Well, I look at what happened in 1987 when the $1 note was replaced by a coin. Everyone socked away $1 notes with the expectation that they would be rare some day. The outcome is that a 1973 series $1 note will sell for $3 apiece if you're lucky.
Most people would probably agree that currency will be replaced some day, whether in the short-term or long-term. And I will assume this is correct. What is unknown is whether currency will be eliminated or not. By "eliminated", I mean the Bank of Canada will tell us that we have until a certain date to turn in our currency before it is rendered worthless. If that happens, the market for collectible notes could spin off in any direction. Small denomination notes would hold their value, but the larger ones could suffer when the face value has no guarantee of redemption. On the other hand, larger denomination notes could become quite rare and they might become more collectible with time. Or maybe circulating legal tender will become totally uncollectible as anyone born around that time will look at you with disbelief when you try to tell them about paper money just like the kids these days roll their eyes at you because you have recollections of ancient stuff like vinyl LPs and VCRs.
If circulating notes are phased out over time, meaning the BoC just stops making it but notes are allowed to retain their value in private hands, then there will be virtually no effect on the market. Paying for notes with cash will become harder, and that might affect how people buy and sell, but overall, I don't think people are going to become fascinated by paper money and rush into the market once it becomes obsolete. But I'm probably wrong as collectors always amaze me with their unpredictability, and for some reason, I can't get this image out of my head of lemmings running and falling over a cliff one after another after another after another after another...
