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If you’re heading to Canada or simply curious about its currency, you’re in the right place.
The Canadian dollar (CAD) is not only colourful and practical but also reflects the unique character of the country.
Here’s everything you need to know about Canada’s money, from its history to how to use it during your travels.
What Is the Canadian Dollar (CAD)?
Canada’s official currency is the Canadian dollar, abbreviated as CAD.
You’ll most often see it represented with the $ symbol, or sometimes C$ when distinguishing it from other dollars.
The Canadian dollar is made up of 100 cents, much like the U.S. dollar.
- Symbol: $ or C$
- Division: 100 cents per dollar
- Denominations: Coins and banknotes (we’ll dive into them below)
Quick Fact:
The Canadian dollar’s value often fluctuates with commodity prices like oil and lumber, making it one of the most traded currencies in the world.
A Brief History of the Canadian Dollar
Before Canada adopted the dollar, it used a variety of currencies, including the Canadian pound.
In 1858, Canada made the switch to the decimal-based dollar to align with the U.S. currency system.
By 1871, the Uniform Currency Act was passed, which officially standardised the dollar across all provinces.
- 1858: The Canadian dollar is introduced.
- 1871: The Uniform Currency Act is established, uniting all provincial currencies under one system.
- Modern Day: Today, the Canadian dollar is widely traded and reflects Canada’s role in global commodity markets
Coins in Canada: Loonies, Toonies, and More
Canadian coins are a bit different from what you might be used to, especially with their fun nicknames like the "loonie" and "toonie."
Here’s a breakdown of the coins you’ll see when visiting Canada:
- Nickel (5¢): Made from steel, this five-cent coin is actually larger than the dime but worth less.
- Dime (10¢): The smallest coin, featuring the Bluenose, a famous Canadian schooner.
- Quarter (25¢): The silver-coloured quarter showcases a caribou on one side.
- Loonie ($1): A gold-coloured coin with a loon, the national bird of Canada, on one side.
- Toonie ($2): A two-tone coin featuring a polar bear, representing Canada’s northern wildlife.
The Missing Penny
Canada phased out the penny in 2013. It cost more to make than it was worth, so now transactions are rounded to the nearest five cents.
Colourful Canadian Banknotes
Canada’s banknotes are some of the most colourful and durable in the world.
They’re made from polymer, which makes them resistant to tears and water.
Each bill features important figures from Canadian history, along with cultural symbols and landmarks.
- $5 Bill (Blue): Shows Sir Wilfrid Laurier, Canada’s first French-speaking Prime Minister, with the Canadarm, a robotic arm used in space exploration, on the back.
- $10 Bill (Purple): Depicts John A. Macdonald, Canada’s first Prime Minister, or the newer version featuring Viola Desmond, a civil rights leader.
- $20 Bill (Green): Features Queen Elizabeth II, a nod to Canada’s connection to the British monarchy.
- $50 Bill (Red): William Lyon Mackenzie King, a Prime Minister during WWII, is on this bill.
- $100 Bill (Gold): Shows Robert Borden, Prime Minister during World War I, and highlights Canada’s contribution to medical science.
Why Is the Canadian Dollar Called a "Commodity Currency"?
Canada is rich in natural resources, and the Canadian dollar’s value is often linked to the prices of commodities like oil, minerals, and lumber.
This is why it’s sometimes called a commodity currency.
When global prices for these resources rise, the Canadian dollar typically strengthens, and vice versa.
- Oil: As one of Canada’s major exports, oil prices have a big impact on the value of the CAD.
- Lumber and minerals: These natural resources also play a crucial role in determining the currency’s value.
How Exchange Rates Work
The Canadian dollar operates on a floating exchange rate, which means its value can change depending on market demand.
If you’re planning a trip to Canada, it’s a good idea to check the current exchange rate to see how your home currency stacks up against the CAD.
The Royal Canadian Mint: The Makers Behind the Coins
Canadian coins are minted by the Royal Canadian Mint, known for its innovation in coin-making.
Besides producing Canada’s everyday coins, the Mint is famous for creating collectible coins, including glow-in-the-dark coins and limited-edition releases for major events.
- Ottawa and Winnipeg locations: The Mint has two main sites, where you can take tours to see how coins are made.
- Special Edition Coins: The Mint is renowned for its creative and collectible designs, including coins celebrating Canada’s history and culture.
Fun Fact:
The Royal Canadian Mint produces coins for over 100 countries around the world!
Wrapping It Up: Your Guide to Canadian Currency
Now that you know the ins and outs of the Canadian dollar, you’ll feel more confident when using it during your travels.
Whether you’re buying souvenirs or grabbing a coffee, the loonie and toonie will soon become familiar friends.
Canada’s currency is a reflection of its unique history and natural beauty, and handling it is part of the experience.
Ready to Explore Canada?
Now that you’ve got a handle on the Canadian dollar, why not start planning your next trip?
From bustling cities like Toronto and Vancouver to the breathtaking national parks, you’ll be all set to explore everything Canada has to offer.
