Bank notes will not lose their face value

In short, removing legal tender status means that some older bank notes will no longer have the official status of being approved for payments of debt. Essentially, that means you will no longer be able to spend that 1935 $25 bank note to buy items at a store. But these bank notes will not lose their face value. If you have any of them, you will still be able to take them to your financial institution or send them to the Bank of Canada to redeem their value.

International experience

Many other countries have been doing this for years. More than 20 central banks around the world have the power to remove legal tender status from their notes, including the Bank of England, the Sveriges Riksbank (Sweden), the Swiss National Bank and the Reserve Bank of New Zealand, to name a few.

Current, high-quality and secure bank notes

Having the power to remove legal tender status from bank notes means that we can do a better job of keeping the notes in circulation current. Newer bank notes have better security features that make them difficult to counterfeit, and they are in better condition overall. Keeping notes current means they work more efficiently for all of us.

Officially taking the $1, $2, $25, $500 and $1,000 notes out of circulation will help achieve that goal. This decision will have little impact on most of us.

That’s because these bank notes have not been produced in decades. In fact, you almost never see them. Some people do not recognize them, which means they likely would not be accepted in transactions.

The $1 and the $2 notes stopped being issued in 1989 and 1996, respectively, and were replaced with coins.

The $25 note was a commemorative note. Both it and the $500 note were discontinued shortly after they were issued in 1935.

The $1,000 note stopped being issued in 2000.

By removing these old notes from circulation, we can ensure that our bank notes stay current, of high quality and secure. It also guarantees they are always easy to use.

For now, the government has indicated it has no plans to take any other bank notes out of circulation. The government will be able to remove other notes in the future as needed.