1 Dollar (Accession of British Columbia) – Canada

In 1971, Canada’s currency situation was dominated by the global monetary crisis triggered by the United States' decision to suspend the convertibility of the US dollar into gold, effectively ending the Bretton Woods system of fixed exchange rates. As a major trading partner with the US, Canada faced immediate and profound pressure. The Canadian dollar, which had been floating independently since 1970—a rare move among major economies at the time—was already unpegged from the US dollar. This existing float provided Canada with a crucial buffer, allowing the exchange rate to absorb some of the international shock rather than forcing the Bank of Canada to engage in a desperate defence of a fixed parity.

Domestically, the situation was complex. The floating Canadian dollar appreciated significantly following the US "Nixon Shock," rising from approximately US$0.96 in early 1971 to near parity by year's end. This strength was driven by strong demand for Canada's commodity exports and high interest rates relative to the US. However, this appreciation worried exporters and policymakers, as it made Canadian goods more expensive for key foreign markets. The Bank of Canada intervened heavily in foreign exchange markets throughout the year, buying US dollars to try to temper the Canadian dollar's rise and protect export competitiveness, while also grappling with persistent inflationary pressures.

Ultimately, 1971 was a transitional year that validated Canada's earlier decision to float its currency. While the crisis destabilized the global monetary order, Canada's flexible exchange rate acted as an automatic stabilizer. The experience reinforced a policy path distinct from that of the US, setting a precedent for a managed float that would characterize Canada's approach for decades. The year concluded with the Smithsonian Agreement in December, which attempted to patch the Bretton Woods system with new fixed parities, but Canada notably chose to maintain its independent float, a decision that would become permanent.