Can I use American Money in Canada?
Though the United States and Canada have a long standing relationship (traded over $700 billion in 2016 alone), they are two different countries with different borders, different governments, and different currencies. Which leads us to the question, "Can I use American Money in Canada?" Short answers no, long answer yes, with a but!
Short Answer: No
According to the Canadian Currency Act, the Canadian dollar is the official currency of the multi-cultural country. The law also states that all accounts maintained or founded in the country must be in Canadian funds. This technically means that American money is not accepted in Canada.
Secondly, Canada is a developed country and unlike third world countries where the US dollar is highly valued, here it is more viable to accept the Canadian dollar. For example, when a Canadian enterprise takes American money it is actually more expensive and uneconomical as they will have to pay more to exchange the money in a Canadian bank. So when any business in the country accepts your American dollars, just know that they are only doing you a favor.
Besides, keep in mind that most small businesses that choose to accept American money usually set their own rates, so do not be surprised if you find the exchange rate absurd or not in your favor. You will likely receive your change in Canadian money. On the other hand, public transit machines, vending machines, parking meters or anything that requires coins will only accept Canadian funds. So if you are traveling to Canada, it is strongly recommended that you use your ATM bank card to withdraw money in Canadian dollars. Confirm with your bank to find out which Banks in the country allow that and then utilize that opportunity for the cheapest fees.
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Long Answer: Yes
Though the Canadian Currency act forbids the use of any other currency other than the Canadian dollar when doing any transaction in the multi-lingual country, there are some exceptions when it comes to private transactions and contracts. The same act states that it is only legal to use another currency in cases where the "contracts and transactions are executed, made or done in another foreign currency that is accepted by all the parties involved." This technically means that American dollars can be used legally only in private transactions and if all the interested parties accept it.
In addition, there are many other scenarios where American money is used in Canada. For example, it is very common for gift shops, restaurants, and hotels to take US dollars. Large corporate deals also are usually done in U.S dollars but reported in both currencies in the media. The merger between Burger King Worldwide Inc and Tim Horton's Inc is a good example.
So, Can I use American Money in Canada?
Major hotels and retailers will often accept payments in American money, but smaller businesses in more rural destinations may not want the hassle that usually comes with exchanging US dollars into Canadian dollars, so they may not accept your money. Also, note that businesses that accept American money often set their own rates which will likely be unfavorable to you. But popular destinations and border towns will not just accept American currency but will also give better exchange rates.
If you are traveling to Canada, try to get some Canadian money. You can do this at a Canadian bank for better rates or at an exchange store. Also, you can use your bank card to withdraw your US dollars in Canadian dollars or for point of purchase (Visa and Master Cards are widely accepted in the country).
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