The Bank of Canada says it’s time to push older currency out of circulation for good, meaning that the $1,000 bill you have stashed away for a rainy day will no longer be legal tender.
The move, telegraphed in a single line in Tuesday’s federal budget, would mean that the $1, $2, $25, $500 and $1,000 notes could no longer be used, in legal terms, “for paying debts” — which for most of us means using them in commercial transactions.
It won’t happen right away, though. The federal government will need to pass legislation through Parliament to give itself the authority to strip the bills of their legal status; a power it already holds over Canadian coins produced by the Royal Canadian Mint.
“The Bank of Canada supports this initiative because it can help the Bank ensure that bank notes used by Canadians are current, in good condition, easy to use and difficult to counterfeit,” the central bank said in briefing materials issued after Tuesday’s budget lockup.
Modern, polymer bills are much harder to reproduce successfully and include a number of security features that would have been unheard of when the older bills were printed.
The upcoming change is “expected to have little impact on most Canadians,” the bank added, as the bills in question are rarely used. In fact, most cashiers might not recognize some of the more obscure ones, which have become valuable collectors’ items.
Still, there are a lot of these older bills still floating around — hundreds of thousands, in fact, according to the central bank. Their total value is estimated at $1,101,782,084.
The $1 and the $2 notes were no longer issued as of 1989 and 1996, respectively, replaced with the Loonie and the Toonie. The $25 bill was a commemorative note that dates back over 80 years. Both it and the $500 note were discontinued shortly after they were issued in 1935.
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The $1,000 note was no longer issued starting in 2000, at the urging of the RCMP, because it was such a favourite among money launderers. The fact that you could carry tens of thousands of dollars in a single envelope made the bill appealing to organized crime.
“In my view, there are quite a few (bills) out there and they’re just trying to get them into circulation, so that a) they know exactly where all these bank notes are, and b) they get them back in the bank,” said Brian Bell, owner of the Coin Cabinet in Moncton, New Brunswick. The store specializes in buying and selling currency collections.
“For us it’s going to be a short-term boom, I think, because it’s going to bring out all this product that people are concerned about having,” Bell said. “We’ve been handling calls all morning on it.”
What if I have these bills?
Don’t panic. The Bank of Canada says it’s important to note that removing legal tender status “does not mean these notes will lose their face value.”
If and when the government is granted the new power, the bank says it will provide clear instructions to Canadians on how to redeem the affected notes. You can see photos of all of them here.
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Once the bills can no longer be used as legal tender, Canadians will be able — at least for a time — to bring them to their local bank and they will be honoured with the equivalent amount in legal-tender currency.
“After this period, the notes can be redeemed directly through the Bank of Canada,” the bank added.
There are currently no plans to remove legal tender status from any other bank notes, the briefing materials said.
– With files from Mike Le Couteur