Goodbye Canadian paper money

new-polymer-bank-note-canada The Bank of Canada has decided to stop producing paper money and start issuing high-tech plastic money. The money will feature transparent maple leaf window to help reduce currency counterfeiting.

The first polymer bank notes $100 bills will arrive in November. The $50 notes are scheduled to be released in March.

Remaining notes like $20, $10 and $5 will gradually be introduced by the end of 2013.

Journey from Canadian Pound to Canadian Dollar

1841, the Province of Canada adopted a new currency system based on the Halifax rating. The new Canadian pound at that time was equal to four US dollars (92.88 grains gold). That made one pound sterling equal to 1 pound, 4 shillings, and 4 pence Canadian. That is, the new Canadian pound was worth 16 shillings and 5.3 pence sterling.

In the 1850s there was a debate on whether to adopt a sterling monetary system or a decimal monetary system based on the US dollar. Most of the local people were in favour for the the US dollar system because of the increasing trade with United States.

  • 1851, the Legislative Council and the Legislative Assembly passed an act for the purposes of introducing a pound sterling unit in conjunction with decimal fractional coinage.
  • 1853 an act of the Legislative Council and Assembly of the Province of Canada introduced the gold standard into the colony, 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 = US$ 4.86 2⁄3.
  • 1857, the decision was made to introduce a decimal coinage into the Province of Canada in conjunction with the U.S. dollar unit.
  • 1858, a new decimal coins were introduced, the colony’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.
  • 1859, Canadian colonial postage stamps were issued with decimal denominations for the first time.
  • 1860, the colonies of New Brunswick and Nova Scotia followed the colony of Canada in adopting a decimal system based on the U.S. dollar unit.
  • 1861, Canadian colonial postage stamps were issued with the denominations shown in dollars and cents.
  • 1865, Newfoundland went decimal, but unlike the Province 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.
  • 1867, the colonies of Canada, New Brunswick, and Nova Scotia were united in a federation called the Dominion of Canada and the three currencies were merged into the Canadian dollar.
  • 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 in 1873.
  • 1871, April, The Canadian Parliament passed the Uniform Currency Act 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 C$1.10 = US$1.00. This was changed to parity in 1946.
  • 1949, sterling was devalued and Canada followed, returning to a peg of C$1.10 = US$1.00. However, Canada allowed its dollar to float in 1950, whereupon the currency rose to a slight premium over the U.S. dollar for the next decade.
  • The Canadian dollar fell sharply after 1960 before it was again pegged in 1962 at C$1.00 = US$0.925. This was sometimes pejoratively referred to as the “Diefenbuck” or the “Diefendollar”, after the then Prime Minister, John Diefenbaker. This peg lasted until 1970, after which the currency’s value has floated.

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.

On July 3, 1934, 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.

In June 2011, newly designed notes printed on a polymer substrate, as opposed to cotton fibre, were announced; the first of these polymer notes, the $100 bill, began circulation on November 14, 2011, the $50 bill began circulation on March 26, 2012, the $20 denomination began circulation on November 7, 2012, and the $5 and $10 denominations began circulation on November 12, 2013.

All banknotes are currently printed by the Ottawa-based Canadian Bank Note Company under contract to the Bank of Canada. Previously, a second company, BA International, shared printing duties. In 2011, BA International announced it would shutter its banknote printing business and cease printing banknotes at the end of 2012.