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Canada has both paper money and coins. There are currently five coins in circulation – nickel (5¢), dime (10¢), quarter (25¢), 'loonie' ($1 ) and 'toonie' ($2). The toonie has 2 colours--a silver rim around a gold-coloured centre, while the slightly smaller loonie is all gold-coloured.
There is no longer a penny coin (1¢), so amounts are rounded up or down to the closest 5¢.mp>Five bill denominations ($5, $10, $20, $50, $100) are all in different colours and the latest issues feature the Queen or former prime ministers on the face, and Canadian cultural and historical icons on the reverse.
A word of warning regarding $50 and $100 notes. The larger stores will more likely handle these notes, as smaller establishments and theatres are sometimes fearful of counterfeits. Many stores will not take the old $50 bill or old $100 bill (with images of birds on reverse), only the newer $50 bills and newer $100 bills and the brand new plastic $50 and $100 notes (see below). That's because the newer bills have much better anti-counterfeiting measures. So it's best to make sure you have a good selection of the smaller denominations if you are relying on cash.
Paper bank notes are being phased out in favour of polymer (plastic) bank notes. All denominations are now in circulation. More details are available on the Bank of Canada website. The old paper bank notes will also continue to be used until they wear out.
The polymer bank notes are thinner than paper bank notes and tend to stick together more, at least when they are brand new. Be extra careful when counting out the new bills to make sure that you don't accidentally overpay by giving the merchant bills that are stuck together. Also, be careful during the summer not to leave the polymer notes in a car as extreme heat can cause the notes to shrivel and become unusable.
Most merchants accept credit cards. Visa and MasterCard are the most popular. American Express is not as widely accepted. Recently it has been reported that European 'chip' cards may damage ('fry') the readers in POS terminals in North America due to added encrypted security in the chip. You should always carry cash with you in case your card is rejected by a gas station or other business with this terminal issue. Be aware that most cards charge a transaction fee for foreign currency transactions. Sometimes, 3%. You'll want to check with your credit card company on their fee. (See this explanation of the fees, with a list of major banks' fees as of 2006.) It's a wise precaution to phone your bank and credit card company before you leave home and let them know you'll be traveling in a foreign country. If you fail to warn them, they may notice unusual transactions on your cards and they may freeze your account.
A multi-currency account is a new type of bank account that allows you to convert currency online before your trip and then when you are traveling you use a global debit card to make purchases using Canadian dollars in your online bank account, or you can withdraw Canadian dollars from any ATM that accepts Visa or MasterCard. A multi-currency account seperates the currency exchange from the act of spending, which is different than credit cards or regular debit cards. This gives you more control over the exchange rate as you can wait until rates are more favourable and then exchange rather than at the time of purchase or need when you have no choice and pay an outrageous fee and get shorted on the rate.
Institutions that Offer Multi-Currency Accounts:
Travellers' cheques are less popular — and may be subject to a fee. A good way for American Auto Association (AAA) members to avoid the commission and receive a favourable exchange rate is to purchase C$ travellers cheques from AAA before the trip. Rates change over time, so check what is fair today before accepting their word for it. Don't over-purchase as you will generally lose money if you exchange your Canadian dollar checks back for other currencies at the end of your trip. Your AAA office might not always stock Canadian traveler's checks, so contact them in advance.
ATM (Automated Teller Machine) networks (also referred to as ABM - Automated Banking Machine) includes Plus/Visa and Cirrus/Master Card. (Note: In 2008, several TripAdvisor members from the UK reported problems using their Visa and Mastercard ATM cards in Canada.) ATMs provide Canadian currency; your bank will do the conversion.
Two ATM networks offer fee-free withdrawals to some visitors:
Although tempting and convenient to exchange funds at your hotel’s front desk, it’s always best to exchange currency at a bank or credit union. Some banks have the daily exchange rate posted at the entrance. You will receive a much favourable rate this way. Credit Unions often partner with banks for foreign exchange and therefore have a slightly less favourable rate. Merchants may accept U.S. (but not other foreign) currency, the exchange rate is set by each merchant and is almost always very much in their favour.
Canada has a variety of financial institutions. However, there are five which dominate the domestic banking industry. Branches of the "Big 5" banks will often be found in many cities from coast to coast. Many have switched to shorter names, but are sometimes referred to by their older names: RBC(Royal Bank of Canada), TD Canada Trust (Toronto-Dominion), Scotiabank (Bank of Nova Scotia), BMO(Bank of Montreal), and CIBC (Canadian Imperial Bank of Commerce). As of 2014, in total there are 29 domestic Banks in Canada , 24 foreign bank subsidiaries, and 27 full service foreign branches, and 3 foreign bank lending branches. An additional resource for banking information in Canada is the Canadian Bankers Association.
Currency exchanges at airports offer less attractive rates. The rents they pay for the premium space is passed along to the customer. Most other alternatives are more economical.
Canada is a distinct country and has its own currency. Canadian businesses taking U.S. currency do so as a courtesy, not as something that should be expected everywhere or taken for granted. Expect to receive Canadian currency for your change if they do accept U.S. cash, and recognize that you will typically get a less favourable exchange rate than at a bank or currency exchange. In recent years several Canadian businesses offer the exchange "at par" which means $1 American dollar = $1 Canadian dollar. Comments such as "What does that cost in real money", or "Not your dollars, real dollars", although usually endured politely by long-suffering retail clerks, are not generally the mark of a valued/courteous guest, and should be avoided.