Canadian dollar

The Canadian dollar (CAD) is the unit of currency of Canada. It is divided into 100 cents. The dollar has been used for most of Canada's history.

Table of contents

1 History 2 Canadian Currency 3 Canadian currency rumours 4 Value 5 External Links

History

Canada decided to use the dollar instead of a pound sterling system because of the ubiquity of Spanish dollars in North America in the 18th and early 19th century and because of the standardization of the American dollar. The Canadas, in particular, favoured the dollar - the Montreal Bank issued bank notes in dollars in 1817 - whereas the Atlantic colonies, with stronger ties to Great Britain and weaker ones to the US, preferred the l.s.d. system. The Province of Canada declared that all accounts would be kept in dollars as of January 1, 1858, and ordered the issue of the first official Canadian dollars in the same year. The colonies that would come together in Canadian Confederation progressively adopted a decimal system over the next few years.

Finally, the government 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 definitively abolished on April 10, 1933.

Canadian Currency

Canadians use coins and banknotes of similar face value to American notes. In fact, the historical sizes of the coins less than 50 cents are identical to those of American coins due to both nations using the Spanish dollar as the basis of their money. Quantities of American coinage circulate in Canada at par, and some Canadian coins circulate in the US as well.

Canadian coins are issued by the Royal Canadian Mint and struck at their facilities in Winnipeg. Bank notes are issued by the Bank of Canada and printed at Ottawa. Notes and coins are marked in both official languages.

The most significant recent development in Canadian currency was the withdrawal of the $1 and $2 notes in 1987 and 1996, respectively, and their replacement with coins. The $1 coins are colloquially called "loonies," for the loon on their back, and the name is frequently applied to the currency unit as well. The $2 coins, carrying a polar bear, are called by analogy "twonies" (or "toonies"). Unlike the 1970s American attempt to introduce their dollar, the new coins were quickly accepted by the public.

Also, the Bank of Canada recently introduced a new series of notes, starting with the new $10 note in 2001 and the new $5 note in 2002. Called "Canadian Journey", this series will feature elements of Canadian heritage and excerpts from Canadian literature.

Also, between 2000-2002, the Royal Canadian Mint altered the composition of its coins. Formerly 99% nickel in the case of silver-coloured coins and the loonie, and 98,4% zinc in the case of the penny, they are now plated steel; this was a cost-cutting measure. Unfortunately, there have been some problems with compatibility between the new coins and coin-operated devices like vending machines and public telephones.

Canadian Coins
Value	Common name	Composition	Obverse	Reverse	Mass	Diameter	Thickness
$0.01	penny (Fr. cent noir)	94% steel, 1.5% nickel, 4.5% copper plating	The Queen	Maple leaf	2.35 g	19.05 mm	1.45 mm
$0.05	nickel	94.5% steel, 3.5% copper, 2% nickel plating	The Queen	Beaver	3.95 g	21.2 mm	1.76 mm
$0.10	dime	92% steel, 5.5% copper, 2.5% nickel plating	The Queen	The Bluenose (a famous schooner)	1.75 g	18.03 mm	1.22 mm
$0.25	quarter	94% steel, 3.8% copper, 2.2% nickel plating	The Queen	Caribou	4.4 g	23.88 mm	1.58 mm
$0.50	half-dollar†	93.15% steel, 4.75% copper, 2.1% nickel plating	The Queen	Canadian coat of arms	6.9 g	27,13 mm	1.95 mm
$1.00	loonie (Fr. huard)	91.5% nickel 8.5% bronze plating	The Queen	Common loon	7 g	26.5 mm	1.75 mm
$2.00	toonie or twonie	Rim - 99% nickel; core - 92% copper, 6% aluminum, 2% nickel	The Queen	Polar bear	7.3 g	28 mm	1.8 mm

† Not in general circulation.

Canadian Banknotes
1986 (Birds) series
Value	Colour	Obverse	Reverse
$2.00‡	Terra cotta	The Queen	American robins
$5.00‡	Blue	Wilfrid Laurier	Kingfisher
$10.00‡	Purple	John A. Macdonald	Osprey
$20.00	Green	The Queen	Common loon
$50.00	Red	Mackenzie King	Snowy owl
$100.00	Brown	Robert Borden	Canada goose
$1000.00‡	Reddish purple	The Queen	Pine grosbeak
2001 ("Canadian Journey") series
$5.00	Blue	Wilfrid Laurier	Children playing ice hockey and other winter sports; excerpt from The Hockey Sweater by Roch Carrier
$10.00	Purple	John A. Macdonald	Peacekeeping forces and war memorial; excerpt from "In Flanders' Fields" by John McCrae

‡ Withdrawn from circulation. Currency withdrawn from circulation is still legal tender and can be redeemed at banks, but merchants are not required to accept it. As of this writing, the 1986-series $5 and $10 notes are still commonplace, and one can occasionally see $20 and $100 bills that antedate even the 1986 series.

All banknotes measure 152.4 by 69.85 mm.

Canadian currency rumours

A number of urban legends circulate regarding Canadian currency.

• An American flag is flying over the Parliament buildings on the obverse of a Canadian note. This is not the case. The Birds series notes depict a Union Jack flying over Parliament on the $100 note; a Red Ensign (a former Canadian flag) on the $5, $10, and $50 notes; and the modern maple-leaf flag on the former $2 and $1000 notes. Each of these represents the flag that Canada was using at the time of the Prime Minister depicted on the bill. (The $20 depicts the Library of Parliament, with no flag visible.)

• The new series $10 bill is being recalled because there is a misprint in the poem In Flanders' Fields. The first line as printed, "In Flanders' fields the poppies blow," startled many people, who believed the last word should be "grow." John McCrae wrote two versions which were both published, but his original manuscript, the one used by the government and widely used for Remembrance Day ceremonies, reads "blow," meaning to bloom. (The last two lines are, "We shall not sleep, though poppies grow/In Flanders' fields.")

• You can pop the centre out of a toonie. This is (or was) in fact true. Many toonies in the first shipment of the coins were defective, and could separate if struck hard. This problem was quickly corrected.

Value

Inflation in the value of the Canadian Dollar has been fairly low since the 1990s, but had been severe for some decades before that.

Although it was more valuable than the United States dollar for part of the 1970s, since then it has slipped and is currently holding at approximately 75% of the value of the US dollar. On May 1, 2003, the Canadian dollar moved above $0.70 US for the first time since April 23, 1998. It has since risen above $0.75 US, bringing the currency's year-to-date rally against the USD past 16 percent.

The rise in the value of the Canadian Dollar has more to do with weakness in the American Dollar than the Canadian Dollar itself. The American Dollar has lost value against most major currencies due to concerns about the American economy. However, many economist believe that the Canadian Dollar was undervalued compared to the American Dollar given the actual economic situation in both countries.

Although there was a great deal of domestic concern when the Canadian dollar was trading much lower than the US Dollar, there is now even more concern amongst the economic community because of the suddenly higher dollar. The rapid rise in the value of the Canadian Dollar will hurt the profitability of Canadian exports to the United States which make up a large part of the economy.

The Canadian Dollar has recently lost value against the Euro, trading in October 2003 at 0.65 Euros to the dollar.

External Links

• A History of the Canadian Dollar
• Bank of Canada - Bank Notes
• Royal Canadian Mint - Circulation Coins