Bidding A Long Overdue Farewell to the Canadian Penny

{Image from Canada’s Economic Action Plan}

To facilitate the transition to a “penny-free” economy, the Government selected February 4, 2013 as the date when the Royal Canadian Mint will no longer distribute new pennies. I will not be sad to bid farewell to the Canadian penny.  There was, I’m certain, a time in our history when the Canadian ”one-cent piece” {the official national term} was useful, but that time has long since past.  Really, what can you purchase for 1, 2, 3 or 4 cents? Nothing!

If something cost $4.99, I pass the clerk a $5.00 bill and make a hasty exit before she awkwardly offers me my $0.01 in change.  Feb. 4, a happy day for me, marks the final day that pennies will be distributed to banks.  In this century all a penny does is weigh down my wallet, fill a couple large coffee tins in the back of my bedroom closet and make me wash my hands obsessively every time I touch them.

My dad used to call pennies, coppers.  I remember asking him why and he told me that pennies were made from copper, hence, the name.   Indeed, Canadian pennies were made of copper until 1996. From 1997 to 1999 the composition was changed to copper-plated zinc and in 2000 the composition was changed again, this time to a combination of steel, nickel, and zinc with a copper plating.

Some interesting facts:

• In contrast to other coin denominations, the Government loses money on every new penny produced by the Royal Canadian Mint.
• It costs the Canadian Government 1.6 cents to produce each new penny, which exceeds the penny’s face value by 0.6 cents.
• The estimated savings for taxpayers from eliminating the penny is about $11 million a year.
• In removing its lowest-denomination coin, Canada will follow on the successful experiences of many other countries, such as Australia and New Zealand.
• As pennies are gradually withdrawn from circulation, the price of cash transactions will be rounded, either up or down, to the nearest five-cent increment.
• The Government of Canada will be adopting a rounding guideline that has been used successfully by other countries for its cash transactions with the public.
• Cheques and transactions using electronic payments -debit, credit and payments cards do not need to be rounded, as they can be settled electronically to the exact amount.
• Even though Feb. 4, 2013 is the final day that pennies will be distributed to banks, Canada’s smallest denomination will always be legal tender.
• Canadians will be able to redeem rolled pennies at their financial institutions.

I, for one, am very happy Canada is finally taking the initiative to facilitate the transition to a penny-free economy.

I would love to hear what your thoughts are on this subject.  Do you think being free of the penny is good for Canada and Canadians?

Some of the facts contained in this post were obtained from the Department of Finance Canada  and the Canada’s Economic Action Plan websites.