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- Talitha Taslim
- Posted Articles: 13
- Last Posted: 2017-08-03 08:59:33
US Dollar is Unacceptable in Canada2017-03-28 02:30:13
For several years, Canada and the United States have been trading partners. Canada is the country’s largest goods export market and second biggest goods trading partner. Official data show the two nations traded around $662.7 billion worth of products and services in 2015. With so much trading going on between both countries, it is somewhat surprising to learn that the US dollar is not accepted in Canada.
Here’s why. The Canadian Currency Act stipulates that Canadian dollar is the official currency of the country. This legislation outlines the fundamental rules encompassing the usage of the loonie. It also says all public accounts established or retained in the nation must be denominated in Canadian dollars and any reference to money or monetary value in any prosecution or other legal procedures must be valued using the currency.
In some instances, the US dollar is used in Canada. Yes, the aforementioned law states that all payments, transactions, indictments, and the like shall be denominated using the country’s official currency. But that same statute has given an exemption on all dealings valued in another currency. Private contracts can use this provision, but they need to be clearly selected by the parties. Otherwise, the loonie is the default currency.
There are various instances in which the US dollar is broadly used in the country. Major corporate dealings are frequently denominated in the greenback and reported in the media entities of the two countries. For example, Restaurant Brands International was the product of the merger between Tim Hortons and Burger King in 2014. The agreement was announced as a $12 billion dealing but investors were compensated in Canadian dollar.
Gift stores, hotels, restaurants, and other establishments accept US dollar-denominated payments. Hence, they offer a fixed exchange rate according to the current exchange rates. Tourists, out of convenience, pay a premium over the rate which they would have obtained in a bank or when using their credit card.