Canadians: question about $1 bills and pennies

Factual Questions
1

At work we occasionally get foreign money. Our cashiers aren’t supposed to take it, but sometimes foreign coins resemble domestic coins, especially if you’re in a hurry. In the cash office we have a bulletin board where we tack up the foreign bills and a bucket where we chuck the foreign coins. And they just sit there.

Most of our foreign cash is Canadian. We actually DO have a means of making a deposit of Canadian cash, but don’t bother because we haven’t got much of it.

BUT - if we did want to do that, are paper Canadian dollars still legal tender? Can you still turn in Canadian pennies for a bank deposit?

(Probably not worth the bother, but I’m curious from a theoretical standpoint)

2

I can’t speak to what any individual US bank’s policies may be, but absolutely, Canadian paper currency can be turned in for face value at any Canadian bank, and so can pennies.

At the present time the paper $1 and $2 bills that have been phased out remain legal tender, and I even get one on rare occasions. As the first cite notes, there is pending legislation to revoke legal tender status of these paper bills, which simply means that businesses won’t be required to accept them, but Canadian banks will always be required to redeem them. Being “legal tender” and being redeemable for face value at the bank are different things. Pennies may have to be rolled to be redeemed if there are a lot of them.

3

I doubt Canada will decide that it won’t make good on its obligations denoted by small pieces of metal or slips of paper with certain markings on them. It can’t force people to accept them in the ordinary course of business, but there would be severe confidence issues if they demonetized any currency that had previously been legal tender. You never know whether someone has their life savings in small bills and lives outside the modern communication channels - the central bank at least has to make them redeemable for currently circulating items.

4

Broomstick, how often do you get Canadian ones and twos? :confused:

I’ve not seen them in over 25 years! Where are your customers getting them?

5

I have two Canada $2 bills from the 1970s.

6

We haven’t gotten any new paper ones for… well, it was before I started working for the store. We’ve got a bunch of them pinned to the foreign money bulletin boards. We have gotten the occasional Loony, maybe once every couple years.

There are clearly instances of people digging into a piggy bank - in addition to foreign money we’ve occasionally had things like 20 Eisenhower dollars come in at one time, and the last time those were minted was the late 1970’s. But I suspect it’s mostly mistakes - somehow the foreign money gets shuffled in with the US money.

We’ve also got a bill from Iraq with Saddam Hussein’s portrait on it. Suspect that one is a few years old, too.

We also have a Wall O’ Counterfeits, which we not only display but use for training purposes,

7

Several European countries have done it with their pre-euro currency. For example, French banknotes are now totally worthless as currency. The government wrote them off in 2012 and there is no longer any place to turn them into euros.

8

In the UK, our coins and banknotes change fairly often compared to some other countries. There is always a period in which businesses accept new and old, followed by the old ones only being exchangeable at a bank (although some retailers carry on accepting them after the cut-off date). Eventually, they are only redeemable at the Bank of England in London; either in person or by post.

Of course, there does come a point where old coins and notes are worth more than their face value, although to beat inflation they have to be uncommon at the very least. For example, I can buy an old white five-pound note from 1945 for £24.00. £5 in 145 would be equivalent to around £1,000 today.

9

India recently took it to further extremes.

10

Yeah, I have a 25 dinar bill with Saddam’s proud visage. I think it is worth 2 US cents.

11

I had a coin purse full of Canadian money, so I brought it with me on my trip to Canada about 11-12 years ago.

When I tried to spend it at a fast food restaurant, the cashier looked at me like I was crazy. Since she couldn’t or wouldn’t communicate with me (this was in Quebec), I just used the credit card. I never did get to spend my Canadian money, and never knew why.

12

That’s a bummer. Were they older issue bills?

If someone whipped out a pre 1970s Canadian banknote in front of me, I, as a 46 year old Canadian, wouldn’t recognize it, having never seen one in my entire life. I can think of no other reason to not accept the money and bet she was too young to recognize it and therefore didn’t know that it was still legal tender.

Meanwhile, dozens of other Canadians would’ve happily traded you for it due to its sentimental value, myself included.

13

They weren’t that old.

Judging by Google image search, I’m thinking 1980s era.

14

Hmm. Maybe she was just a dummy! Though if she was 20 ish 20, she wouldn’t remember that money - the 80s bills with the birds on the back went out of circulation in the late 90s or early 00s.

15

Really? At around the time you would have been old enough to be aware of money, and start using it, ALL banknotes would have been of pre-1970 styles; most would have been the 1969 series, so sure, let’s call that 70s, but there would still have been a lot of 1954 series notes around. I’m the same age and remember them quite well.

16

I was born in 1972, and the first money I remember is the “Scenes of Canada” series.

These ones:

I’ve since seen the 1950s ones, only because I’ve sought them out as a collector, not because I came across them in the mid-to-late 70s as a child, when they’d already been retired from circulation for nearly 10 years. I don’t see why that would be hard to believe.

17

What is the “legal tender” distinction you are making? For example, pennies are legal tender here, but private businesses are not required to accept them. If something is no longer legal tender, but banks still must accept them, what is the practical distinction?

I have several Canadian $1 and $2 bills. I think the issue arises because U.S. currency is generally accepted by Canadian businesses (although usually at a rip off exchange rate) the reverse is not usually true. So if an American takes a vacation to Canada, he returns will the small bills and coins and they go into a container that gets stored in the attic.

As a side note, I remember being in Niagara Falls, ON in 1996 and when I received $2 in change about 90% of the time it was a bill and the other 10% it was a toonie. I thought (and still think) that it was the prettiest coin I have ever seen, so I spent most of the bills and saved the toonies. :smack:

18

“Legal tender” means that the currency is a valid way to pay off an existing debt.

Prior to the parties entering into a contract, they can agree on how a debt will be paid. If you and I enter into a contract and you stipulate that I have to pay you in gold Kruger Rands, then that’s how I’m required to pay you. I can’t try to substitute paper money.

But if we enter into a contract and it’s silent on payment, and I owe you money under the contract, I can offer you paper money. That’s a legal tender to satisfy a debt. If you refuse to take it, you can’t later sue me alleging I’ve not paid you under the contract.

As to the distinction between legal tender and demonetising, a country can state that past coins and currencies have ceased to be legal tender, but are still currency at the banks. That is, no-one but a bank is required to accept the old coins and currencies. Merchants can refuse to accept the old money and insist that you pay in legal tender, the new money. But to maintain confidence in the currency, the government provides that the banks have to exchange the old money for new money. The banks then turn the old money into the central bank for a credit.

Maintaining a limited monetisation like this is important for confidence in the currency. Some countries completely de-monetise old notes and coins. If you don’t exchange the money you have before the due date, it just becomes little pieces of paper.

Some countries have completely demonetised some of their currency, and it causes a lot of economic uncertainty. Russia did it to the rouble under Yeltsin, with the net effect that Russians trusted their government even less. India did something similar in the past couple of years, as an anti-counterfeit measure.

Complete demonetisation, especially in economies that still rely heavily on cash rather than electronic payments, can have very negative effects both internally to the country, and to the country’s reputation for fiscal stability.

That’s one of the reasons the US, the UK and Canada have such good fiscal reputations. Those three countries have never demonetised their old coins and currencies. Some old notes may need to be taken to a bank to be exchanged for modern currency, but you can always redeem them at face value.

In fact in Canada, coins and notes issued by the colonial governments, before Confederation in 1867, are still valid currency. Merchants may not have to accept them as legal tender, but the banks will take them at face value.

Of course, pre-Confederation currency will be worth more than face value now on the collector’s market, but still carry face value at the bank.

19

Does Canada not have an equivalent of the Uniform Commercial Code (UCC) that requires payments to be made in a “commercially reasonable” way?

Are you saying that if I come up north and we agree on a price for me to buy your car, say $30k Canadian ($1.89 U.S. :slight_smile: ), that you had better specify the types of payment you will accept or I can dump a truckload of pennies or nickels on your driveway and you then must accept that tender as valid payment?

In the U.S. a court would rule under the UCC that such tender is not commercially reasonable. Even if you tried to pay in $5 bills, a judge would probably tell you to get to the bank and get a cashier’s check or at least $100 bills.

ETA: What about a common law duty of “good faith and fair dealing”?

20

While many a Canadian has dreamed of paying their hydro bill with bags of pennies the Canadian Currency Act explicitly limits the number of coins that can be used as payment. Also in Wikipedia.

In the old days, a lot of stores didn’t accept $50 and $100 bills either, because of the risk of counterfeits, they became more acceptable (after close inspection) when we got those bills with embedded gold stripes, and with the modern poly banknotes they’re pretty much universally accepted (as long as it doesn’t wipe away their float at the start of the business day).