In accordance with amendments to the Bank of Canada Act and the Currency Act approved by Parliament in 2018, the federal government recently decided to remove legal tender status from some older banknotes as of January 1, 2021. This change will affect the $1, $2, $25, $500, and $1,000 notes, which are no longer being produced. Essentially, this means that Canadians will no longer be able to use them in transactions.
Most Canadians will not be affected because the bank notes targeted by this announcement have not been produced in decades and are rarely used in transactions.
Importantly, these banknotes will not lose their value. Canadians can redeem them at face value or decide to keep them. Those who wish to redeem their banknotes can do so most easily at their financial institution. They can also send banknotes directly to the Bank of Canada.
The Bank of Canada supports this initiative, which helps ensure that the banknotes used by Canadians are current, in good condition, easy to use, and difficult to counterfeit.
The government has indicated there are currently no plans to remove legal tender status from any other banknotes.
Source: Bank of Canada