Slipped quietly into the 2018 federal budget are plans by the Liberal Government to phase out several forms of paper currency and declare that they will no longer be accepted as legal tender in Canada.
While the Bank of Canada stopped printing the $1,000 bill back in 2000, there are still about 700,000 of those bills in circulation across the country. But in an effort to crack down on counterfeiting, money laundering and tax evasion, the Liberal Government announced in the budget released Tuesday that it will no longer allow those bills to be used to pay for goods and services.
The $1,000 bill has long been a favourite of organized crime because it makes transporting money easier. But it's not the only bill headed for the history books. The $500, $25, $2 and $1 bills, none of which are currently being printed by the Bank of Canada, will also no longer be usable in Canada.
"In short, removing legal tender status means that some older bank notes would no longer have the official status of being approved for payments of debt. Essentially, that means you would no longer be able to spend that 1935 $25 bank note to buy items at a store," the Bank of Canada explains in a post on its website.
While the budget didn't say exactly when the legal tender status will be withdrawn, it sought to reassure Canadians that still hold these bills that the Bank of Canada will continue to honour them and exchange them at face value. A Canadian can still deposit those notes at their local bank or credit union branch, which would in turn send them on to the central bank to be destroyed, states the budget document.
This is not the first time a monetary instrument has been phased out by Ottawa. In 2012, while announcing some austerity measures to get the federal budget back to balance, then-finance minister Jim Flaherty announced that the penny would be discontinued and cash transactions rounded.