Since the Government of Canada announcement in the 2018 budget that certain Bank of Canada notes will lose their legal tender status there’s been a bit of concern amongst the general public and collectors. Geoffrey Bell Auctions Ltd. would like to ease some of those fears. First a bit of background on the proposed changes.
On the Bank of Canada’s website it states that their is a plan to remove the legal tender “designation from certain bank notes that are no longer being produced—the $1, $2, $25, $500 and $1,000 notes—and they would be officially taken out of circulation.” This does not mean they will become worthless. If this is approved, “you will still be able to take it (any of these notes) to your financial institution or eventually send it to the Bank of Canada to redeem its value.”
It sounds as though the target is mainly the approximately 700,000 $1000 banknotes still in circulation, as those are known to be used in money laundering and this action would make it more difficult to use them anonymously. This will also, the government is hoping, make counterfeiting and tax evasion more difficult.
Banknote collectors do not have to worry about the legal tender status. The bills will retain their face value and, in many instances such as with the obvious example of the 1935 $25 notes that are mentioned, will still have a premium with their numismatic value. Note that many chartered bank notes are no longer redeemable, yet regularly trade among collectors as valuable notes.
In short, if you’re a collector, carry on. If you’re not a collector, but have a hoard of some of these banknotes and you want to safely convert them into cash that will retain its legal tender status, we encourage you to stop by our store, the Coin Cabinet on Main Street in Moncton, NB and we’ll be happy to help. You will even come away with a premium on any collectable notes you have.