Canada’s official notes and coins are called legal tender
Bank notes issued by the Bank of Canada, together with coins issued by the Royal Canadian Mint, are what is known as “legal tender.” That’s a technical term meaning the Government of Canada has deemed them to be the official money we use in our country. In legal terms, it means “the money approved in a country for paying debts.”
Today, money is not just bank notes but takes many different forms: credit cards, debit cards, cheques, and contactless payments using mobile devices. You can pay with any of these forms of money, even though they are not considered “legal tender.” In fact, anything can be used if the buyer and seller agree on the form of payment. So “legal tender” has little impact on our everyday lives.
Upcoming changes to legal tender status for older bank notes
In the 2018 budget, the Government of Canada announced that it will ask for the power to be able to remove legal tender status from bank notes—something it cannot do now. If that power is approved by Parliament, the plan would be to remove that designation from certain bank notes that are no longer being produced—the $1, $2, $25, $500 and $1,000 notes—and they would be officially taken out of circulation.