How saving $43.50 created the Loonie

Saving a few bucks changed Canadian history

In the early 1980s, vending machine operators and transit systems were lobbying the Canadian government to replace banknotes with coins. At the same time, the Royal Canadian Mint was also working on a new composition for a dollar coin that they hoped would lead to increased circulation.

In 1985, a House of Commons committee released a report that stated it would be best for the dollar bill to be eliminated. For the government, the change seemed like a good idea considering dollar bills could only last less than a year before they needed to be a replaced, while a dollar coin could last upwards of 20 years. This durability would result in a cost savings of between $175 to $250 million based on government estimates.

On March 25, 1986, the Government of Canada announced that a new dollar coin would be introduced and the dollar bill would be phased out. The initial pressing of coins would be 300 million in total, costing $31.8 million, or $67.5 million today. Thanks to the difference between the cost of production and the value of the coin, it was expected that the Mint would make up to $40 million a year on the coins, and the proceeds, $60 million over five years, would be put towards funding the 1988 Winter Olympics in Calgary.

The original plan for the Loonie was to have a voyageur on the front but the master dies for the coin that were struck in Ottawa, were lost on their way to Winnipeg on Nov. 3, 1986.

This was a major problem and a House of Commons committee investigated and found that there was no documented procedure by the Mint for transporting master dies and that the die had been shipped by a local courier in order to save $43.50. This was not the first time it had happened, as an investigation found that the Mint had lost three dies in five years, but this was the most public.

Usually, the protocol is to package each side of the coin dies separately and send them in separate shipments. This was done so that if the dies every came into the hands of counterfeiters, they only had one side of the corn. For some reason, both sides of the die were shipped together. Officials waited in Winnipeg for the shipment for 11 days, but it never arrived. On Nov. 14, the RCMP were called. The Mint attempted to keep the loss under wraps from the public hoping the dies would turn up, including hiding the theft from Monique Vezina, the Minister of Supply and Services.

The RCMP investigated and came to the conclusion that the dies were lost in transit. The Mint disagreed with this, feeling that the dies had in fact been stolen. Whatever happened to them, they were never found again.

The Mint had thought to make a small alteration to the voyageur design that would hopefully reveal the location of the thief over time, but they decided that it was best just to do a new design and they would replace the voyageur with the image of a common loon floating in water, which was designed by Robert-Ralph Carmichael. Carmichael was an artist who lived near Echo Bay, Ontario and in 1992, the town would honour him with a monument in the shape of the Loonie along the highway. Carmichael passed away in 2016. Interestingly enough, Carmichael had submitted his Loon design in 1978 to be on the $100 coin but it was rejected. Thankfully for him, his design would become iconic as a result.

With the coin having a loon on the face, it would result in the name Loonie beginning to be adopted by the public.