Canadian dollar

Canadian dollar
Currency name in local	dollar canadien
Iso code	CAD
Iso number	124
Image title 1	The one-dollar coin, known as the "loonie"
Image 2	Canadian Frontier series $20 banknote (obverse).jpg
Image title 2	A $20 banknote from the Frontier Series
Issuing authority	Bank of Canada
Issuing authority website	www.bankofcanada.ca
Mint	Royal Canadian Mint
Mint website	www.mint.ca
Printer	Canadian Bank Note Company
Printer website	www.cbnco.com
Inflation rate	2.9% (March 2024)
Inflation source date	Statistics Canada
Pegged by	Bermudian dollar (at par)
Subunit ratio 1	1/100
Subunit name 1	cent
Frequently used coins	5¢, 10¢, 25¢, $1, $2
Rarely used coins	1¢ (discontinued 2013)
Frequently used banknotes	$5, $10, $20, $50, $100
Rarely used banknotes	$1, $2 (discontinued 1989, 1996)

Canadian dollar. The Canadian dollar is the official currency of Canada, issued by the Bank of Canada and minted by the Royal Canadian Mint. It is one of the world's most traded currencies, often influenced by commodity prices and the economic policies of the Federal Reserve. The currency's symbols include $, C$, or CA$ to distinguish it from other dollar-denominated currencies like the United States dollar.

History

The Canadian dollar was first introduced in 1858, replacing the complex system of Spanish dollars, British pound sterling, and Halifax rating that had been used in the Province of Canada. This change was formalized by the Uniform Currency Act under the government of John A. Macdonald. The Currency Act of 1871 extended its use across the newly formed Dominion of Canada, unifying monetary policy after Canadian Confederation. For much of its early history, its value was pegged to the gold standard and later to the United States dollar, until it was floated in 1970 following the collapse of the Bretton Woods system. Significant milestones include the introduction of the Royal Canadian Mint in Ottawa in 1908 and the founding of the Bank of Canada in 1935, which centralized note issuance.

Coins

Coins are produced by the Royal Canadian Mint with facilities in Ottawa and Winnipeg. Denominations in circulation include the 5¢ (nickel), 10¢ (dime), 25¢ (quarter), $1 (loonie), and $2 (toonie). The iconic gold-colored loonie, featuring a common loon, was introduced in 1987 to replace the $1 banknote, while the bimetallic toonie, depicting a polar bear, entered circulation in 1996. The 1¢ coin, bearing the image of the Maple Leaf, was phased out in 2013 due to production costs exceeding face value. Commemorative coins often honor figures like Queen Elizabeth II, Terry Fox, and events such as the Olympic Games.

Banknotes

Polymer banknotes, known for their durability and advanced security features, are issued by the Bank of Canada and printed by companies like the Canadian Bank Note Company. The current series, the Frontier Series, features prominent Canadian figures on the obverse: the $5 note depicts Sir Wilfrid Laurier and the Canadarm, the $10 features Sir John A. Macdonald and the Canadian Pacific Railway, the $20 shows Queen Elizabeth II and the Vimy Memorial, the $50 portrays William Lyon Mackenzie King and the CCGS Amundsen, and the $100 highlights Sir Robert Borden and medical innovation. Previous series, like the Birds of Canada, have been gradually withdrawn.

Value

The value fluctuates on the foreign exchange market, most commonly traded against the United States dollar (USD/CAD pair). It is significantly influenced by global commodity prices, particularly crude oil, natural gas, lumber, and potash, due to Canada's resource-based economy. Monetary policy set by the Bank of Canada through its target for the overnight rate is a primary domestic driver. Historically, it traded at a significant discount to the U.S. dollar for decades but reached parity briefly in the early 1970s and again around 2007 during the commodities super-cycle. Its value is closely watched by institutions like the International Monetary Fund and affects cross-border trade with the United States.

Legal tender

All current coins and banknotes are legal tender across Canada under the Currency Act. However, regulations under the Canadian Payments Act allow businesses to set limits on payment methods; for instance, they may refuse large quantities of coins. The $1 and $2 banknotes, discontinued in 1989 and 1996 respectively, remain legal tender but are rarely seen. The Royal Canadian Mint also issues bullion coins, such as the Gold Maple Leaf, which are considered legal tender at their face value, though their market value is far higher based on London Bullion Market Association prices.

In international trade

It is ranked among the top reserve currencies by the International Monetary Fund and is held by central banks such as the Bank of England and the Bank of Japan. Its status is bolstered by Canada's membership in the Group of Seven, the Organisation for Economic Co-operation and Development, and trade agreements like the Canada–United States–Mexico Agreement. The currency is heavily used in pricing global commodities like Western Canadian Select oil and is a popular vehicle for Eurobond issuances and foreign exchange reserves. Major Canadian corporations like Enbridge, Canadian National Railway, and Royal Bank of Canada conduct significant international business, furthering its global use.

Category:Currencies of Canada Category:1858 establishments in Canada Category:Dollar