You’re both a little bit right and a little bit wrong. The difference is something called “seigneurage.” I hope samclem will be along with the Straight Dope, but pending his arrival and clarification, here’s what I know about it:
Prior to the 1970s, the amount of silver in a silver coin, and to a lesser extent the metal in the cent and nickel, were related to but not equal to the value of the metal. If you brought $1,000 in gold nuggets to the mint, you’d get back some amount, say $970, in gold coins, the mint keeping the difference as a coinage fee. A silver dollar was supposed to have ninety-some cents worth of silver in it, the difference being the mint’s cost of making it. Because it was a quantity of precious metal that was easily understood as being worth its face value, it was accepted as that; you didn’t have to have a set of jeweler’s scales around to weigh out what $19.95 in nuggets and gold dust was worth; you handed the cashier a double eagle and got a nickel in change. That the double eagle had only $19.10 or so of gold in it, if it were to be melted down, was something you both lived with, a part of having an intrinsic-value system of exchange.
As far as I know, this was true for gold, but not for silver. Originally, the U.S. used a bimetallic system in which gold and silver were used as the basic coins of the monetary system. The weights of the coins were defined by statute: There were 23.22 something grains of gold to the dollar, and as 480 grains made up an ounce, this resulted in the peg of $20.67 to the ounce of gold. This was established in 1837, and at the same time, the weights of silver coins were defined in such a way that 16 ounces of silver were as valuable as one ounce of gold (because you needed 16 times more silver than gold to make a coin of equal value). In the following decades, however, the price of silver fell relatively to the price of gold. This increased the incentive for individuals to coin silver and melt down gold coins into bullion so much that in 1873, private coinage of silver was discontinued. Practically, this meant the U.S. were on a pure gold standard.
Silver continued to be coined by the government, but only as subsidiary coins whose intrinsic value did not equal, not even nearly, their denomination (unlike gold coins). Because of this, they were not unlimited legal tender as gold coins were (I believe they had legal tender status only for transactions up to five or fifty dollars). Gold coins, and banknotes redeemable in gold, were unlimited legal tender.
Actually, it’s because of the nickel. Iron is not the only ferromagnetic metal; nickel and manganese will react much the same way to a magnet. We just don’t think of them that way because we encounter iron much more often than the others.
And it depends on what year the nickel is from. I can’t tell you off the top of my head which is which, but Canada has changed the composition of their coins a few times, such that some of the Canadian 5-cent pieces currently in circulation are magnetic, and some are not.
Nitpick: Not manganese. Cobalt is the other metal that is ferromagnetic (attracted by a magnet, or magnetizable, at ambient temperature. (Gadolinium is, too, but has a “Curie point” below ambient temperature.)
Perhaps your impression comes from the fact that almost any alloy of manganese with any of the ferrous metals is ferromagnetic. “Manganese steel” is largely iron, with manganese and carbon admixtures.
From 1962/05/02 until 1970/05/31, the Canadian dollar was pegged at $0.9250 USD +/-1%, under pressure from the IMF (to comply with their Bretton Woods system). In 1970, the Canadian government decided not to keep buying US dollars to keep the Canadian dollar within the 1% variance. The Canadian dollar surged immediately to $0.97 USD, and to a modern* high of $1.0443 on 1974/04/23.
So, the short answer is that yes, U.S. coins are heavier than their Canadian counter-parts.
In answer to the OP, mid-way down this page is a paragraph that discusses the evolution of Canadian coins, and how they came to be similar to U.S. coins.
In much simpler monetary policy times, the variance was much greater. For instance, at one point during the U.S. Civil War, a Canadian dollar was worth $2.65 USD.
For a hundred years + just about everyone used silver, and coins that weighed an Oz of silver and some reasonable % of that onze were common everywhere. The Thaler was about the same size as the (silver) Dollar, and so was the “piece of eight”- aka “Spanish dollar”. Sveral nations had “crowns” which were 1 oz of silver, and mostly they were about the same size as a dollar. And, many nations had a “1/10th Oz of silver” coin too. The Canucks loosely based their currency upon both the Spanish dollar also, and quite possibley- the USA coins later.
Same thing with gold coins- The British “soveriegn” is a 1/4 oz of Gold, and is nigh exactly the same size as the USA $5 gold piece- which was a 1/4 oz of gold.
The one place were America went a little off was the quarter- many other nations had a fifth instead- and Canada did this for a while (and we might have had a 20cent piece once too?). .20 is more “metric” than .25. However, the “quarter” was VERY roughly based upon the spanish dollar (the piece of eight) which was sometimes split into 8 “bits” (thus “2 bits”= 1 quarter".
So for a century or so, one could find a silver coin that was based upon a Oz, or a Gold coin upon a 1/4 Oz in many currencies (a whole OZ of gold was a LOT of money, and despite Western films to the contrary, the “double eagle” was a rather rare coin in circulation).
Were Canadian coins ever minted in the US? I believe the US mints (or used to mint) coins for some smaller nations in the Caribbean and Latin America; it could be something as simple as having used some of the same equipment at one point and then people getting used to certain sizes.
On the one occasion I had to use American money in Vancouver the merchant was happy to accept it, but gave me my change at par, in Canadian currency. I lost a little but as the purchase was small it wasn’t anything to worry about.
Do border area merchants south of the border accept Canadian money?
In reference to my last stop, in the interest of full disclosure and to avoid being accused of making things up, I should mention that the business where I used my American money was the small hotdog stand/souvenier store in Stanley Park.
Until the Royal Canadian Mint opened in 1908, Canadian coins were minted in the UK. As with the US Mint, the RCM also produces coins for other nations.
From experience, many American merchants near Toronto accept Canadian currency. I have heard that the casino in Niagara Falls, New York accepts Canadian currency to compete with the bigger casinos on the Canadian side of the border, but I do not know if that’s true.
Famously, many Detroit area merchants were briefly accepting Canadian currency at par as a gesture of thanks after Canadian Ambassador Ken Taylor helped six American hostages escape from their captors during the Iran Hostage Crisis.
American coinage is accepted in Canada at par. American bills are accepted with an appropriate exchange rate used. (about $1.15 right now I think - maybe higher). (with some exceptions).
The Royal Canadian Mint doesn’t care one iota about US pop machines, and Canadian coinage doesn’t work in them anyway.
Further, Canadian and UK coins are very similar as well - a Canadian dime and a UK (dime - don’t remember what they’re called) are pretty well identical. Their pound coins are different than our dollar coins, but the smaller stuff is pretty similar.
In fact, I would say that Canadian coins are actually CLOSER to UK coins than US coins. I say this because I never mistake a US coin for a Canadian one, but the UK coins I often have to do a double take.
And it appears from what other posters have said that par may be standard for coins (although you said dollars), so it looks like I might be wrong here anyway. I’ve never had them exchanged at par except in the smallest of stores.
Dave if your purchase is $0.38 canadian, and you pay with US coins, you have to pay $0.38 US.
If your purchase is $19.23 CAD, the entire amount you pay will be given exchange. You will pay (About) $16.34 USD. The $0.34 US will still get the exchange rate, but only because it’s attached to the $16.00.
I just found out about the money/magnet thing yesterday! It was hot dog day for the United Way, and I had some toonies to pay for a hot dog and donate. I stuck an envelope on my paper holder thingee (don’t ask, I don’t know what it’s called, either) that has two magnets and my toonies stuck! Kept me amused for at least five minutes, it did.
Gosh, that just isn’t true at all. The U.K. “dime” at 24.5 mm is much larger than the Canadian dime, which is 18mm; in fact, it’s larger than our quarter. The British FIVE pence coin looks like our dime, and they have no quarter. We don’t have a 20 cent peice, and our quarter and their 20-cent look totally different. The only coins that look the same are the pennies.
A WAG, for whatever its worth, but I would say that it could lie in the machines used to make the coins. I can’t imagine that whatever company makes these for the mints would bother to design 2 different machines, so the Mints each got 1, or however many, and they are basically the same.