The life expectancy of paper money varies anywhere between a day to 18-24 months for the most commonly used bank notes. The higher the denomination of the note, the longer it tends to last, and thus stay in circulation longer. The Canadian government spends a lot of money ever year related to printing costs, replacing torn and worn out bills.
Canada has decided to follow Australia's lead and begin using a polymer based material to print bank notes. Several side benefits are that they are recyclable and are cleaner in addition to being very durable.
Julie Girard, spokesperson for the Bank of Canada currency department, said the new notes will include unique security technology that will be easy to authenticate and will be very hard to counterfeit, one of many reasons the Bank of Canada continually reviews how it manufactures new series of bank notes. Girard wouldn't release any further details ahead of production plans for the new series, because of concerns relating to counterfeiting organizations trying to keep up.
It can takes years to produce new banknotes, which involves research, design, public consultation (general public, financial institutions, special need groups, police), compatibility issues, materials, security features and durability.
The current Canadian Journey series of 5 and 10 dollar denominations last approximately 1 to 2 years. 20 dollar notes last 2 to 4 years, while 100 dollar bills vary anywhere between 7 and 9 years. These notes are identifiable by the left side metallic stripe and have been in circulation since 2001 as shown in the picture. It's expected that the new polymer notes will last 2 to 3 times longer.
The most popular denomination is the 20 dollar note. The new polymer design could last the life span of the series instead of requiring constant replacement, which could save the Bank of Canada millions of dollars. It costs approximately 9 cents per unit to print bank notes, not including costs associated with distribution, security or inventory management of getting them into circulation. The destruction costs of old notes is also expensive. The Bank of Canada currently prints 600,000 new notes per year and there are approximately 1.48 billion bank notes in circulation worth 51 billion dollars in people's wallets.
Current anti-counterfeit detection technology such as scanners will likely be made obsolete as older notes are removed from circulation. The U.S. Treasury could save significant printing costs if it also followed suit. The most common counterfeited currency in the world is the greenback.