Hey there, time traveller!
This article was published 29/3/2012 (1610 days ago), so information in it may no longer be current.
OTTAWA -- There will be no more pennies from heaven as far as Canada's concerned.
The Royal Canadian Mint in Winnipeg will stop making pennies for Canada next fall, Finance Minister Jim Flaherty said Thursday. The measure was one of the highlights of the 2012 federal budget, even garnering its own glossy brochure in the budget documents.
It costs Canada 1.6 cents to make every one-cent coin, and it no longer makes fiscal sense to spend more than a penny is worth to make them, Flaherty said.
"The penny is a currency without any currency," Flaherty said.
Canada spends about $11 million a year minting pennies.
Flaherty hinted the penny's days were numbered nearly two years ago, but hadn't moved on the subject until Thursday.
Manitoba MP Pat Martin was nearly dancing a jig when he heard the news. The NDP MP for Winnipeg Centre has pushed for the penny to go for years.
"This feels pretty good," Martin said. "Finally, some common sense from government."
Martin introduced a private member's bill at least three times to get rid of the penny. In 2008, the House of Commons finance committee voted to study the issue, thanks to Martin's bill, but never did.
In 2010, a Senate committee studied the subject and recommended the penny be eliminated. A Bank of Canada study said the impact of eliminating the penny would be negligible. Not a single witness at the Senate committee defended the coin. Small-business owners reported it costs them money to collect and cash pennies and officials from charities reported they no longer relied on the penny for the same reason.
The mint produces about half a billion pennies a year, about half of what it produced five years ago.
The cent will remain as Canada's smallest unit for pricing goods and services but no more pennies will be distributed after next fall. All credit card, debit card and cheque transactions will be paid down to the cent. Cash transactions when pennies are not available will be rounded to the nearest five-cent increment.
The government's budget brochure on the penny makes some suggestions for how that should happen, including the rounding should occur after tax is applied to the price. The government's guideline would see a cup of coffee costing $1.78 or $1.79, or $1.81 or $1.82 rounded up or down to $1.80 for cash transactions. A coffee costing $1.83 and $1.84, or $1.86 or $1.87 would be rounded up or down to $1.85.
The Canadian Restaurant and Foodservices Association urged the government to work closely with the industry as the no-more-penny plan is implemented, noting it will affect a significant number of the restaurant industry's 18 million daily transactions. Restaurants and other businesses will have to reprogram cash registers, train staff and sometimes even reprice items to make way for a penniless society, said the CRFA.
Canada follows in the footsteps of New Zealand, Australia, Norway, Switzerland and the United Kingdom in doing away with the penny.
There is no plan to remove pennies from circulation or stop recognizing them as legal tender.
The first one-cent coin was struck on Jan. 2, 1908. The current design with two maple leaves on the same twig has been used since 1937. In 2010, Canada minted 486 million pennies.