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Some Thoughts on Canadian NCLT

Tom Becker

After reviewing the history of coinage, one can site numerous examples to support the conclusion that non-circulating legal tender coins (NCLT) were first produced centuries ago and are hardly a modern invention. Even a superficial investigation of these early NCLT's will indicate that many of them have become highly desirable items among collectors. In the United States, serious coin collectors must have had mixed feelings when in 1915 the government allowed for the production of huge gold coins of the $50 denomination. These pieces were sold at a premium with the profits used to help defray the cost of an exposition. That only 1128 were sold suggests these NCLT issues weren't overly popular. Today, a nice example might bring well over a $100,000.

I think it is well worth an inquisitive and open-minded collector's time to take on the enjoyable task of reviewing all the coins produced by Canada that may deserve to be called non-circulating legal tender. The purpose of such an investigation is to determine if any of these coins might deserve a place in the collection. What can make this project so intriguing is that every collector is allowed to develop their own set of “rules” and preferences.

What is a non-circulating legal tender coin?
Opinions may vary. For me, a NCLT is any coin produced with no intention of having it ever circulate in commerce as money-but it could. The possibility of being used as money is what separates the NCLT's from medals or privately issued coin-like products.

A survey of world coin production would provide numerous examples of NCLT coins and others that have been demonetized by the issuing government. This creates a class of coins that were not intended to circulate as money, could have been used as money but have lost that status. To the best of my knowledge, none of the NCLT issued by Canada have been demonetized.

Note: So should the early Canadian Specimen and Proof coins be classified as NCLT? I think not because aside from the finish, such coins were exact duplicates of coins produced to circulate as money. This also applies to modern coinage where the only difference between the “special” coins and those made to circulate as money is based on the finish applied during production. The NCLT label is correctly applied when no coins carrying a certain denomination, design and date were minted with the intention of having them circulate as money but were created to be sold to collectors. There are also instances where the metallic composition of the NCLT varies from that of the business strike. For example, no Canadian 25C coins using the Caribou reverse were minted for circulation in 1997 and yet such pieces were made to be included in sets of coins sold to collectors. In recent times, five cent coins identical in design to those produced for circulation have been struck in a sterling silver collector's version.

Making a further sort.
What follows are some of the considerations I make when attempting to classify Canadian NCLT coins.

Might the coin ever be practically used as money in daily commerce?For me, answering this question sheds light on the motivation of the issuing government. If the coin is indeed legal tender then what are the chances it will ever circulate along with coins originally issued for that purpose? In my opinion, the answer is entirely dependent on the amount of precious metal the coin contains.

The surest way to prevent a NCLT coin from ever being commonly used as money is to give the coin a legal tender value that is far lower than the value of the precious metal the coin contains. An extreme example would be one of the Canadian platinum coins containing 1/20 ounce of pure platinum having a legal tender “face value” of $1. Platinum would need to drop to below $20 an ounce before it would be advantageous to use this coin as money. Currently, platinum is worth more than $1200 per ounce. When such coins are produced and sold to collectors the issue price is obviously associated with the value of the precious metal rather than the legal tender value. In the numismatic marketplace we find such coins are assigned a base value according to the current price of the precious metal with the legal tender value being meaningless.

When reviewing Canadian NCLT coinage we also find instances where the legal tender value of the coin far exceeds the market value of the precious metal the coin contains. An extreme example of this occurrence would be a $30 face value coin containing less than one ounce of pure silver. When a NCLT coin of this type is issued the mint's assumption must be that the issue price of well more than twice the face value will discourage the owner from attempting to use the coin as money. As we have seen in the marketplace, this is not always the case. A person who purchased a $20 face value silver Olympic coin from the mint for $39.50 currently has the choice of trying to use the coin as money for $20 or to sell it for the value of the silver it contains and perhaps receive around $12. This situation is not at all what the issuing authority had in mind.

Most anyone who reviews the current market value of Canada's NCLT issues will reach the conclusion that a coin's original issue price seldom has any sustained influence over value and demand in the marketplace. Historically, the majority of NCLT issues have declined in value when compared to the issue price. The majority of those that now sell for more than the issue price are coin's where the value of the precious metal they contain was the determining factor in setting the issue price rather than any consideration of the coin's potential value if used as money. There are also some coins where neither the legal tender value or precious metal value plays a major role in determining marketplace value. One example would be the ten cent denomination coins struck in sterling silver. These pieces are worth too little to spend and the high issue price makes them prohibitive to melt.

What I find interesting about Canadian NCLT coin programs is the inconsistency when comparing the relative value received to the issue price. For example, in 2002 I could have purchased a sterling silver commemorative $1 coin produced with an uncirculated finish for $24.95 or a pure silver $5 denomination coin of equal quality for about $7.50. In the same year the issue price for a gold coin with a face value of $200 was $412 while the mint's price for a $300 gold coin was $1095. My mention of these two examples is not intended as criticism but to suggest collectors should be aware that the RCM doesn't seem to use any apparent standard pricing formula.

It is also worth noting that the RCM's current marketing programs don't seem to be primarily focused toward the established coin collecting community. It might well be an RCM customer's primary reason for buying a product has more to do with an interest in the subject matter than coin collecting. Such purchases often result in products being permanently removed from the numismatic marketplace.

Subjective Considerations
I doubt many collectors are making it their goal to acquire all the Canadian NCLT coins that were produced during the last several decades. Such a collection would be enormous in both size and cost. During the last few years, the growing trend among collectors of modern NCLT issues is to pick and choose from the great variety of available products. Even those who are interested in coins struck in a particular metal or a certain denomination may have decided that cost and/or subject matter makes it prudent to disregard certain issues. With NCLT coins the once popular practice of building complete sets seems to generate less interest. As a result, the modern collector is sorting through many available options and selecting only those coins offering interesting subject matter at an affordable price. In my opinion, this is exactly what collecting should be about.

Mintages & “Rarity”
Historically, a common practice among marketers of NCLT coins has been to suggest a limited mintage somehow insures the coins will be in demand and thus retain value or appreciate. That a coin is sold at an “official issue price” may lead some potential purchasers into thinking the coin's value will never decline below this price. Someone with critical things to say about NCLT coins might claim that any limits to a particular mintage were based on an estimate of how many people would be silly enough to buy the coin and the issue price is based on nothing more than the coin producer's greed. What I have found to be truly consistent is that over time collector's participating in the marketplace will decide which coins are desirable with little attention being paid to the coin producer's original claims. With the Canadian NCLT issues there is no direct correlation between mintage and desirability.

Narrowing the Field
The intrinsic value of some NCLT coins may be an important factor in limiting potential collector interest. With an ounce of platinum being worth about $1200 and one of gold at maybe $650, the historical significance or beauty of the coin's design can become secondary considerations. What many collectors may find appealing is Canada's current NCLT coin program doesn't insure that the most interesting or historically important commemorative issues appear on the highest denomination or metallically valuable coins. In my opinion, there are some wonderful coins to be found without investigating the large size gold and platinum issues.

Personal Picks

My first choice among the NCLT's are those coins that closely resemble issues in a series that was otherwise minted to circulate as money. Why not include a sterling silver coin of the same size and design next to an example of the same date coin minted to circulate? This is often an affordable way to add some diversity to a traditional set. If the Mint decided to produce five cent denomination coins in pure gold or platinum I might decide not to include them.

I'm intrigued by coins with some unique attribute. For example, Canada has made only one coin of the three cent denomination and only one $2 coin has been stuck in Piefort (double thickness). There are numerous other coins that have some reason to be considered unique based on factors other than design. It should be mentioned that a single or several distinctive attributes found in previously issued coins might be eliminated or diminished in the future. Based on past production, it seems impossible to anticipate what the RCM may decide to do next. Returning to the examples I've mentioned, there could be an extensive series of three cent coins produced in the future as well as coins made twice normal thickness.

If made to select a single type of RCM product on which to build a collection my choice would be what is often referred to as the Double Dollar set. I like this product because these sets have been annually produced since 1971. My second choice, which is shared by many current collectors, would be the $1 denomination silver commemorative issues. The Double Dollar sets allow me to combine my first and second choices while creating some limits to the collection. For example, in 1997 three different commemorative dollar coins were produced. Because I collect the Double Dollar sets I need only be concerned about the one that was included in this set. If I wish, I can acquire the others but not having these coins doesn't influence the completeness of my Double Dollar collection. The 1997 Double Dollar set also contains a twenty-five cent and $1 coin that resemble business strike issues but were not produced for circulation. Not everyone may share my opinion, but despite ever-increasing issue prices the Double Dollar set series seems to offer the best value.

I'm also attracted to NCLT coins that reference previous coins or borrow design elements from these coins. Examples being the 90th Anniversary of the Canadian Mint set of coins and the 2001 silver dollar commemorating the production of the famous 1911 coin.

I have no idea how it is actually done, but I've often wondered how the RCM decides what new NCLT coins it will produce. The enormous number of new issues created in the last decade strongly suggests some employees must be kept busy doing nothing but thinking about and planning new products.

I think it's safe to say the RCM's many diverse and innovative products have prompted coin collectors and others to offer suggestions for new coinage. If past production has responded to some ideas offered from outside the Mint then this may explain the RCM's apparent interest in moving beyond what might be perceived as the activities of a facility designed to produce a nation's coinage. Apparently, any real or perceived traditional restraints have been removed and the RCM need only decide if the number of people who might purchase a new product will generate enough profit to make it worth producing. Such a policy would explain the creation of coins obviously intended to be purchased by members of a target ethnic group or customers fond of a particular animal or plant. Perhaps the surest thing and steadiest seller would be a set of coins in a pleasing container to celebrate a birth. The RCM seems to have this market well in hand.

Passing the Test
After personally learning the hard way, I've been telling collectors to keep one thing in mind before making any purchase. Every coin you add to your collection should be judged on its individual merit. If it's not a coin that is obviously important to you then you shouldn't own it. Buying any coin simply to fill a space or achieve completeness is never a good policy. When it comes time to sell some or all of your coins, each piece will be independently evaluated.

I certainly can't fault the RCM for developing multi-year programs that encourage the customer to make a commitment to purchase a number of coins in order to complete a set. Building complete sets has long been a tradition in our hobby and the RCM has done nothing to discourage this practice. The collector of NCLT who is participating in the aftermarket can ignore any such obligations and is placed in the advantageous position of being able to pick and choose from all previous issues. For example, I'm not a big fan of aviation history. Several of the coins in the Canadian Aviation Series are quite interesting to me both for historical reasons and the attractiveness of the design. Those are the only coins I will add to my collection from this twenty coin series. No matter how large or diverse my collection may become, I can look at each item and know exactly why it is part of my collection and why I enjoy having it.

Investment Potential.
In 1967, when Canada celebrated the Confederation Centennial the numismatic world was treated to a wonderful set of coins featuring wildlife designs. This was a dramatic departure from previous Canadian coinage. The coins caught the attention of collectors around the world. It seemed like everyone wanted a set of these beautiful, innovative coins. Among the products made available to collectors was Canada's first $20 coin struck in gold and containing more than a half ounce of the pure precious metal. That U.S. laws made these coins illegal to own served to increase demand. In 1968 I thought this fantastic set that everyone was raving about would some day be worth a fortune. Forty years later, in 2007, all of the sets I purchase are resold for the scrap value of the metal they contain. Some of these beautiful coins were issued in genuine leather cases. I'm certain not to be the only dealer who has tossed hundreds of these nice boxes in the trash.

That the 1967 set didn't prove to be a sensational investment in no way diminishes the beauty and historical importance of the coins. I can't imagine a serious collector of Canadian coins dismissing these pieces as insignificant. If so, I'd enjoy hearing the reasons.

To be fair, the vast majority of modern commemorative and NCLT coins issued by various countries around the world have not been wise investment purchases for the consumer who bought them at issue price. That said, there have also been numerous exceptions. In my opinion, the exceptions that have rewarded the buyer are much like comparing performance of a baseball player who gets a hit every ten times at bat. Any success is overwhelmed by failure. For the investor the ratio of hits to misses must be far greater than the batting average of the best baseball player.

It is important to mention that numerous Canadian NCLT coins are now worth more than the issue price because the value of the metal they contain has increased in value. With the exception of the Maple Leaf series, the premium paid for the coins at the time of issue when compared to the value of the precious metal they contained would have eliminated them as a bullion related investment. For example, when the first Olympic $5 coin was issued the price to collectors was only $1 above the face value. The value of the silver it contained was about $1.50 or less. Now, using a current value for silver at $14 the coin has a melt value of around $10. The original purchaser is in a position to profit but one can hardly claim these Olympic coins were a wise investment.

In Conclusion: The Detractors
There are a good number of active coin collectors who express no interest in acquiring examples of Canada's NCLT coins. I've spoken with numerous collectors who defend their displeasure with these coins by suggesting that most products have no association with traditional Canadian numismatics. The strongest detractors are of the opinion that these modern issues are merely contrivances produced only to generate revenue for the Royal Canadian Mint. When reviewing the entire production, I must admit some of the coins seem pretty silly. On the top of my silliest list I would place the $300 gold coins produced to commemorate the 120th anniversary of the implementation of time zones. Who celebrates the 120th anniversary of anything? Is the event worthy of a $300 denomination coin? Who would purchase all six coins in the set at an issue price of $999.95 each? The RCM has produced many other coins that seem to support the notion that this mint will produce anything if they stand to profit from the endeavor. For them, numismatic credibility is not a priority.

After engaging in numerous discussions with coin dealers and experienced collectors, I've reached the conclusion that the best policy is to encourage everyone to make an objective review of this vast array of coinage and reach their own conclusion. I can find too many reasons to encourage collectors to buy certain coins and as many pieces I'd personally avoid. Anyone is welcome to find fault with my choices. They cannot deny I've taken the time to research the possibilities.

If someone were to suggest that no contemporary music produced since 1959 is worth listening to I'd reach the conclusion they are being arbitrary and in doing so missing a chance to experience some pleasing tunes. If they tried to convince me that following the teachings of Religion X is the only way to get to heaven I would give them five minutes to state their case, wish them well and probably continue on my present path.

After being involved with our hobby for some time, I've reached the conclusion that most of the participants I've met share a single shortcoming. They have not sufficiently investigated all the collecting opportunities available to them. If a collector decides they have no interest in Canada's Pre-Confederation coinage because they prefer to own large silver coins in near perfect condition instead of often worn pieces made of copper or bronze it's obvious they have surveyed both choices. The collector who makes the opposite choice because it is right for them has also done their homework. And then there is always the possibility some renegade numismatist will pop up who thinks an 1824 Penny Token, 1911 five cent and a 1997 Silver Flying Loon dollar are all neat coins to own.


Tom Becker is a regular contributor to the Canadian Coin Reference Site, you can direct your questions directly to Tom easily by E-mail: or visit Tom's website @


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