2012.16 | New Canadian Notes & Coins – The Whole Story

The past number of months has seen an unprecedented change in the physical composition of Canadian Currency.  I have spent many hours over the past weeks and months discussing new physical currency, and I’ve not seen a single resource of detailed information on this subject anywhere.

For the greater good of Canadians trying to navigate the various changes, here is an overview of all of the changes and what retailers need to consider.

A large part of the challenge in navigating these changes is that there is no single body responsible for all of these changes together.  The Bank of Canada is responsible for design, production and distribution of Canada’s paper currency.  The Royal Canadian Mint is responsible for minting Canada’s circulation coins.  As far as the decision to eliminate the penny, the Governor of the Bank of Canada works with Canada’s Minister of Finance on monetary policy.

To provide a simple straightforward overview, all of the changes that have occurred and are planned to occur to Canada’s notes and coins are highlighted in the chart above.   Note that these dates are based on publicly available information as of April 30, 2012 and are subject to change as per the Bank of Canada and the Royal Canadian Mint.  Ensure you consult their sites to validate if any changes have occurred.

Note Changes 

To enhance security and provide more durable currency, Canada has a plan to replace all paper based currency with polymer notes.  Two out of five replacement circulation notes have been released so far, and the other three notes will be replaced in the next year or so.

Key changes include a change to polymer from paper, as well a transparent window down the side, a maple leaf with a clear border, and various other security features.  The notes are obviously physically different though they are physically the same size.

For full details on the changes to notes, I recommend the following links:

Bank of Canada – Bank Notes

Bank of Canada Polymer Notes Retailer Resources

Bank of Canada – Checking Notes

As per the notes in the Bank of Canada website, retailers and all consumer facing organizations that handle cash should ensure staff are prepared to accept the new notes.  Ensure that they are  aware of the security features of the new series.  Retailers should also ensure that any cash handling equipment is able to handle the new polymer notes.  While they are the same size and most cash drawers will not require any changes, there are many technology solutions in place that are more sophisticated and they may require changes to handle the new notes.

Retailers should be certain to contact solution providers to validate if changes are required to any equipment.

Coin Changes

As part of cost reduction initiative, $1 and $2 coins were changed to steel composition from nickel this April.  The new coins are physically the same size as the previous releases, but are noticeably lighter compared to older coins.  While I’ve not actually weighed the coins and compared them on a sensitive scale, this change may impact weight based coin counting.  The new coins have distinctive maple leaves stamped into them so that they are easily recognized as steel based coins.  Canada 2 Dollars is also stamped around the outside diameter of the $2 coins.

For full details on the changes to the $1 and $2 coins, I recommend the following link:

Royal Canadian Mint – New $1 and $2 coins

Retailers should also ensure that any cash handling equipment is able to handle the new coins.  While they are the same size and thickness and most cash drawers will not require any changes, there are many technology solutions in place that are more sophisticated and they may require changes to handle the new coins.

Retailers should be certain to contact solution providers to validate if changes are required to any equipment.

Canada Penny Elimination

As part of the 2012 Canada Federal Budget, it was made public that the penny will be discontinued in 2012 based on their declining utility and a cost of production that exceeded value.  The coins are no longer being minted as of April 2012, and the Government of Canada has indicated that Financial Institutions will no longer distribute pennies as of Fall 2012.

Canada will use a rounding strategy like those used in Australia, New Zealand and Sweden to make the change.  All cash transactions will be rounded to the nearest nickel after applicable taxes.  Transactions ending in .01 and .02 will round to .00.  Transactions ending in .03 and .04 will round to .05.  Transactions ending in .06 and .07 will round to .05.  Transactions ending in .08 and .09 will round to .10.

Debit and credit based transactions will still be rounded to .01.

For full details on the changes to the $1 and $2 coins, I recommend the following links:

Budget 2012 – Eliminating the Penny

Fact Sheet and FAQ – Businesses

Fact Sheet and FAQs – Rounding

The Penny Elimination project represents some interesting challenges to retailers.  With the rather vague deadline of Fall 2012, it’s unclear when the new rounding process should be implemented.  I expect the Retail Council of Canada to call for some additional clarity around the timing as fall 2012 approaches.  I encourage retailers to voice these or any other concerns to the RCC.

While the government documentation notes that there are no changes required to cash registers, and that is technically true, there will be some work required.  Large scale retailers are unlikely to leave the rounding in the hands of store staff, and change calculations should be rounded based on tender.  There will also be changes required to self service solutions like ticketing kiosks and self-checkouts to accommodate the logic changes to transactions.

Retailers should be certain to contact their solution providers to validate what changes are required and to get a plan in place to time the change.

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