Created on: February 06, 2013 Last Updated: February 07, 2013
The Royal Canadian Mint has stopped making pennies. One cent coins ceased being distributed to financial institutions on Monday, January 4, 2013. The coins, which feature two maple leaves and the profile of Queen Elizabeth II, will remain legal tender until they eventually disappear from circulation.
Canadian business owners and consumers are unfazed by the
announcement for the consensus is that the penny has been irrelevant for some time. The cost of producing a penny has outdistanced the value.
The government is officially advising businesses to round down to the nearest nickel if the price ends with a 1, 2, 6 or 7. If the price ends with a 3, 4, 8, or 9 it will be rounded up. For prices ending in 0 or 5, the cost will remain the same.
Shelly Glover, parliamentary secretary to the finance minister said this action on the part of the government is all about convenience and common sense. The production of one penny costs 1.6 cents so eliminating the humble coin will net an $11 million savings annually.
In an interview, Canadian Finance Minister, Jim Flaherty was quoted as saying, “The penny is a currency without any currency in Canada, and it costs us 1.5 cents to produce a penny.” Flaherty said a Canadian Senate Committee held hearings on the penny last year and not one individual came forward to say the penny should be retained.
It was pointed out that New Zealand, Australia, the Netherlands, Norway, Finland and Sweden are other countries that have dropped the penny.
Earlier this year the U.S. Treasury Department’s Rosie Rios was queried about the Canadian decision to go penny less. She said the Obama Administration has been researching cheaper materials to use in producing the penny, which is currently made from zinc.
Two separate bills which called for the demise of the penny have been introduced in 2002 and 2006 by Republican Congressman, Jim Kobe, but both failed to advance in the U. S. House of Representatives.
A major opponent of eliminating the penny is the Zinc lobby. Another group advocating for the penny is called Americans for Common Cents. The statement on their website reads, “Eliminating the penny is a losing proposition because it will result in rounding up to the nearest nickel and higher prices for American working families. This increased cost to consumers will be felt in everything from the grocery store to the gas pump. Pennies add up to millions of dollars every year for charities across the country. Simply put, the penny plays an important role in our every day lives and in our nation’s economy.”
Only time will tell if the U. S. will eventually follow Canada’s lead, sending the little Lincoln-bearing coin into oblivion, all in the name of convenience and common sense, and heralding in the “coining” of a new and awkward phrase, “A nickel for your thoughts?”
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