The Canadian Dollar
The Canadian dollar ( code: CAD) is the currency of Canada. As of 2011, the Canadian dollar is the 7th most traded currency in the world, accounting for 5.3% of the world's daily share. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies. It is divided into 100 cents.
Transition from Canadian Pound to Canadian Dollar
In 1841, the Province of Canada adopted a new system based on the Halifax rating. The new Canadian pound as 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 is worth 16 shillings and 5.3 pence.
The 1850s was a decade of wrangling over whether to adopt a sterling monetary system or a decimal monetary system based on the US dollar. The local population, for reasons of practicality in relation to the increasing trade with the neighboring United States, had a desire to assimilate the Canadian currency with the American unit, but the imperial authorities in London still preferred the idea of sterling to be the sole currency throughout the British Empire. In 1851, the Legislative council and the Legislative assembly 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 US dollar fractional coinage.
As a compromise, in 1853 an act of the Legislative Council and Assembly of Canada introduced the gold standard into Canada, based on both the British gold sovereign and the American gold eagle standard. This gold standard was introduced with the gold sovereign being legal tender at £1 = $US4.86 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 Canada in conjunction with the US dollar unit. Hence, when the new decimal coins were introduced in 1858, Canada's currency became aligned with the US 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 postage stamps were issued with decimal denominations for the first time.
In 1861, New Brunswick and Nova Scotia followed Canada in adopting a decimal system based on the US dollar unit. In the following year, Canadian postage stamps were issued with the denominations shown in dollars and cents.
Newfoundland went decimal in 1865, but unlike in the cases of Canada, New Brunswick, and Nova Scotia, it decided to adopt a unit based on the Spanish dollar rather than on the US dollar, and there was a slight difference between these two units. The US dollar was created in 1792 on the basis of the average weight of a selection of worn Spanish dollars. As such, the Spanish dollar was worth slightly more than the US dollar, and likewise, the Newfoundland dollar while it existed, was worth slightly more than the Canadian dollar.
In 1867, Canada, New Brunswick, and Nova Scotia united in a federation called the Dominion of Canada and the three currencies were united.
In 1871, Prince Edward Island went decimal within the US dollar unit and introduced coins for 1¢. However, the currency of Prince Edward Island was absorbed into the Canadian system shortly afterwards, when Prince Edward Island joined the Dominion of Canada.