Hamhuis Hip Check Posted March 29, 2012 Share Posted March 29, 2012 Canada Eliminates Penny Costing Penny-and-a-Half to Make By Jacqueline Thorpe - Mar 29, 2012 1:57 PM PT Canada will withdraw the penny from circulation this year, saving taxpayers about C$11 million ($11 million) annually and forcing retailers to round prices to the nearest nickel, the government announced in its budget today. The Royal Canadian Mint, which has produced 35 billion pennies since it began production in 1908, will cease distribution this fall due to the coin’s low purchasing power. Production and handling cost for the one-cent coin are a C$150- million drag on the economy, according to a 2006 study by Desjardins, a Levis, Quebec-based financial institution. Enlarge image Canadian coins in Toronto. Photographer: Brent Lewin/Bloomberg “Pennies take up too much space on our dressers at home,” Finance MinisterJim Flaherty said in the text of his budget speech in Ottawa. “They take up far too much time for small businesses trying to grow and create jobs.” Business groups welcomed the move, which follows other countries such as Australia, Brazil and Sweden, and economists said it would have little impact on inflation. “If there’s a rounding up, you’d see a rounding down somewhere else,” said Craig Wright, chief economist at Royal Bank of Canada. The savings to financial institutions alone may be about C$20-million a year, as banks reduce transportation, storage and handling costs, the study estimated. It costs the government 1.6 cents to produce one penny, which has been made of copper-plated zinc and copper-plated steel since 1997. Stuck Down the Sofa “It’s a cost to the government that can be easily saved, given that most pennies get stuck down the back of the sofa or under the streetcar,” said David Tulk, chief Canada macroeconomic strategist at TD Securities Inc., a unit of Toronto-Dominion Bank. (TD) The penny, with two maple leafs on one side and Queen Elizabeth II on the other, can continue to be used in payments. As they are gradually withdrawn from circulation, price rounding on cash transactions will be required, the government said. The calculation of the federal goods and services tax and provincial sales taxes will continue to be calculated to the penny and added to the price, with rounding only taking place on the total payment. Non-cash payments on checks and credit cards will continue to be rounded to the nearest cent. “If businesses round cash transactions to the nearest five-cent increment, any gains or losses relating to cash transactions (a maximum of two cents per transaction) will balance out over time,” the government said in its budget documents. Increase Efficiency Retailers and other businesses can continue to price goods and services in one-cent increments and there will be no need to reprogram cash registers, according to the government. Catherine Swift, president and chief executive officer of the Canadian Federation of Independent Business, said the move will increase efficiency. “It has been a long time coming,” she said. “It’s been a real pain more than anything else. We’ve actually polled our members on this and they’re supportive.” The mint used 1.5 million kilograms of steel, 70,000 kilograms of copper and 23,000 kilograms of nickel last year to make pennies at its facility in Winnipeg, Manitoba. It put 1.3 billion coins in circulation in 2011, half of which were freshly minted and half made from recycled materials. http://www.bloomberg.com/news/2012-03-29/canada-eliminates-penny-that-costs-penny-and-a-half-to-make.html Link to comment Share on other sites More sharing options...
The Magician Posted March 29, 2012 Share Posted March 29, 2012 I've been waiting for this to happen for a long time Link to comment Share on other sites More sharing options...
Hobble Posted March 29, 2012 Share Posted March 29, 2012 Hope businesses don't round up! My donut might sky rocket from 1.01 to 1.05! Link to comment Share on other sites More sharing options...
SixtyEight Posted March 29, 2012 Share Posted March 29, 2012 my penny collection is now worth nothing???? I WANT MY $13.52!!! Link to comment Share on other sites More sharing options...
pimpcurtly Posted March 29, 2012 Share Posted March 29, 2012 So will there be a "leave a nickel, take a nickel" tray now? Link to comment Share on other sites More sharing options...
DarthNinja Posted March 29, 2012 Share Posted March 29, 2012 http://www.youtube.com/watch?v=eKPxkOHxAO8 Link to comment Share on other sites More sharing options...
MC Fatigue Posted March 29, 2012 Share Posted March 29, 2012 Good call. Bout time, lol. Link to comment Share on other sites More sharing options...
Buggernut Posted March 30, 2012 Share Posted March 30, 2012 Good riddance. Now can they downsize all the other coins, so that the loonies and toonies don't take up so much space in our pockets? Link to comment Share on other sites More sharing options...
nucks07 Posted March 30, 2012 Share Posted March 30, 2012 penny for your thoughts? wait your thoughts gunna cost me a nickel now? no thanks, keep it to yourself pal Link to comment Share on other sites More sharing options...
soshified Posted March 30, 2012 Share Posted March 30, 2012 Dammit! I knew i should have exchange my pennies when i had the chance Link to comment Share on other sites More sharing options...
flapjacks Posted March 30, 2012 Share Posted March 30, 2012 Oh my God, they killed Penny! Link to comment Share on other sites More sharing options...
dKs89 Posted March 30, 2012 Share Posted March 30, 2012 Oh my God, they killed Penny! Link to comment Share on other sites More sharing options...
Grapefruits Posted March 30, 2012 Share Posted March 30, 2012 looks like I'll have to roll all my pennies and take them in. It's gonna take forever. I've been keeping them for the past 10 years or so. Link to comment Share on other sites More sharing options...
Bure1994Mclean Posted March 30, 2012 Share Posted March 30, 2012 A pleasant surprise and about time...I find them a nuisance. Link to comment Share on other sites More sharing options...
YYC Canuck fan Posted March 30, 2012 Share Posted March 30, 2012 Now what are we supposed to fling at strippers and hookers to piss them off?? Link to comment Share on other sites More sharing options...
G.K. Chesterton Posted March 30, 2012 Share Posted March 30, 2012 Someone needs to knock some cents into the government. Link to comment Share on other sites More sharing options...
key2thecup Posted March 30, 2012 Share Posted March 30, 2012 Hope businesses don't round up! My donut might sky rocket from 1.01 to 1.05! Link to comment Share on other sites More sharing options...
davebabychisback Posted March 30, 2012 Share Posted March 30, 2012 "A penny saved is a penny earned" "What's a penny Dad?" "Oh nevermind." Link to comment Share on other sites More sharing options...
Squeak Posted March 30, 2012 Share Posted March 30, 2012 Dammit! I knew i should have exchange my pennies when i had the chance Link to comment Share on other sites More sharing options...
DonLever Posted March 30, 2012 Share Posted March 30, 2012 So what will I do with the pennies I have AFTER 2015. Will the banks still take them? Are they still legal tender? Link to comment Share on other sites More sharing options...
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