Hundreds of millions of old Canadian banknotes featuring five no-longer-used denominations are set to lose their legal-tender status at the beginning of next year.
In May 2019, the federal government received parliamentary approval to remove the legal-tender status of specific banknotes (something it was unable to do before a 2018 budget proposal supported by the Bank of Canada).
Effective Jan. 1, 2021, the country’s $1, $2, $25, $500 and $1,000 banknotes, all of which are no longer produced, will lose their legal-tender status. While businesses still have the option to accept these notes as payment, people can also redeem the old bills for their full face value through the Bank of Canada and other financial institutions.
Because of this redemption policy, the impact on the general public is expected to be “minimal,” Henry Nienhuis, then president of the Royal Canadian Numismatic Association, told CCN in 2019 (“Banknote legal-tender status to be removed in 2021,” Vol. 57 #7).
“Even though they’re removing legal tender status, which is a first for Canada – and any first is going to cause some concern among collectors and the general public base – other countries do it on a pretty regular basis, it seems.”
More than 20 central banks – including the Bank of England, Sweden’s Sveriges Riksbank, the Swiss National Bank, the Reserve Bank of New Zealand and the European Central Bank – have the power to remove the legal-tender status.