Canadian dollar Currency

Overview of Currency

Description 

The Canadian dollar (CAD) is the official currency of Canada, introduced in 1858. It is symbolised as $, but variations such as CA$, Can$, and C$ are also sometimes used to differentiate Canadian currency from other dollar-denominated currencies. Being managed and distributed by the Central Bank of Canada (BOC), the bank issues the Canadian dollar banknotes in five denominations: $5, $10, $20, $5,0, and $100. 

The Canadian currency is subdivided into 100 cents, with its coins issued by the Royal Canadian Mint in seven denominations: 1c, 5c, 10c, 25c, $1, and $2. CAD is the fifth most held reserve currency globally, following the US dollar (USD), the euro (EUR), British pound sterling (GBP), and the Japanese Yen (JPY). As the sixth most traded currency in the world, Canada currency is categorized as a commodity currency, owing to its rich natural resources and significant exports of raw materials. 

Economy 

• Canada is the fourth-largest exporter of petroleum and natural gas around the globe. 
• It also has the third-largest oil deposits in the world after Venezuela and Saudi Arabia. 
• Canada is a mixed economy with the service sector comprising over 70% of the total gross domestic product (GDP).
• As of 2020, the country was ranked as the ninth-largest national economy by nominal GDP, with the country’s GDP estimated at nearly US$1.75 trillion. 
• Key industries of the country include chemicals, wood, paper products, food products, minerals, and transport equipment.
• Canada is estimated to have US$33.2 trillion worth of commodities, which places it as the third wealthiest nation in the world in terms of natural resources. 
• Export goods include aircraft, telecommunications, timber, petroleum, crude, electronics, plastics, and machinery. 
• Main import comprises motor vehicles, machinery, equipment, durable goods, electricity, chemicals, and electronic items. 
• As per the Corruption Perceptions Index, Canada is regarded as one of the least corrupt countries in the world. 
• The Toronto Stock Exchange, with over 1500 companies listed and a total combined market capitalization of over US$3 trillion, ranks as the eighth largest stock exchange by market capitalization in the world. 

History 

• Currency first arrived in Canada in the early 1660s, influenced by the French colonists who brought coins to Canada. 
• In 1821, the Montreal Bank issued the first banknotes, which became the main method of payment in the country. 
• By 1841, the province of Canada, as a British colony, adopted the Canadian pound, and the legislation was passed by the country, introducing the pound sterling in 1851. 
• The Canada currency (Canadian dollar) replaced the Canadian pound in 1858, aligned with the US dollar, allowing both US dollars and British sovereign gold coins to serve as legal tender in Canada.
• In 1871, the Uniform Currency Act was passed, which replaced many different currencies of the provinces and unified the currencies with the one national Canadian dollar.
• The Bank of Canada was established in 1934 and released the first banknotes one year later. 
• The gold standard was temporarily suspended during World War I and formally dismissed in 1933. 
• The Canadian currency was pegged to the US dollar during World War II at a fixed exchange rate of 1 USD to 1 1 CAD (Canada currency).
• In 1949, due to the devaluation of the GBP, the use of the British pound came to an end, with the Canadian dollar remaining tied to the USD.
• Canada decided to adopt a floating currency system in 1950, but the CAD was pegged to the US dollar again from 1962 to 1970. 
• After 1970, the CAD currency became a floating currency. 

Trivia 

• The Canadian dollar is also known as the “loonie”, “buck”, “huard”, and “piastre”.
• In 2011, the Bank of Canada introduced the Frontier Series, a new series of banknotes made of polymer. 
• The 1-cent coin (the penny) was withdrawn from circulation, resulting in cash transactions being rounded to the nearest 5 cents. However, electronic transactions can still be made to one cent.