Loonies and Toonies Canadian Dollar Coins

Canada has pretty much the same denominations that the U.S. has: Cents (that don't buy much, and which nobody picks up off the ground just like in the U.S.,) nickels (not much purchasing power either), dimes, quarters, dollars (called "Loonies" because the standard design depicts the bird called a Loon,) and two-dollar bi-metallic coins (called "Toonies," apparently named in honor of the one-dollar coin of which Canadians are very fond). The various Canadian coins are all the same sizes as their U.S. counterparts although they are made of very different metals.​

U.S. and Canadian Coins Are Similar

The Canadian penny has been made from copper-plated steel since 2000. The circulating Canadian nickel, dime, and quarter are all currently made from nickel-plated steel, although the dime was made of pure nickel from 1968 to 2000. Like the U.S., Canada has a half-dollar denomination that very rarely circulates, and which is only struck for Uncirculated Mint Sets currently.

The Canadian dollar coin is very nearly the same size and color as its U.S. counterpart, but again made from very different metals. The one dollar "Loonie" is 11-sided and made from an alloy the Royal Canadian Mint calls "aureate" (bronze-plated nickel.) As noted before, the two dollar "Toonie" is bi-metallic, from 1996 to 2011 it had an outer ring of pure nickel, with a center made of a primarily copper alloy. Beginning in 2012 the outer ring is made of steel with nickel plating, the inner core is made of aluminum bronze and plated with brass.

Circulating One Dollar and Two Dollar Coins

The Loonies and Toonies circulate in Canada as if things had always been this way. One of the big complaints heard from U.S. dollar coin skeptics is, "where will cashiers store the coins since there's no room in the cash drawers?" Canadian cashiers merely toss the Loonies and Toonies together in the same compartment, as they are easy to distinguish from each other, being of different sizes and colors. Canada has since stopped producing the penny in 2012 and cashiers most likely use the empty coin spot to separate the $1 and $2 coins.

So, how did the Canadians succeed in getting these dollar coins to circulate? Simple, they merely stopped producing the $1 banknote and it was a done deal. There was very little controversy or complaining; the government simply took action and people adjusted as needs must. Why Americans can't seem to take a similar step is a curious statement about our society. Even as we continue to hem and haw, the Canadians I asked said they'd be happy to see a $5 coin, too. Once they started using the higher-value coins, the Canadians immediately saw the benefits and actually consider the paper $5 to be a nuisance now!

Eliminating the Penny

In a report to the Canadian Parliament, it was revealed that the average cost of producing the Canadian one-cent coin 1.6 cents. In other words, it cost more to make the coin than it was worth. Parliament then voted to eliminate the one-cent coin and retailers were to round transactions to the nearest nickel. The last Canadian penny was minted in May 2012. The second last penny ever minted in Canada was sent to the American Numismatic Association in Colorado Springs, Colorado. The last Canadian penny ever minted was sent to the Currency Museum of the Bank of Canada in Ottawa.

Circulating U.S. Currency in Canada

Another interesting observation is how U.S. currency circulates side-by-side with Canadian species in many places, especially in transit centers and border cities. The Canadian and U.S. dollars are not worth the same amount of money. The value of U.S. currency compared to Canadian currency changes daily and is called an exchange rate. When the exchange rate is large, merchants may increase or decrease the amount of specie that will be required to purchase an item.