollar | 1858–present | 4s 1.3d | $1 |
| New Brunswick dollar New Brunswick dollar The dollar was the currency of New Brunswick between 1860 and 1867. It replaced the pound at a rate of 4 dollars = 1 pound and was equal to the Canadian dollar... | 1860–1867 | ||
| British Columbia dollar British Columbia dollar The dollar was the currency of British Columbia between 1865 and 1871. It replaced the British pound at a rate of 1 pound = 4.866 dollars and was equivalent to the Canadian dollar, which replaced it. The dollar was subdivided into 100 cents... | 1865–1871 | ||
| Prince Edward Island dollar Prince Edward Island dollar The dollar was the currency of Prince Edward Island between 1871 and 1873. It replaced the pound at a rate of 1 pound = 4.866 dollars and was equivalent to the Canadian dollar, which replaced it in 1873. The dollar was subdivided into 100 cents.-Coins:... | 1871–1873 | ||
| Nova Scotian dollar Nova Scotian dollar The dollar was the currency of Nova Scotia between 1860 and 1871. It replaced the Nova Scotian pound at a rate of 5 dollars = 1 pound and was consequently worth less than the Canadian dollar... | 1860–1871 | 4s | $0.973 |
| Newfoundland dollar Newfoundland dollar The dollar was the currency of the colony and Dominion of Newfoundland from 1865 until 1949, when Newfoundland became a province of Canada. It was subdivided into 100 cents.-History:... | 1865–1895 | 4s 2d | $1.014 |
| 1895–1949 | 4s 1.3d | $1 | |
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. There are distinct kinds of gold standard...
was temporarily abandoned during the First World War and definitively abolished on April 10, 1933. At the outbreak of the Second World War 
World War II
World War II, or the Second World War , was a global military conflict lasting from 1939 to 1945, which involved most of the world's nations, including all of the great powers: eventually forming two opposing military alliances, the Allies and the Axis...
, the exchange rate to the U.S. dollar was fixed at 1.1 Canadian dollars = 1 U.S. dollar. This was changed to parity in 1946. In 1949, sterling was devalued and Canada followed, returning to a peg of 1.1 Canadian dollars = 1 U.S. dollar. However, Canada allowed its dollar to float in 1950, only returning to a fixed exchange rate in 1962, when the dollar was pegged at 1 Canadian dollar = 0.925 U.S. dollar. This peg lasted until 1970, after which the currency's value has floated.Terminology
Canadian English, like American English
American English
American English is a set of dialects of the English language used mostly in the United States. Approximately two-thirds of native speakers of English live in the United States.English is the most common language in the United States...
, uses the slang term "buck Dollar
The dollar is the name of the official currency of many countries, including the United States, Canada, the Eastern Caribbean territories, Ecuador, Suriname, El Salvador, Panama, Belize, Singapore, Hong Kong, Taiwan, Brunei, East Timor, Australia, and New Zealand.-Etymology:On the 15th of January,...
" for a dollar. The Canadian origin of this term derives from a coin struck by the Hudson's Bay Company Hudson's Bay Company
The Hudson's Bay Company , abbreviated HBC, or "The Bay" is the oldest commercial corporation in North America and one of the oldest in the world. A fur trading business for much of its existence, today Hudson's Bay Company owns and operates retail stores throughout Canada...
during the 17th century with a value equal to the pelt Fur
Fur is a synonym for hair, used more in reference to non-human animals, usually mammals; particularly those with extensive body hair coverage. The term is sometimes used to refer to the body hair of an animal as a complete coat, also known as the "pelage". Fur is also used to refer to animal pelts...
of a male beaver Beaver
The beaver is a primarily nocturnal, large, semi-aquatic rodent. Castor includes two extant species, North American Beaver and Eurasian Beaver . Beavers are known for building dams, canals, and lodges . They are the second-largest rodent in the world...
– a "buck". Because of the appearance of the common loon on the back of the dollar coin that replaced the dollar bill in 1987, the word "loonie Loonie
The Canadian 1 dollar coin is a gold-coloured, bronze-plated, one-dollar coin introduced in 1987. It bears images of a common loon, a well-known Canadian bird, on the reverse, and of Queen Elizabeth II on the obverse....
" was adopted in Canadian parlance to distinguish the Canadian dollar coin from the dollar bill. When the two-dollar coin was introduced in 1996, the derivative word "toonie Toonie
The Canadian 2 dollar coin, commonly called Toonie, was introduced on February 19, 1996 by Public Works minister Diane Marleau. The Toonie is a bi-metallic coin which bears an image of a polar bear, by Campbellford, Ontario artist Brent Townsend, on the reverse. The obverse, like all other current...
" ("two loonies") became the common word for it in Canadian English slang; doubloon is another, informal, term, in reference to the Spanish coin Doubloon
The doubloon , was a two-escudo or 32-reales gold coin, weighing 6.77 grams . Doubloons were minted in Spain, Mexico, Peru, and Nueva Granada...
and a play on "double-loonie".In French
French language
French is a Romance language spoken as a first language by most people from France, French-speaking Switzerland, Wallonia and Brussels in Belgium, Monaco, and the regions of Quebec and Acadia in Canada, as well as minorities elsewhere...
, the currency is also called le dollar; Canadian French Canadian French
Canadian French is an umbrella term referring to the varieties of French spoken in Canada. French is the mother tongue of nearly seven million Canadians, a figure constituting roughly 22% of the national population. At the federal level it has co-official status alongside English...
slang terms include piastre Piastre
The word piastre or piaster originates from the Italian for 'thin metal plate'. The name was applied to Spanish and Latin American pieces of eight, or pesos, by Venetian traders in the Levant in the 16th century....
or piasse (same as "buck", but the original word used in 18th-century French to translate "dollar") and huard (equivalent to "loonie", since huard is French for "loon," the bird appearing on the coin). The French pronunciation of "cent" is generally used for the subdivision; sou is another, informal, term for 1¢. 25¢ coins Quarter (Canadian coin)
The quarter is a Canadian coin, valued at 25 cents or one-fourth of a Canadian dollar. It is a small, circular coin of silver colour. According to the Royal Canadian Mint, the official name for the coin is the 25-cent piece, but in practice it is simply called a quarter.-History of...
in Quebec French are often called trente sous (thirty cents) because of a series of changes in terminology, currencies, and exchange rates. After the British conquest of Canada in 1759, French coins gradually went out of use, and sou became a nickname for the halfpenny, which was similar in value to the French sou. Spanish dollars and U.S. dollars were also in use, and from 1841 to 1858 the exchange rate was fixed at $4 = £1 (or 400¢ = 240d). This made 25¢ equal to 15d, or 30 halfpence (trente sous). After decimalization and the withdrawal of halfpence coins, the nickname sou began to be used for the 1¢ coin Penny (Canadian coin)
In Canada, a penny is a coin worth one cent or of a dollar. According to the Royal Canadian Mint, the official national term of the coin is the "one-cent piece", but in practice the term penny or cent is universal. Originally, "penny" referred to a two-cent coin. When the two-cent coin was...
, but the idiom trente sous for 25¢ endured.Coins
In 1858, bronze 1¢ and 0.925 silver 5¢, 10¢ and 20¢ coins were issued by the Province of Canada. Except for 1¢ coins struck in 1859, no more coins were issued until 1870, when production of the 5¢ and 10¢ was resumed and silver 25¢ and 50¢ were introduced. Between 1908 and 1919, sovereigns (legal tender in Canada for $) were struck in Ottawa with a "C" mintmark. Gold $5 and $10 coins were issued between 1912 and 1914.
In 1920, the size of the 1¢ was reduced and the silver fineness of the 5¢, 10¢, 25¢ and 50¢ coins was reduced to .800 silver/.200 copper. This composition was maintained for the 10¢, 25¢ and 50¢ piece through 1966, but the debasement of the 5¢ piece continued in 1922 with the silver 5¢ being entirely replaced by a larger nickel coin. In 1942, as a war-time measure, nickel was replaced by tombac
Tombac
Tombac, as spelled in French, or Tombak is a brass alloy with high copper content and 5-20% zinc content. Tin, lead or arsenic may be added for colouration.It is a cheap malleable alloy mainly used for medals, ornament, decoration and some munitions....
in the 5¢ coin, which was changed in shape from round to dodecagonal. Chromium-plated steel was used for the 5¢ in 1944 and 1945 and between 1951 and 1954, after which nickel was readopted. The 5¢ returned to a round shape in 1963.In 1935, the 0.800 silver Voyageur dollar
Voyageur Dollar
The Voyageur Dollar was a coin of Canada struck for circulation in silver from 1935 to 1966, and as a commemorative in 2003. A nickel version was struck from 1968 to 1987. In 1987, the coin was replaced by the loonie. The coin remains legal tender....
was introduced. Production was maintained through 1967 with the exception of the war years between 1939 and 1945.In 1967 both .800 silver/.200 copper and, later that year, .500 silver/.500 copper 10¢ and 25¢ coins were issued. 1968 saw further debasement: the .500 fine silver dimes and quarters were completely replaced by nickel ones mid-year. All 1968 50¢ and $1 coins were reduced in size and coined only in pure nickel. Thus, 1968 marked the last year in which any circulating silver coinage was issued in Canada.
In 1982, the 1¢ coin was changed to dodecagonal and the 5¢ was further debased to a cupro-nickel alloy. In 1987, a $1 coin struck in aureate-plated nickel was introduced. A bimetallic $2 coin followed in 1996. In 1997, copper-plated zinc replaced bronze in the 1¢. This was followed, in 2000, by the introduction of even cheaper plated-steel 1¢, 5¢, 10¢, 25¢ and 50¢ coins, with the 1¢ plated in copper and the others plated in cupro-nickel.
Coins are produced by the Royal Canadian Mint
Royal Canadian Mint
The Royal Canadian Mint produces all of Canada's circulation coins, and manufactures circulation coins on behalf of other nations. The Mint also designs and manufactures: precious and base metal collector coins; gold, silver, palladium, and platinum bullion coins; medals, as well as medallions and...
in Winnipeg, Manitoba 
Manitoba
Manitoba is a Canadian prairie province with an area of . The province has over 110,000 lakes and has a largely continental climate because of its flat topography. Agriculture, mostly concentrated in the fertile southern and western parts of the province, is vital to the province's economy; other...
, and currently issued in denominations of 1¢ (penny Penny (Canadian coin)
In Canada, a penny is a coin worth one cent or of a dollar. According to the Royal Canadian Mint, the official national term of the coin is the "one-cent piece", but in practice the term penny or cent is universal. Originally, "penny" referred to a two-cent coin. When the two-cent coin was...
), 5¢ (nickel Nickel (Canadian coin)
The Canadian five-cent coin, commonly called a nickel, is a coin worth five cents or one-twentieth of a Canadian dollar. It was patterned on the corresponding coin in the neighbouring United States...
), 10¢ (dime Dime (Canadian coin)
In Canada a dime is a coin worth ten cents. It is the smallest of the currently issued Canadian coins. According to the Royal Canadian Mint, the official national term of the coin is the 10 cent piece, but in practice the term dime is universal...
), 25¢ (quarter Quarter (Canadian coin)
The quarter is a Canadian coin, valued at 25 cents or one-fourth of a Canadian dollar. It is a small, circular coin of silver colour. According to the Royal Canadian Mint, the official name for the coin is the 25-cent piece, but in practice it is simply called a quarter.-History of...
), 50¢ (50¢ piece 50 Cent Piece (Canadian coin)
The fifty-cent piece is the common name of the Canadian coin worth 50 cents. It is sometimes referred to as a "half dollar." The coin's reverse depicts the coat of arms of Canada. At the opening ceremonies for the Ottawa branch of the Royal Mint, held on January 2, 1908, Governor General Earl Grey...
) (though the 50¢ piece is rarely used, to the point where few even know of its existence.), $1 (loonie Loonie
The Canadian 1 dollar coin is a gold-coloured, bronze-plated, one-dollar coin introduced in 1987. It bears images of a common loon, a well-known Canadian bird, on the reverse, and of Queen Elizabeth II on the obverse....
), and $2 (toonie). The standard set of designs has Canadian symbols, usually wildlife, on the reverse, and an effigy of Elizabeth II on the obverse Obverse and reverse
The term obverse and its opposite, reverse, describe the two flat faces of coins and sometimes other kinds of two-sided objects such as paper currency, flags , medals, drawings, old master prints and other works of art, and printed fabrics...
. However, some pennies, nickels, and dimes remain in circulation that bear the effigy of George VI. Commemorative coins with differing reverses are also issued on an irregular basis. 50¢ coins are rarely found in circulation; they are often collected and not regularly used in day-to-day transactions. There have been repeated talks about removing the penny from circulation as it is estimated that it costs the Royal Canadian Mint up to four cents to produce and distribute a one-cent coin. The Canadian penny costs at least C$130 million annually to keep in circulation, estimates a financial institution that called for an end to the penny.
A 2007 survey shows that only 37% of Canadians use pennies but the government continues to produce about 816 million pennies per year, equal to 25 pennies per Canadian.
Banknotes
The first paper money issued in Canada denominated in dollars were British Army bills, issued between 1813 and 1815. Canadian dollar bank notes were later issued by the chartered banks
Banking in Canada
Banking in Canada is widely considered the most efficient and safest banking system in the world, ranking as the world's soundest banking system for the past three years according to reports by the World Economic Forum. Released at October 2010, Global Finance magazine put Royal Bank of Canada at...
starting in the 1830s, by several pre-confederation Canadian Confederation
Canadian Confederation was the process by which the federal Dominion of Canada was formed on July 1, 1867. On that day, three British colonies were formed into four Canadian provinces...
colonial governments (most notably the Province of Canada Province of Canada
The Province of Canada or the United Province of Canada was a British colony in North America from 1841 to 1867. Its formation reflected recommendations made by John Lambton, 1st Earl of Durham in the Report on the Affairs of British North America following the Rebellions of 1837.The Province of...
in 1866), and after confederation, by the Dominion of Canada starting in 1870. Some municipalities also issued notes, most notably depression scrip Scrip
Scrip is an American term for any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns, military bases, ships on long...
during the 1930s.In 1935, with only 10 chartered banks still issuing notes, the Bank of Canada was founded. It took over the federal issuance of notes from the Dominion of Canada. It began issuing notes in denominations of $1, $2, $5, $10, $20, $25, $50, $100, $500 and $1000. In 1944, the chartered banks were prohibited from issuing their own currency, with the Royal Bank of Canada
Royal Bank of Canada
The Royal Bank of Canada is the largest financial institution in Canada, which is measured by deposits, revenues, and market capitalization. The bank serves seventeen million clients and has 80,100 employees worldwide. The company corporate headquarters are located in Toronto, Ontario. The bank...
and the Bank of Montreal among the last to issue notes.Significant design changes to the notes have occurred since 1935, with new series introduced in 1937, 1954, 1970, 1986, and 2001. The next series of notes is scheduled to be released in 2011. The design of these new notes has not been revealed to the public as of March 2011, but it has been confirmed that the notes will be printed on a polymer
Polymer banknote
Polymer banknotes were developed by the Reserve Bank of Australia , Commonwealth Scientific and Industrial Research Organisation and The University of Melbourne and were first issued as currency in Australia in 1988. These banknotes are made from the polymer biaxially-oriented polypropylene ...
substrate instead of cotton fibre.All banknotes are currently printed by the Canadian Bank Note Company
Canadian Bank Note Company
The Canadian Bank Note Company is a Canadian security printing company. It is probably best known for being one of two private companies holding contracts with the Bank of Canada to supply it with Canada's paper currency. The company's other clients include private businesses, national and...
and BA International Inc, under contract to the Bank of Canada.
Legal tender
Canadian dollar banknotes issued by the Bank of Canada are legal tender in Canada. However, commercial transactions may legally be settled in any manner agreed by the parties involved.
Legal tender of Canadian coinage is governed by the Currency Act
Currency Act
The Currency Act is the name of several acts of the Parliament of Great Britain that regulated paper money issued by the colonies of British America. The acts sought to protect British merchants and creditors from being paid in depreciated colonial currency...
which sets out limits of: - $50 if the denomination is $2 ToonieThe Canadian 2 dollar coin, commonly called Toonie, was introduced on February 19, 1996 by Public Works minister Diane Marleau. The Toonie is a bi-metallic coin which bears an image of a polar bear, by Campbellford, Ontario artist Brent Townsend, on the reverse. The obverse, like all other current...or greater but does not exceed $10;
- $25 if the denomination is $1 LoonieThe Canadian 1 dollar coin is a gold-coloured, bronze-plated, one-dollar coin introduced in 1987. It bears images of a common loon, a well-known Canadian bird, on the reverse, and of Queen Elizabeth II on the obverse....;
- $10 if the denomination is 10¢ or greater but less than $1;
- $5 if the denomination is 5¢;
- 25¢ if the denomination is 1¢.
Retailers in Canada may refuse bank notes without breaking the law. According to legal guidelines, the method of payment has to be mutually agreed upon by the parties involved with the transactions. For example, convenience stores may refuse $100 bank notes if they feel that would put them at risk of being counterfeit
Counterfeit
A counterfeit is an imitation, usually one that is made with the intent of fraudulently passing it off as genuine. Counterfeit products are often produced with the intent to take advantage of the superior value of the imitated product...
victims; however, official policy suggests that the retailers should evaluate the impact of that approach. In the case that no mutually acceptable form of payment can be found for the tender, the parties involved should seek legal advice.Canadian dollars, especially coins, are accepted by some businesses in the northernmost cities of the United States and in many Canadian snowbird
Snowbird (people)
The term snowbird is used to describe people from the U.S. Northeast, U.S. Midwest, or Canada who spend a large portion of winter in warmer locales such as California, Arizona, Florida, Texas, the Carolinas, or elsewhere along the Sun Belt region of the southern and southwest United States,...
enclaves, just as U.S. dollars are accepted by some Canadian businesses.Value
Unlike other currencies in the Bretton Woods system
Bretton Woods system
The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states in the mid 20th century...
, whose values were fixed Fixed exchange rate
A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime wherein a currency's value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold.A fixed exchange rate is usually used to...
, the Canadian dollar was allowed to float Floating exchange rate
A floating exchange rate or fluctuating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency....
from 1950 to 1962. Between 1952 to 1960, the Canadian dollar traded at a slight premium over the U.S. dollar, reaching a high of US$1.0614 on August 20, 1957.The Canadian dollar fell considerably after 1960, and this contributed to Prime Minister John Diefenbaker's defeat in the 1963 election
Canadian federal election, 1963
The Canadian federal election of 1963 was held on April 8 to elect members of the Canadian House of Commons of the 26th Parliament of Canada. It resulted in the defeat of the minority Progressive Conservative government of Prime Minister John Diefenbaker.During the Tories' last year in office,...
. The Canadian dollar returned to a fixed exchange rate regime in 1962 when its value was set at US$0.925, where it remained until 1970.As an inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
-fighting measure, the Canadian dollar was allowed to float in 1970. Its value appreciated and it was worth more than the U.S. dollar for part of the 1970s. The high point was on April 25, 1974, when it reached US$1.0443.The Canadian dollar fell in value against its American counterpart during the technological boom of the 1990s that was centred in the United States, and was traded for as little as 61.79¢ U.S. on 21 January 2002, which was an all-time low. Since then, its value against all major currencies has risen due, in part, to high prices for commodities (especially oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
) that Canada exports.The CAD's value against the U.S. dollar rose sharply in 2007 due to the continued strength of the Canadian economy and the U.S. currency's weakness on world markets. During trading on September 20, 2007 it met the U.S. greenback at parity for the first time since November 25, 1976.
Inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
in the value of the Canadian dollar was fairly low since the 1990s, but had been severe for some decades before that. In 2007 the Canadian dollar rebounded remarkably, soaring 23% in value.On September 28, 2007, the Canadian dollar closed above the U.S. dollar for the first time in 30 years, at US$1.0052.
On November 7, 2007, it hit US$1.1024 during trading, a modern-day high
after China announced it would diversify its US$1.43 trillion foreign exchange reserve away from the U.S. dollar. (The dollar has been as high as US$2.78, reached on 11 July 1864 after the United States had temporarily abandoned the gold standard.) By November 30, however, the Canadian dollar was once again at par with the U.S. dollar, and on December 4, the dollar had retreated back to US$0.98, through a cut in interest rates made by the Bank of Canada due to concerns about exports to the U.S.
Due to its soaring value and new record highs, the Canadian dollar was named the Canadian Newsmaker of the Year for 2007 by the Canadian edition of Time
Time (magazine)
Time is an American news magazine. A European edition is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition is based in Hong Kong. As of 2009, Time no longer publishes a Canadian advertiser edition...
magazine.Since 84.2% of Canada's exports go to the U.S., and 56.7% of imports into Canada come from the U.S., Canadians are mainly interested in the value of their currency against the U.S. dollar. Although domestic concerns arise when the dollar trades much lower than its U.S. counterpart, there is also concern among exporters when the dollar appreciates quickly. The rapid rise in the value of the dollar increases the price of Canadian exports to the U.S. On the other hand, there are advantages to a rising dollar, in that it is cheaper for Canadian industries to purchase foreign material and businesses.
The rise in value has affected the book and book publishing industry, where buyers have been accustomed to fixed prices on the backs of their books: one for the Canadian market, and another one for the American market.
The Bank of Canada has no specific target value for the Canadian dollar and has not intervened in foreign exchange market
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized over-the-counter financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
s since 1998. The Bank's official position is that market conditions should determine the worth of the Canadian dollar, although the BoC occasionally makes minor attempts to influence its value.On world markets, the Canadian dollar historically tended to move in tandem with the U.S. dollar. An apparently rising Canadian dollar (against the U.S. dollar) was decreasing against other international currencies; however, during the rise of the Canadian dollar since 2002, it has gained value against the U.S. dollar as well as other international currencies. In recent years, dramatic fluctuations in the value of the Canadian dollar have tended to correlate with shifts in oil prices, reflecting the dollar's status as a petrocurrency
Petrocurrency
Petrocurrency is a portmanteau neologismused with three distinct meanings, though often confused:#Trading surpluses of oil producing nations, originally called petrodollars...
owing to Canada's significant oil exports.Reserve currency
A number of central banks (and commercial banks) keep Canadian dollars as a reserve currency. The Canadian dollar is considered to be a benchmark currency.
In the economy of the Americas the Canadian dollar plays a similar role to that which the Australian dollar
Australian dollar
The Australian dollar is the currency of the Commonwealth of Australia, including Christmas Island, Cocos Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu...
(AUD) does in the Asia-Pacific Asia-Pacific
Asia-Pacific or Asia Pacific is the part of the world in or near the Western Pacific Ocean...
region. The Canadian dollar (as a regional reserve currency for banking) has been an important part of the British, French and Dutch Caribbean state's economies and finance systems since the 1950s. The Canadian dollar is held by many central banks in Central America and South America as well. The holding of the Canadian dollar in Latin America is done so because of each nation's nationally important issues of remittances and international trade.By observing how the Canadian dollar behaves against the U.S. dollar, foreign exchange economists can indirectly observe internal behaviours and patterns in the US economy that could not be seen by direct observation. The Canadian dollar has only fully evolved into a global reserve currency since the 1970s when it was floated against all other world currencies. Some economists have attributed the rise of importance of the Canadian dollar to the long term effects of the Nixon Shock
Nixon Shock
The Nixon Shock was a series of economic measures taken by U.S. President Richard Nixon in 1971 including unilaterally cancelling the direct convertibility of the United States dollar to gold that essentially ended the existing Bretton Woods system of international financial exchange.-Background:By...
that effectively ended the Bretton Woods systemof global finance. The Canadian dollar is used as a reserve currency around the world and is currently ranked 6th in value held as reserves.
Concerns about the United States of America's increasing debt levels in recent years have caused the Canadian dollar to become more widely held as an international reserve currency, as countries try to decrease their US dollar-denominated reserves.
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