Coins/Notes
Canada has both paper money and coins. There are currently six coins in circulation – the penny (1 cent), nickel (5 cents), dime (10 cents), quarter (25 cents), loonie (1 dollar) and toonie (2 dollars). The toonie has 2 colours--a silver rim around a gold-coloured centre, while the slightly smaller loonie is all gold-coloured. Five bill denominations ($5, $10, $20, $50, $100) are all in different colours and the latest issues feature the Queen or former Prime Ministers on the face, and Canadian cultural and historical icons on the reverse.
A word of warning regarding $50 and $100 notes. The larger stores will more likely handle these notes, as smaller establishments and theatres are sometimes fearful of counterfeits. Many stores will not take the old $50 bill or old $100 bill, only the new $50 bill and new $100 bill, which have much better anti-counterfeiting measures (such as holographic stripes along the sides of the bill, and watermarks). So best to make sure you have a good selection of the smaller denominations if you are relying on cash.
Polymer (plastic) bank notes
Paper bank notes will begin to be phased out in favour of polymer (plastic) bank notes starting with the $100 bill in November 2011. The $50 bill will be introduced in March 2012, and the remaining denominations ($20, $10, and $5) will be issued by the end of 2013. More details on the Bank of Canada website.
Credit Cards
Most merchants accept credit cards. Visa and MasterCard are the most popular, followed by American Express. Be aware that most cards charge a transaction fee for foreign currency transactions. Sometimes, 3%. You'll want to check with your credit card company on their fee. (See this explanation of the fees, with a list of major banks' fees as of 2006.) It's a wise precaution to phone your bank and credit card company before you leave home and let them know you'll be traveling in a foreign country. If you fail to warn them, they may notice unusual transactions on your cards and they may freeze your account.
Travellers' Cheques
Travellers' cheques are less popular — and may be subject to a fee. A good way for American Auto Association (AAA) members to avoid the commission and receive a favourable exchange rate is to purchase C$ travellers cheques from AAA before the trip. Rates change over time, so check what is fair today before accepting their word for it. Don't over-purchase as you will generally lose money if you exchange your Canadian dollar checks back for other currencies at the end of your trip. Your AAA office might not always stock Canadian traveler's checks, so contact them in advance.
ATMs
ATM (Automated Teller Machine) networks includes Plus/Visa and Cirrus/Master Card. (Note: In 2008, several TripAdvisor members from the UK reported problems using their Visa and Mastercard ATM cards in Canada.) ATMs provide Canadian currency; your bank will do the conversion.
Two ATM networks offer fee-free withdrawals to some visitors:
- Canada's Scotiabank has ATMs located across the country and is a member of the Global ATM Alliance; the international ATM fee (often the equivalent of U.S.$3 - U.S.$5) will be waived for customers of other alliance members (including Bank of America, BNP Paribas, Barclays, Deutsche Bank, Westpac) when they withdraw cash using a Scotiabank ATM.
- U.S. customers of TD Bank and TD Banknorth won't pay a fee to use TD Canada Trust ATMs.
Banks or Credit Unions
Although tempting and convenient to exchange funds at your hotel’s front desk, it’s always best to exchange currency at a bank or credit union. Some banks have the daily exchange rate posted at the entrance. You will receive a much favourable rate this way. Merchants may accept U.S. (but not other foreign) currency, the exchange rate is set by each merchant and is almost always very much in their favour.
Major Banks of Canada
Canada has a variety of financial institutions. However, there are five which dominate the domestic banking industry. Branches of the "Big 5" banks will often be found in many cities from coast to coast. Many have switched to shorter names, but are sometimes referred to by their older names: RBC (Royal Bank of Canada), TD Canada Trust (Toronto-Dominion), Scotiabank (Bank of Nova Scotia), BMO (Bank of Montreal), and CIBC (Canadian Imperial Bank of Commerce). In total there are 22 domestic Banks in Canada , 26 foreign bank subsidiaries, and 23 full service foreign branches. An additional resource for banking information in Canada is the Canadian Bankers Association.
Airport Exchange kiosks
Currency exchanges at airports offer less attractive rates. The rents they pay for the premium space is passed along to the customer. Most other alternatives are more economical.
Regarding U.S. dollars
Canada is a distinct country and has its own currency. Canadian businesses taking U.S. currency do so as a courtesy, not as something that should be expected everywhere or taken for granted. Expect to receive Canadian currency for your change if they do accept U.S. cash, and recognize that you will typically get a less favourable exchange rate than at a bank or currency exchange. Comments such as "What does that cost in real money", or "Not your dollars, real dollars", although usually endured politely by long-suffering retail clerks, are not generally the mark of a valued/courteous guest, and should be avoided.