The Canadian dollar 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.

Summary info

Summary information about Canadian dollar

ISO 4217 Code:

CAD

Currency sign:

$ or C$

Country:

Canada

Subunit:

cent

Coins:

1 cent, 5 cents, 10 cents, 25 cents, 50 cents, 1 Canadian dollar, 2 Canadian dollars

Banknotes:

5 Canadian dollars, 10 Canadian dollars, 20 Canadian dollars, 50 Canadian dollars, 100 Canadian dollars

Central bank:

Bank of Canada

History

The history of Canada’s money provides a unique perspective from which to view the growth and development of the Canadian economy and Canada as a nation. Building on an earlier edition, this expanded History of the Canadian Dollar, traces the evolution of Canadian money from its pre-colonial origins to the present day. Highlighted on this journey are the currency chaos of the early French and British colonial period, the sweeping changes ushered in by Confederation in 1867, as well as the effects of two world wars and the Great Depression.

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 neighboring 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 = $US4.86 2⁄3. 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 = 4.86 2⁄3 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.

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 was temporarily abandoned during the First World War and definitively abolished on April 10, 1933. At the outbreak of the Second World War, 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.

Coins

There are seven denominations of Canadian coinage circulating: 1¢, 5¢, 10¢, 25¢, 50¢, $1, and $2. Though officially titled the One Cent Piece, Five Cent Piece, Ten Cent Piece, Twenty-Five Cent Piece, Fifty Cent Piece, One Dollar Coin and Two Dollar Coin; they are colloquially referred to as the penny, nickel, dime, quarter, half-dollar, loonie, and toonie respectively. The Fifty Cent Piece, though in circulation, is far less circulated than the other coins. Between the years 2000 and 2007 the Royal Canadian Mint struck 15,950,000 Fifty Cent Pieces; in comparison, during the same period 2,262,165,000 Twenty-Five Cent Pieces were released (approximately 142 times as many).

Other than the Two Dollar Coin, the denominations of Canadian coinage correspond to those of United States coinage. The sizes of the coins less than 50¢ are similar to those of U.S. coins, though this was not always the case. While the coins tend to have diameters almost equal to the equivalent U.S. coinage, most of the coins are thinner and weigh less than the equivalent U.S. coinage. The US penny settled on its current size in 1857, whereas the Canadian penny was much larger (25.4 mm) until 1920. There was some correspondence between the size of Canadian coins and British coins of similar value. For example, the large Canadian penny was identical in size and value to the contemporary British half-penny, which were 25.4 millimeters in the Edward VII version, and slightly larger during Victoria’s reign. Likewise, the Canadian quarter (23.81 mm diameter) was virtually identical in size and value to the British shilling (worth ~24 Canadian cents, or 12 British pennies, with a 24 mm diameter). The Canadian 5 cent coin, until the larger nickel coins of 1922, were 15 mm silver coins quite different from the US Liberty Head Nickels of 1883-1913, which were 21.2 mm and copper/nickel alloy.

Modest quantities of U.S. coinage circulate in Canada at par, and some Canadian coins (generally those with value less than fifty cent) circulate in the United States as well, though recent changes to the appearance and composition of Canadian coinage have made acceptance of these coins by merchants in the United States less certain. This partial interchangeability led to some concern when the United States Mint decided that the new Sacagawea Dollar coin would have the same diameter and coloring as the Canadian $1 coin, the „loonie”, although this proved to be a non-issue.

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 starting in the 1830s, by several pre-confederation colonial governments (most notably the Province of Canada in 1866), and after confederation, by the Dominion of Canada starting in 1870. Some municipalities also issued notes, most notably depression scrip 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 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 substrate instead of cotton fiber.

All banknotes are currently printed by the Canadian Bank Note Company and BA International Inc, under contract to the Bank of Canada.

CAD banknotes pictures gallery

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Useful links

About Bank of Canada:

Bank of Canada

List of currencies:

Currencies

Security and design features of CAD banknotes:

CAD banknotes

CAD currency on Wikipedia:

Canadian dollar

Official Website of Bank of Canada:

www.bankofcanada.ca

Commemorative coins:

Commemorative Coins