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Canadian_bills.jpg Canadian bank notes, $5, $10, $20, $50, $100 The Canadian dollar, CAD or C$, is the unit of currency of Canada. It is divided into 100 cents (¢).
HistoryCanada 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. Canadian currencyCanadians use coins and bills (called "bank notes" officially, but not in ordinary usage) of similar denominations to money in the US. 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 circulate 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 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 were 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. On October 21, 2004, the Royal Canadian Mint unveiled a "25¢ poppy coin" (http://www.mint.ca/poppy/default.asp). This coin features a red-coloured poppy embedded in the centre of a maple leaf above a banner reading "Remember - Souvenir". The mint claims that this is the first colour coin in circulation in the world. It also 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 colored specimens will become collectable in the future. 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 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.
‡ Withdrawn from circulation. Currency withdrawn from circulation is still legal tender. As of late 2004, 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 on occasion. All 1986 and 2001 series bills measure 152.4 mm by 69.85 mm (6 by 2¾ inches). Canadian currency rumoursA number of urban legends have circulated regarding Canadian currency.
ValueInflation 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. 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. External links
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