page_title: History of the Canadian dollar
section_title: First Canadian coins
hierarchical_section_title: History of the Canadian dollar / Confederation, 1867 / First Canadian coins
context_page_description: Canada has an extensive history with regard to its currencies. Prior to European contact, indigenous peoples in Canada used items such as wampum and furs for trading purposes, which continued when trade with Europeans began.
  Wampum and beaver pelts were considered currency. During the period of French colonization, coins were introduced, as well as one of the first examples of paper currency by a western government. During the period of British colonization, additional coinage was introduced, as well as banknotes. The Canadian colonies gradually moved away from the British pound and adopted currencies linked to the United States dollar. With Confederation in 1867, the Canadian dollar was established. By the mid-20th century, the Bank of Canada was the sole issuer of paper currency, and banks ceased to issue banknotes.
  Canada began issuing its own coins shortly after Confederation. In the 20th century, Canada has issued many commemorative coins into circulation, temporarily replacing current coinage designs. There also exists a long history of numismatic coin issues.
context_section_description: In 1867, the federal government planned to issue its own coinage, in denominations of one cent, five cents, ten cents, twenty-five cents, and fifty cents. The coins were similar to the coins of the Province of Canada, with the difference that the twenty-five cent coin replaced the twenty-cent coin of the provincial currency. The twenty-cent coin had never been popular, as Canadians were used to the US twenty-five cent coin, which circulated freely in the Province. The coins did not actually enter circulation until they arrived from the Royal Mint in London in 1870. The government did not issue the one-cent coin until 1876, given the amount of pre-Confederation pennies that were still in circulation.
  One issue the government faced was the large amount of United States and, to a lesser extent, British silver coins which were circulating in Ontario and Quebec. The problem was that the coins were over-rated: their face values were greater than their bullion value. Banks would only accept them at a discount, while farmers and merchants found they had to take them at par value. The difference in values affected the farmers and merchants, and also had the effect of crowding the government one-dollar and two-dollars notes out of circulation. The solution was to collect the US and British coins and export them, while providing that in the future, their par value would be fixed by statute at only 80% of their face value. Francis Hincks, back in office as federal Minister of Finance, worked with bankers led by William Weir to successfully repatriate the silver coins to the United States and Britain.
  There was a similar issue with copper coinage. Prior to Confederation, a large variety of copper coins had circulated: pennies issued by the provincial governments, US and British coppers, low-value tokens issued by private banks or merchants, even brass buttons in some cases. Working with the banks, the federal government gradually had all of the pre-Confederation and foreign pennies removed from circulation. In 1876, the Canadian one-cent coin finally was issued.
caption: Francis Hincks, Minister of Finance, who oversaw the introduction of Canadian coins and currency, and dealt with the silver and copper coinage issues
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