Why are each Canadian dollar bills the colour they are?

Answer 1

So that it it easier to tell them apart at a glance, minimizing the chance of using too small or too big notes by mistake.

This has happened in various places with notes of too similar color. For instance, the first issuings of the Swedish 20-kronor note was visually very similar to the 100-kronor, leading to large numbers of upset citizens, as they payed with the wrong note without noticing.

Answer 2

Different denominations of banknotes are generally a different size, colour and design. This makes it easier for people to distinguish the different values, especially people with poor or limit visual ability.