When Did Canada Stop Using Silver in Coins?

Canada’s coinage historically incorporated precious metals. Early Canadian coins often contained silver. The composition of circulating coinage changes over time, influenced by factors impacting the economic feasibility of materials. This evolution eventually led to the complete removal of silver from Canadian circulation coins.

Key Dates and the Transition to Base Metals

Canada’s shift away from silver in its coinage was a gradual process. Before 1920, Canadian coins, including five-cent pieces, dimes, quarters, and half-dollars, contained 92.5% silver.

A significant change occurred in 1920 when the silver content for these denominations was reduced to 80%. The five-cent coin, or “nickel,” saw its silver content entirely removed after 1921, transitioning to nickel metal in 1922. This marked an early instance of a denomination moving away from silver.

The most widespread transition for dimes, quarters, half-dollars, and dollars happened in the mid-to-late 1960s. In 1967, the silver purity of Canadian dimes and quarters was reduced to 50%, while half-dollars and dollars maintained their 80% silver content for that year. By early 1968, the Royal Canadian Mint produced its last circulation coins containing any silver. All denominations that previously included silver were switched to base metal alloys by August 1968.

Economic Factors Driving the Change

The rising market price of silver was the primary driver for Canada’s decision to eliminate silver from its circulating coinage. As the intrinsic value of the silver within the coins began to approach, and then exceed, their face value, it created an unsustainable economic situation. This meant the metal in a coin was worth more than its stated monetary value.

When the intrinsic value of a coin surpasses its face value, Gresham’s Law states that “bad money drives out good.” Individuals began hoarding silver coins or even melting them down to sell the raw metal for a profit. This led to a scarcity of coins in circulation, posing practical challenges for daily transactions and the overall economy.

The increasing cost of producing silver coinage also became prohibitive for the Royal Canadian Mint. Minting coins that cost more to produce than their face value was fiscally irresponsible. This economic pressure was not unique to Canada; many countries, including the United States, made similar transitions away from silver in their coinage around the same time for similar reasons.

Identifying Silver Content in Canadian Coins

For individuals looking to determine if a Canadian coin contains silver, the most straightforward method involves checking the coin’s date. Generally, Canadian dimes, quarters, half-dollars, and dollars minted before 1968 have some silver content. Coins dated 1967 may have either 80% or 50% silver, depending on the denomination and minting period.

For 1968 dimes and quarters, a simple magnet test can help distinguish between silver and non-silver varieties. If a 1968 dime or quarter is attracted to a magnet, it contains no silver and is made of nickel. Conversely, if the coin is not magnetic, it contains 50% silver. It is important to remember that genuine Canadian silver coins are never magnetic. Five-cent pieces minted before 1922 also contained silver, but later issues and other denominations from 1968 onward were made from base metals.