In a statement, the Bank of Canada said the main reason it is issuing the new $20 bill "is to stay ahead of counterfeiting threats."
The front of the bill has a new portrait of Queen Elizabeth and the back has an image of the Vimy Memorial in France.
The $20 bill accounts for over half of all Canadian banknotes in circulation, according to the Bank of Canada.
The RCMP reports that 25,039 counterfeit $20 banknotes were passed in 2011, more than any other denomination. Fake $100 bills came second, with 19,466 passed.
New $100 polymer banknotes went into circulation in November 2011 and then $50 polymer notes began circulating in March. New $5 and $10 banknotes should be out in 2013.
While the critical advantage of polymer over paper currency is that they are expected to be more secure, they are also supposed to last 2.5 times longer than the paper banknotes.
Dramatic increase in counterfeiting, 2000-04
According to Michael Duncan, the assistant director of compliance at the Bank of Canada, "these new notes were born out of necessity."
What he means is that, from 2001 to 2004, counterfeiting skyrocketed in Canada. In 2004, 552,980 fake banknotes were passed here, almost six times the number in 2000.
Counterfeiting in Canada was also high by international standards.
In 2004, the Bank of Canada introduced new security features to the Canadian Journey series of banknotes. The holographic stripe as well as a ghost image watermark, security thread, see-through number, raised ink and fluorescence made the currency harder to copy.
Counterfeiting peaked in Canada in 2004 and has been dropping year after year since. Duncan says that the number of counterfeit notes detected fell from the historic peak of 470 per one million genuine notes in circulation to just 35 in 2011.
The polymer notes are part of a strategy the Bank of Canada adopted to respond to the increase in counterfeiting. The bank also put more effort into helping retailers recognize counterfeits, as well as into working with police.
Taking down counterfeiters
In 2006, the RCMP's Integrated Counterfeit Enforcement Team took down the largest counterfeiting operation in Canadian history. They recovered fake notes with a face value of $6.8 million.
The takedown was a result of a ten month investigation in Toronto, code-named Operation Ophir.
At the time, the RCMP attributed another $6 million in counterfeit bank notes across Canada to the plant they had dismantled, which had used complex commercial grade printing equipment to produce extremely high quality counterfeits.
Another take-down — code-named Ophir 2 — by the same RCMP team, seized $4.2 million in counterfeit $20 Canadian banknotes before they entered circulation.
Rehan Bawania, Taimaz Ejtehad and Adit Jani were arrested in the takedown. At the time they were awaiting sentencing for their roles in the 2006 bust.
Sgt. Sue MacLean was involved in both Operation Ophirs. She is now the RCMP's national counterfeit coordinator.
MacLean told CBC News in May that so far the Mounties have seen only "one very poor replication" of one of the new polymer banknotes. It was paper not polymer, so it was surprising that someone succeeded in passing it, she added.
Both the Bank of Canada and the RCMP stress the importance for people to quickly become familiar with the new notes, because periods of currency transition are often an opportune time for counterfeiters.
CBCNews.ca has a page where you see a magnified version of the new $20 note as well as an interactive page about the new security features on the Frontier series polymer banknotes.