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Topic: Changes to legal tender status will take effect in 2021  (Read 350 times)
suretteda
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« on: May 31, 2019, 02:49:46 pm »

FOR IMMEDIATE RELEASE
Media Relations
613-782-8782
Ottawa, Ontario
May 31, 2019
Available as: PDF
   
In accordance with amendments to the Bank of Canada Act and the Currency Act approved by Parliament in 2018, the federal government recently decided to remove legal tender status from some older bank notes as of January 1, 2021. This change will affect the $1, $2, $25, $500 and $1,000 notes, which are no longer being produced. Essentially, this means that Canadians will no longer be able to use them in transactions.

Most Canadians will not be affected because the bank notes targeted by this announcement have not been produced in decades and are rarely used in transactions.

Importantly, these bank notes will not lose their value. Canadians can redeem them at face value or decide to keep them. Those who wish to redeem their bank notes can do so most easily at their financial institution. They can also send bank notes directly to the Bank of Canada.

The Bank of Canada supports this initiative, which helps ensure that the bank notes used by Canadians are current, in good condition, easy to use and difficult to counterfeit. 

The government has indicated there are currently no plans to remove legal tender status from any other bank notes.

Notes to editors
The $1 and $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.
Some rarer notes could be worth significantly more than face value to collectors.
The Bank of Canada has provided step-by-step instructions for sending bank notes directly to the Bank for redemption using our Bank Note Redemption Service.
For more information, read our backgrounder on changes to legal tender status.


https://www.bankofcanada.ca/2019/05/changes-legal-tender-status-take-effect-2021/
AL-Bob
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« Reply #1 on: May 31, 2019, 09:49:21 pm »

I'm a little confused.  How is this any different from the news we had last year?
coinsplus
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« Reply #2 on: June 16, 2019, 12:01:51 am »

It seemed the previous press release suggested that old notes, no longer having legal status were not redeemable at the major Canadian financial institutions, and are  only redeemable directly with the Bank of Canada.  These recent press releases clarify things further, that after 2021, the major banks will still accept them.

Here’s a link to more details and some great photos of notes:
https://www.bankofcanada.ca/banknotes/upcoming-changes-to-legal-tender-status-for-older-bank-notes

« Last Edit: June 16, 2019, 12:04:57 am by coinsplus »

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Rag Picker
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« Reply #3 on: June 16, 2019, 06:42:17 pm »

Sounds like the effected notes will be redeemable indefinitely at financial institutions.  Why would anyone go to the bother or risk of sending notes to the BOC?  Up to 2 months to settle the claim and who knows how much longer if the amount is over $1000

Any one know how to find the actual legislation that will give us specific details and timelines if any?  Seems strange that the chartered banks haven't set any limits unless the BoC is covering the return shipping.

Guess I won't be able to leave a $1 or $2 bill as tip after December 2020, but who will be enforcing this?  Perhaps staff will have a 'not wanted' poster in the lunch rooms!

 

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Beatrix
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« Reply #4 on: June 17, 2019, 03:18:12 am »

I usually never say no to someone offering me ones for face value (takes severe damage, but I've seen a few...) so I have my fair share of ratties just itching to be tip money at restaurants some day. I don't see any reason why that would change, the bills will always be worth one dollar and they are still just as beautiful.
AL-Bob
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« Reply #5 on: June 17, 2019, 10:36:39 am »

Guess I won't be able to leave a $1 or $2 bill as tip after December 2020, but who will be enforcing this

Just what I was thinking.  Legal tender or not legal tender, what is stopping people from using them in transactions if both parties agree?  I'm pretty sure there are people not accepting $1000 bills (and other denominations) right now even though they are still legal tender until the end of 2020.

So what special privilege does this "legal tender" status imply exactly?

The only thing I could think of (this is just speculation; I am not a tax lawyer) would be tax implications.  Currently you don't pay sales tax swapping five twenties for a C note.  Would swapping a $1000 note for ten $100s now become a taxable event if the $1000 is no longer legal tender?

Or likewise if you used a $1000 bill to buy a piece of furniture would this be counted as two separate transactions?  1. Buying the piece of furniture and 2. Selling this piece of paper with 1s and 0s printed on it?
 

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