Any Canadians who have old $1, $2, $25, $500, and $1,000 bank notes have until the end of the year to use them in day-to-day transactions before they cease to be legal tender.
As of Jan. 1, 2021 those five bank notes—none of which have been produced for many years—will have their legal tender status removed. While they can no longer be used in stores and businesses to purchase goods and services, Canadians who have some of these notes will not lose out: after Jan. 1, 2021 they can be redeemed for full face value at any financial institution or directly through the Bank of Canada.
The bank notes involved are rarely used in daily transactions. The $25 note was a commemorative one issued in May 1935 to celebrate the silver jubilee of King George V, and the $500 note was issued the same year. Both were discontinued shortly thereafter.
The $1 and $2 notes stopped being issued in 1989 and 1996 respectively, after both were replaced by coins. The $1,000 note stopped being issued in 2000 and began to be withdrawn from circulation as part of the fight against money laundering and organized crime.
While all the notes will retain their full face value, some rarer notes—such as the $25 and $500 notes—could be worth significantly more than their face value to collectors. To find out if your old bank notes have a different value to collectors, you can refer to a collector’s catalogue, or obtain an evaluation from a money dealer who caters to collectors.
Since some of these notes have not been produced in decades, they might not be recognized as legal tender by many people, meaning anyone trying to use them in a transaction might have difficulty doing so. This is one reason why they are being withdrawn. The move ensures that bank notes being used by Canadians are current and in good condition.
It also means that notes in circulation will be more difficult to counterfeit. Today’s bank notes have numerous modern security methods meant to foil counterfeiters; security methods that were not available when the older notes were being produced.
The government has indicated there are currently no plans to remove legal tender status from any other bank notes that are currently in circulation.