Canadian currency
The Canadian dollar, CAD or C$, is the unit of currency of Canada. It is divided into 100 cents.
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 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 US, 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.
Canadian Currency
Canadians use coins and bills (called "bank notes" officially, but not in ordinary usage) of similar denominations to American money. 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. 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 cent) and silver (5 cents up). Gold coins for circulation were issued from 1912 to 1914 only. In 1922, copying an earlier change in the U.S., the 5-cent coin was enlarged and changed to nickel; unlike the U.S., pure nickel was used. 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-cent coin (commonly called the "nickel") to be changed to cupro-nickel in 1982.
At about the same time the 1-cent 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-cent piece is regularly minted, but not in large quantities; it is very rare to come across this coin in everyday transactions.
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 their back, 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 American 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.
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 will be issued on 29 September, 2004, and the $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. The $10 is slated to receive these new security features for the 2005 issue.
| 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 | 50-cent piece | 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
|
‡ Withdrawn from circulation. Currency withdrawn from circulation is still legal tender. As of mid-2004, the 1986-series $5 and $10 bills are still commonplace.
All 1986 and 2001 series bills measure 152.4 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 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.) 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. This is in fact true, and still works on modern toonies. If you throw it at the ground hard enough, a couple times, the middle will pop out. Hitting the edge on a hard surface causes deformities on the outside, which puts excess pressure on this middle part. This causes the centre part to be pushed out.
- 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.
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.
Because about 85% of their external trade is with the U.S., Canadians are concerned primarily with the value of their currency against the United States dollar (USD). Although it was more valuable than the USD for part of the 1970s, it has slipped since then 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.
On world markets, the Canadian dollar tends to move in the same direction as the US 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 euros to the dollar.
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 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.
