Yes - although US money is accepted in Niagara, due to it being a high tourist area, it is accepted as a courtesy and the exchange rate will likely not be in your favour. Also - it is the polite thing to do, as US dollars are not legal tender in this country.

For information on Canadian money, see this TA article:

http://www.tripadvisor.com/Travel-g153339-s601/Canada:Banks.And.Money.html

Note - you may find the exchange rate better if you withdraw funds from a Canadian ATM.

I agree that it seems the polite thing to do to use Canadian currency while in Canada. I have been traveling to Niagara Falls for 40 years and we would always exchange our money immediately after crossing over the Peace Bridge. There used to be a currency exchange/tourist info building that was, I believe, run by the government. It was extremely convenient. However, that closed down several years ago and I no longer exchange my currency. I normally use my debit/credit card for all transactions and thus avoid having to use paper/coin currency.

Occasionally, for smaller transactions I will use American currency and have never encountered an angry response for doing so.

If you plan on using mostly cash, I recommend that you do exchange your currency prior to going into Canada or shortly after arriving.

Lol, I understand your son's excitement about seeing "different" money. Growing up we always enjoyed going into the currency exchange after crossing over the Peace Bride. It always meant that we were in Canada and our vacation had begun. Also having a different country's money in our pockets was always exciting. And in those days, the exchange rate was quite high and I remember saving up $100 for the trip and after the exchange, I'd have almost $150. I felt so rich :-)

Not so anymore, the exchange rate is pretty much even. In fact, I just checked and today's rate is $1.00 American is $1.02 Canadian.

I remember changing money for our last trip, quite a few years ago, and we did come out ahead on the exchange rate, about 25% more.

Our son is very excited about the trip so I will take him to the bank for money prior to our trip. I mentioned to him that I had leftover money from years back and there was no peace in the house until I dug it out of a box in the attic. (less than $20 total) We do tend to pay cash for most expenses.

Do not get Canadian money from your US bank, you be ripped off on the exchanged rate. Put extra funds in your savings/checking account and withdraw the money from an ATM once in Canada. You get a much fairer change rate.

Yeah it can seem strange walking up to an ATM at a Canadian bank you might never heard of before but it works. Out comes the money-never failed me yet. Sometimes it declines the transaction but then the next ATM accepts it.

You don't "need" Canadian money but makes things easier and fairer.

Oh, as for the 25% exchange difference, that is long past. The Canadian dollar is worth now 98 cents to the US dollar and that is off its recent highs. For awhile the Canadian dollar was worth more then the US dollar. The days of it being 25--30% lower are long gone.

Definitely get some Canadian funds, some places can be punitive when exchanging funds....plus some places will not accept Coins...

I have found that the best current rate and fee for exchanging currency from US to Canadian is at the "Duty-Free" shop at the Border. Second best is at the Casinos. Even if you convert over more than you will need for shopping and etc, just use the left over CAD's to pay off your hotel bill or etc. No need to convert back to USD's, thus saving the exchange back fees.

http://www.bankofcanada.ca/banknotes/

These will make great souvenirs for your son . The new banknotes $100 , $ 50 and $ 20 are quite a novelty

unless you have been to Australia before.

I thought many folks dislike the new plastic currency ? They can stick together in a wallet if the notes get warm-hot. When left in a hot car-like in the summer- they are reportedly melting, shriveling and otherwise turning in on themselves.

http://consumerist.com/2012/07/13/canadas-fancy-new-plastic-money-has-the-unfortunate-problem-of-literally-melting/

http://www.huffingtonpost.ca/2013/01/16/plastic-money-canada-rick-mercer_n_2487755.html