Description
Introduced in 1858, the Canadian dollar (CAD) is the official currency of Canada. The symbol of the Canadian dollar is $, with symbols such as CA$, Can$ and C$ also sometimes used to distinguish CAD from other dollar-denominated currencies.
Being developed and distributed by Canada’s central bank, the Bank of Canada (BOC), the Canadian dollar banknotes are issued in five denominations: $5, $10, $20, $50 and $100. CAD is divided into 100 cents and its coins are issued by the Royal Canadian Mint in seven denominations: 1c, 5c, 10c, 25c, 50c, $1 and $2.
CAD acts as the fifth most-held reserve currency in the world after the US dollar (USD), the euro (EUR), British pound sterling (GBP) and the Japanese yen (JPY). The Canadian dollar, ranking as the sixth most traded currency globally, is also known as a commodity currency, due to Canada’s rich natural resources and significant raw material exports.
Economy
- Canada is a mixed economy, with the service industry accounting for over 70 percent of the total gross domestic product (GDP).
- In 2020, Canada was the ninth largest national economy by nominal GDP, with the country’s GDP being estimated at almost US$1.75 trillion.
- The main industries of the country are chemicals, wood, paper products, food products, minerals and transport equipment.
- The worth of Canada’s commodities is estimated at US$33.2 trillion, which ranks the country as the third richest country in terms of natural resources globally.
- The country has the world’s third largest oil deposits after Venezuela and Saudi Arabia.
- Canada is the fourth largest exporter of petroleum and natural gas in the world.
- Export products also include aircraft, telecommunications, timber, petroleum, crude, electronics, plastics and machinery.
- Import products are motor vehicles, machinery, equipment, durable goods, electricity, chemicals and electronics.
- Canada is perceived as one of the least corrupt countries in the world, according to the Corruption Perceptions Index.
- With over 1,500 companies listed that have a combined market capitalization of over US$3 trillion, the Toronto Stock Exchange ranks as the eighth largest stock exchange by market capitalization globally.
History
- In the early 1660s, currency was first introduced in the country because of French colonists bringing coins to Canada.
- In 1821, the first banknotes were issued by the Montreal Bank, becoming the main method of payment in the country.
- In 1841, the province of Canada, as a British colony, adopted the Canadian pound.
- In 1851, Canada passed legislation and the pound sterling was introduced.
- In 1853, the gold standard was established in the country under an act of the Parliament of the Province of Canada.
- Replacing the Canadian pound in 1858, the Canadian dollar was aligned with the US dollar with both US dollars and British sovereign gold coins also serving as legal tender in Canada.
- In 1871, the Uniform Currency Act was passed, replacing many different currencies of the provinces with the one national Canadian dollar.
- In 1934, the Bank of Canada was established, issuing the first banknotes one year later.
- During World War I, the gold standard was temporarily abandoned and dismissed in 1933.
- During World War II, the Canadian dollar was pegged to the US dollar at the fixed exchange rate of 1 USD to 1,1 CAD.
- In 1949, the use of the British pound was terminated, because of the devaluation of GBP, with the Canadian dollar remaining pegged to the USD.
- In 1950, Canada decided to have a floating currency. However, CAD was pegged to the US dollar again from 1962 to 1970.
- After 1970, the Canadian dollar became a floating currency.
Trivia
- The Canadian dollar is also called the ‘loonie’, ‘buck’, ‘huard’ and ‘piastre’.
- In 2011, the Bank of Canada released a new series of banknotes, Frontier Series, made of polymer.
- Taking the 1-cent coin, the penny, out of circulation, cash transactions are rounded to the nearest 5 cents. However, non-cash transactions are still performed to 1 cent.
