The Canadian dollar (symbol: $; code: CAD; French: dollar canadien) is the currency of Canada. It is abbreviated with the dollar sign $, or sometimes CA$, Can$[1] or C$ to distinguish it from other dollar-denominated currencies.[note 1] It is divided into 100 cents (¢).
Owing to the image of a common loon on its back, the dollar coin, and sometimes the unit of currency itself, are sometimes referred to as the loonie by English-speaking Canadians and foreign exchange traders and analysts.[2]
Accounting for approximately 2% of all global reserves, the Canadian dollar is the fifth-most held reserve currency in the world, behind the U.S. dollar, the euro, the yen and the pound sterling.[3] The Canadian dollar is popular with central banks because of Canada's relative economic soundness, the Canadian government's strong sovereign position, and the stability of the country's legal and political systems.[4
The 1850s in Canada were a decade of debate over whether to adopt a sterling monetary system or a decimal monetary system based on the US dollar. The British North American provinces, for reasons of practicality in relation to the increasing trade with the neighbouring United States, had a desire to assimilate their currencies with the American unit, but the imperial authorities in London still preferred sterling as the sole currency throughout the British Empire. The British North American provinces nonetheless gradually adopted currencies tied to the American dollar.
| Currency | Dates in use | Value in British pounds | Value in Canadian dollars |
|---|---|---|---|
| Canadian pound | 1841–1858 | 16s 5.3d | $4 |
| Canadian dollar | 1858–present | 4s 1.3d | $1 |
| New Brunswick dollar | 1860–1867 | ||
| British Columbia dollar | 1865–1871 | ||
| Prince Edward Island dollar | 1871–1873 | ||
| Nova Scotian dollar | 1860–1871 | 4s | $0.973 |
| Newfoundland dollar | 1865–1895 | 4s 2d | $1.014 |
| 1895–1949 | 4s 1.3d | $1 |
In 1841, the Province of Canada adopted a new system based on the Halifax rating. The new Canadian pound was equal to four US dollars (92.88 grains gold), making one pound sterling equal to 1 pound, 4 shillings, and 4 pence Canadian. Thus, the new Canadian pound was worth 16 shillings and 5.3 pence sterling.
In 1851, the Parliament of the Province of Canada passed an act for the purposes of introducing a pound sterling unit in conjunction with decimal fractional coinage. The idea was that the decimal coins would correspond to exact amounts in relation to the U.S. dollar fractional coinage.
In response to British concerns, in 1853, an act of the Parliament of the Province of Canada introduced the gold standard into the colony, based on both the British gold sovereign and the American gold eagle coins. This gold standard was introduced with the gold sovereign being legal tender at £1 = US$4.86+2⁄3. No coinage was provided for under the 1853 act. Sterling coinage was made legal tender and all other silver coins were demonetized. The British government in principle allowed for a decimal coinage but nevertheless held out the hope that a sterling unit would be chosen under the name of "royal". However, in 1857, the decision was made to introduce a decimal coinage into the Province of Canada in conjunction with the U.S. dollar unit. Hence, when the new decimal coins were introduced in 1858, the colony's currency became aligned with the U.S. currency, although the British gold sovereign continued to remain legal tender at the rate of £1 = 4.86+2⁄3 right up until the 1990s. In 1859, Canadian colonial postage stamps were issued with decimal denominations for the first time. In 1861, Canadian postage stamps were issued with the denominations shown in dollars and cents.