Science Fair Project Encyclopedia
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 century and early 19th century and because of the standardization of the American dollar. The Canadas, in particular, favoured the dollar — the Bank of Montreal issued bank notes in dollars in 1817 — whereas the Atlantic colonies, with stronger ties to Britain and weaker ones to the United States, preferred the £.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 temporarily abandoned during World War I, and definitively abolished on April 10, 1933.
Canadians use coins and bills (called "bank notes" officially, but not in ordinary usage) of similar denominations to money in the United States. The historical sizes of the coins less than 50¢ are identical to those of US coins due to both nations using the Spanish dollar as the basis of their money. Quantities of US coinage circulate in Canada at par, and some Canadian coins (generally less than one-dollar) circulate in some places in the United States as well, though recent changes to the appearance and composition of recent Canadian coinage has made it more difficult for these coins to be used in the USA. In Canada, it is common to find US 1¢, 5¢, 10¢, and 25¢ coins in circulation (just like there are Australian 5, 10, 20, and 50 cent coins in New Zealand and vice versa) this interchangeability led to some concern when the United States Mint decided that the new Sacagawea dollar coin would have the same colouring as the Canadian $1 coin, the "loonie", although this proved to be a non-issue.
Canadian English, like American English, uses the slang term "buck" for a dollar; the word "loonie" is also used to distinguish the Canadian dollar from other currencies, as in "the loonie performed well today on currency markets."
In French, the currency is also called le dollar; Canadian French slang terms include piastre or piasse (equivalent to "buck," but the original word used in eighteenth-century French to translate "dollar") and huard (equivalent to "loonie").
Creating Currency: Then and Now
Canadian coins are issued by the Royal Canadian Mint and struck at their facilities in Winnipeg. Bills are issued by the Bank of Canada and printed in Ottawa. All wording on bills appears in both of Canada's official languages, English and French. The same applies to special wording on commemorative coins. All of the standard wording on coins is identical in both languages, except for the name and title of Canada's monarch, which appear in abbreviated Latin.
Canadian coins were originally issued in bronze (1¢) and silver (5¢ up). Gold coins for circulation were issued from 1912 to 1914 only. In 1922, copying an earlier change in the United States, the 5¢ coin was enlarged and changed to nickel; unlike the United States, pure nickel was used except during World War II and the Korean War. A silver dollar coin similar to that issued in the United States was first proposed in 1911 and a few trial pieces exist (one of which is in a museum in Ottawa and the other sold to a private collector a few years ago for $1.1 million Cdn.), but a proper dollar coin did not arrive until 1935. The percentage of silver in silver coins was reduced in 1919 and 1967, and in 1968 they were all replaced by pure nickel coins of the same size or nearly so. The rising price of nickel eventually forced the 5¢ coin (commonly called the "nickel") to be changed to cupro-nickel in 1982. At about the same time the 1¢ coin was twice made smaller, and in 1997 it was changed to copper-plated zinc. Finally, in 2000 all coins below $1 were changed to steel with copper or nickel plating. Unfortunately, there have been some problems with compatibility between the new coins and coin-operated devices like vending machines and public telephones. The 50¢ piece is regularly minted, but not in large quantities; it is very rare to come across this coin in everyday transactions, although an unsuccessful attempt was made by the Mint to promote the use of the coin when a special edition was released in 2002 marking the 50th anniversary of Queen Elizabeth II ascending the throne.
In recent years, the Mint has issued several series of coins with special reverses. Most of them have been 25¢ coins, particularly in the years 1999–2001. There were also versions of the $2 coin comemmorating the founding of Nunavut, and another with a family of polar bears; there have been several variants of the $1 coin, one of which featured the Canadian peacekeepers' monument in Ottawa to commemorate the award of the Nobel Peace Prize. A commemorative Terry Fox $1 coin began circulating on April 4, 2005.
On October 21, 2004, the Royal Canadian Mint unveiled a "25¢ poppy coin". This coin features a red-coloured poppy embedded in the centre of a maple leaf above a banner reading "Remember - Souvenir". While some countries' mints have produced colourized coins for market to collectors, this is the first colourized coin in general circulation in the world.
The Canadian Mint states that, with normal wear and tear, the colour should remain for a number of years, although this claim was quickly disproven. The colouration compounds are attached to the metal on a specially prepared 'dimpled' section of the coin, and seem to come off easily if deliberately rubbed. The coin will retain its full value even if the red poppy has worn off or been removed; however it is now expected that fully coloured specimens will become collectable in the future.
Recent Changes In Canadian Currency
As of fall 2004, the highest denomination coin minted in Canada is a $350 gold coin produced for the collector market, though the bullion values make its market value much higher than its face value.
The most significant recent development in Canadian currency was the withdrawal of the $1 and $2 bills in 1989 and 1996, respectively, and their replacement with coins of new design. The new $1 coin, first issued in 1987, is colloquially called the "loonie," for the loon on its reverse, and the name is frequently applied to the currency unit as well. It is made of nickel plated with "aureate bronze". The $2 coin, carrying a polar bear, is called by analogy the "toonie" (also spelled "twonie", making the etymology clearer), and has two sections differing in colour. Unlike several US attempts to introduce a dollar coin, the new coins were quickly accepted by the public, owing largely to the fact that the mint and government made it a "cold turkey" switch, removing the $1 and $2 bills from circulation.
Beginning in 2001, the Bank of Canada introduced a new series of bills: the new $10 was first issued on 17 January, 2001; the new $5 on 27 March, 2002; and the new $100, $20, and $50 bills during 2004 (in that order). The new $100 bill was issued on 17 March, 2004, the new $20 on 29 September, 2004, and the new $50 on 17 November, 2004. Called "Canadian Journey", this series features elements of Canadian heritage and excerpts from Canadian literature. The $20, $50, and $100 notes introduce watermark security features for the first time on Canadian currency; they also boast significantly expanded holographic security features. A reprint of the $10 note with these new security features will begin circulation May 18, 2005. All 2001 series notes also include the EURion constellation, on both sides of the bill. The new bills also have a "tactile feature" to indicate denomination in the upper right corner. This tactile feature is a series of raised dots but is not standard braille because the Canadian federal government, in consultation with the blind and visually impaired, decided a different system is more accessible.
The Canadian government has occasionally considered the possibility of eliminating the 1¢ coin from circulation, though as of early 2005 no serious discussion has been undertaken about dropping the coin. Likewise, reports in the wake of the $2 coin's release that Ottawa was considering a $5 coin to replace the bill have yet to be realized.
(Fr. cent noir)
|94% steel, 1.5% nickel, 4.5% copper plating||Queen Elizabeth II||Maple leaf||2.35 g||19.05 mm||1.45 mm|
|5¢||nickel||94.5% steel, 3.5% copper, 2% nickel plating||Queen Elizabeth II||Beaver||3.95 g||21.2 mm||1.76 mm|
|10¢||dime||92% steel, 5.5% copper, 2.5% nickel plating||Queen Elizabeth II||The Bluenose (a famous schooner)||1.75 g||18.03 mm||1.22 mm|
|25¢||quarter||94% steel, 3.8% copper, 2.2% nickel plating||Queen Elizabeth II||Caribou||4.4 g||23.88 mm||1.58 mm|
|50¢||50¢ piece||93.15% steel, 4.75% copper, 2.1% nickel plating||Queen Elizabeth II||Canadian coat of arms||6.9 g||27,13 mm||1.95 mm|
(Fr. dollar huard)
|91.5% nickel 8.5% bronze plating||Queen Elizabeth II||Common loon||7 g||26.5 mm||1.75 mm|
|$2||toonie or twonie||Rim — 99% nickel; core — 92% copper, 6% aluminum, 2% nickel||Queen Elizabeth II||Polar bear||7.3 g||28 mm||1.8 mm|
|Canadian Bills (Bank Notes)|
|2001 ("Canadian Journey") series (pictured top right)|
|$5||Blue||Wilfrid Laurier||Children playing hockey and other winter sports; excerpt from "The Hockey Sweater" by Roch Carrier|
|$10||Purple||John A. Macdonald||Peacekeeping forces and war memorial; excerpt from "In Flanders Fields" by John McCrae|
|$20||Green||Queen Elizabeth II||Artwork of Bill Reid; excerpt from Gabrielle Roy's novel, The Hidden Mountain.|
|$50||Red||William Lyon Mackenzie King||The Famous Five and Thérèse Casgrain; quotation from the Universal Declaration of Human Rights|
|$100||Brown||Robert Borden||Maps of Canada, historic and modern; excerpt from Miriam Waddington's poem, "Jacques Cartier in Toronto"|
|1986 ("Birds of Canada") series|
|$2‡||Terra cotta||Queen Elizabeth II||American robins|
|$5‡||Blue||Wilfrid Laurier||Belted kingfisher|
|$10‡||Purple||John A. Macdonald||Osprey|
|$20||Green||Queen Elizabeth II||Common loon|
|$50||Red||William Lyon Mackenzie King||Snowy owl|
|$100||Brown||Robert Borden||Canada goose|
|$1000‡||Reddish purple||Queen Elizabeth II||Pine grosbeak|
‡ Withdrawn from circulation. Currency withdrawn from circulation is still legal tender. As of early 2005, the 1986-series $5 and $10 bills are still occasionally encountered, but they are rapidly disappearing from regular use. $1,000 bills are no longer printed, but are still used by banks and casinos occasionally.
All 1986 and 2001 series bills measure 152.4 mm by 69.85 mm (6 by 2¾ inches).
Canadian currency rumours
A number of urban legends have circulated regarding Canadian currency.
- An American flag is flying over the Parliament buildings on Canadian paper money. This is not the case. The Birds series bills depict a Union Jack flying over Parliament on the $100; a Canadian Red Ensign (a former Canadian flag) on the $5, $10, and $50; and the modern maple-leaf flag was on the $2 and $1000 bills. (The $20 depicts the Library of Parliament, with no flag visible.) When a bill depicts a past Prime Minister, the Parliament buildings behind him are flying whichever flag Canada was using at the time of his tenure; Borden is depicted with the Union Jack because of his wartime government. Where a bill depicts the Queen, the current flag is used. Those "taken" by the rumour were likely fooled by the bills with the Red Ensign, as the flags are not shown in full colour and the contrasting upper-hoist corner somewhat resembles the American flag.
- 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 or frozen, as the centre piece would shrink more than the outside. This problem was quickly corrected, and the initial wave of "toonie popping" blew over a few months after the coin's introduction.
- The 50¢ piece is no longer minted and/or has been withdrawn from circulation. The 50¢ coin is indeed so rare that many people have never personally seen or handled one. Shop proprietors have been known to refuse to accept them as payment because they do not recognize them as Canadian currency. However, the mint continues to produce the 50¢ coin annually in small numbers; most of them are purchased by coin collectors. The remainder go to banks, though most do not give them out unless the customer specifically requests so. Given enough notice, any bank should be able to obtain them in a significant quantity for their customers.
- The crown is wrong in the Queen's portrait. When the new coin portrait was first issued in 1990 (see above), a legend surfaced that the artist had simply added the image of a crown to a portrait of the Queen, and that she was never meant to be seen wearing that headgear. This is patently false; she posed personally for the portrait wearing one of her usual crowns.
- Canadian coins are minted in Regina, Saskatchewan. As mentioned, the Royal Canadian Mint is located in Winnipeg, Manitoba. The expression D.G. Regina on the obverse of Canadian coins is Latin for by the grace of God, Queen, referring to the effigy of Elizabeth II.
Inflation in the value of the Canadian dollar has been fairly low since the 1990s, but had been severe for some decades before that.
Because about 85 per cent of their external trade is with the United States, Canadians are concerned primarily with the value of their currency against the United States dollar (USD). The Canadian dollar was more valuable than the USD for part of the 1970s, but has never regained that status. Since flirting with depths as low as US$0.62 (January 18, 2002), the dollar rallied through 2003 and 2004, reaching US$0.85 on November 26, 2004; it entered a decline from that point, however, and was back to the low .80s by year's end. Economic predictions for 2005 vary; some say that if interest rates on opposite sides of the border continue to diverge, the loonie could continue to drop. Through mid-March 2005, however, the Canadian dollar had stabilised, and traded at US$0.83 on March 18.
On world markets, the Canadian dollar tends to move in the same direction as the U.S. dollar, but less dramatically. A consequence is that an apparently rising Canadian dollar is often falling against most of the world's currencies, and vice versa. For example, the recent "rise" in the value of the Canadian dollar (as widely reported in the Canadian media) has more to do with weakness in the American dollar than the Canadian dollar itself. The Canadian dollar has recently lost value against the euro, trading in February 2004 at €0.60 to the dollar, although by October 2004 this rate had risen to €0.64.
Although there was a great deal of domestic concern when the Canadian dollar was trading much lower than the U.S. dollar, there is also concern among exporters when the dollar appreciates quickly. The rapid rise in the value of the Canadian dollar increases the price of Canadian exports to the United States, which make up a large part of the economy. On the other hand, Canadian industry enjoys advantages from a rising dollar, primarily in that it is cheaper to purchase foreign material and businesses.
Current CAD exchange rates
- A graph of the Canadian dollar's value in U.S. dollars over the past two years
- History of the earliest forms currency in Canada
- A History of the Canadian dollar
- Bank of Canada — bank notes
- Royal Canadian Mint — circulation coins
- The Where's Willy? Currency Tracking Project
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