02/28/2018 12:24 EST | Updated 03/01/2018 11:48 EST

Canada Federal Budget Pulls The Plug On Banknotes Worth $1,000, $500 And Others

Large-denomination bills are all too often used in crime, the government says.

Bad news, Canadian big spenders: You're not going to be able to throw around those thousand-dollar bills like you used to.

The 2018 federal budget, released Tuesday, includes an item that will see a number of Canadian banknotes lose their status as "legal tender," meaning they will no longer be accepted as payment in stores.

All the bills that are about to lose their legal status are ones that have been discontinued, including the $1,000 and $500 bills, as well as a rare $25 bill produced in 1935, and the $1 and $2 bills that were replaced by the loonie and toonie decades ago, but still have legal status.

Bank of Canada
Bank of Canada

It's part of an effort to reduce criminal activity tied to paper currencies.

"Large denominations facilitate illicit activities such as counterfeiting, money laundering and tax evasion," the government said in its budget documents.

But people holding these banknotes need not worry — they will still be able to return the bills to a financial institution.

"These bank notes would not lose their face value," the Bank of Canada explains on its website. "If you have one of them, you will still be able to take it to your financial institution or eventually send it to the Bank of Canada to redeem its value."

Bank of Canada
A 1935 commemorative $25 bill. The bill will no longer be legal tender in Canada, under plans unveiled in the Liberals' 2018 budget.
Bank of Canada

The Bank of Canada estimated in 2012 that nearly a million $1,000 banknotes were still in circulation, despite the bill having been discontinued in 2000. Money-laundering experts said the money was most likely in the hands of criminal groups.

Until now, Canadian banknotes have never lost their legal status, the BoC says, meaning even very old bills can be used for payments. But many older bills are likely worth more to collectors than their face value.

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Technically, the federal government doesn't have the authority to cancel banknotes' legal status, so the budget move will require a change in legislation, the BoC says.

The federal government already has this authority over coins produced by the Royal Canadian Mint, which is why the previous Conservative government was able to get rid of the penny without legislative changes.

A recent report from Desjardins indicated that Canada could soon get rid of the nickel as well.

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