Canada is scrapping the penny, ending production this year of a coin that weighs down consumers’ pockets while adding little to their purchasing power.
The government announced in Thursday’s federal budget that it will shortly jettison the one-cent coin – a casualty of Ottawa’s drive for efficiency and thrift.
“It costs taxpayers a penny-and-a-half every time we make one,” Finance Minister Jim Flaherty told the Commons, adding the move will save taxpayers $11-million annually.
Mr. Flaherty, whose department described the penny as a “nuisance” in budget documents, said the 2.35-gram coin is now more trouble than it’s worth. “Pennies take up too much space on our dressers at home,” Mr. Flaherty added. “They take up far too much time for small businesses trying to grow and create jobs.”
The last one-cent coin will be minted this April, ending what federal officials say is close to 150 years of Canadian penny production. The Royal Canadian Mint will stop distributing pennies to financial institutions in the fall of 2012 and the government will work to withdraw one-cent coins from circulation. The increasing scarcity of pennies means Canadians will have to get used to cash transactions being rounded off if they’ve got no pennies on hand.
A study by one Canadian financial institution, Desjardins Group, estimates the economic costs of the penny for the private sector total $150-million annually. This includes counting, storing and transporting the coins.
The government had no estimates Thursday on how many pennies remain in circulation, including those piling up in jars or cans. It noted that the study by Desjardins Group estimates Canadians could be hoarding several billion pennies.
Federal officials said more than 35 billion pennies have been minted in Canada in the past 104 years. This, they noted Thursday, would weigh 94 million kilograms – or as much as 1,500 Leopard 2 tanks.
The federal government says it will encourage charities to collect pennies from Canadians and redeem them through banks and the mint as a fundraising venture.
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“It costs taxpayers a penny-and-a-half every time we make one,” Finance Minister Jim Flaherty told the Commons, adding the move will save taxpayers $11-million annually.
Mr. Flaherty, whose department described the penny as a “nuisance” in budget documents, said the 2.35-gram coin is now more trouble than it’s worth. “Pennies take up too much space on our dressers at home,” Mr. Flaherty added. “They take up far too much time for small businesses trying to grow and create jobs.”
The last one-cent coin will be minted this April, ending what federal officials say is close to 150 years of Canadian penny production. The Royal Canadian Mint will stop distributing pennies to financial institutions in the fall of 2012 and the government will work to withdraw one-cent coins from circulation. The increasing scarcity of pennies means Canadians will have to get used to cash transactions being rounded off if they’ve got no pennies on hand.
A study by one Canadian financial institution, Desjardins Group, estimates the economic costs of the penny for the private sector total $150-million annually. This includes counting, storing and transporting the coins.
The government had no estimates Thursday on how many pennies remain in circulation, including those piling up in jars or cans. It noted that the study by Desjardins Group estimates Canadians could be hoarding several billion pennies.
Federal officials said more than 35 billion pennies have been minted in Canada in the past 104 years. This, they noted Thursday, would weigh 94 million kilograms – or as much as 1,500 Leopard 2 tanks.
The federal government says it will encourage charities to collect pennies from Canadians and redeem them through banks and the mint as a fundraising venture.
Related Posts
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July 31, 2012
Canada's Penny No More, Feb 4, 2013
February 4, 2013
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