OTTAWA -- There may still be pennies from heaven, but they won't be coming from the mint much longer.
The humble one-cent piece is set to disappear from Canadian pockets, a victim of inflation.
Thursday's federal budget said the Royal Canadian Mint will strike the last of the little coins this fall.
The budget says the cost of minting a penny has risen to 1.6 cents or $11 million a year. Its purchasing power has fallen to a 20th of its original value.
"Some Canadians consider the penny more of a nuisance than a useful coin," the budget documents said.
And so the coin will go the way of the old 25-cent shinplaster.
"The penny is a currency without any currency in Canada,'' Finance Minister Jim Flaherty said at a news conference.
It's nothing but a nuisance for business, he added.
Pennies will still be legal tender, but as they slowly vanish from circulation, prices will have to be rounded up or down.
If the customer has the pennies, they can use them. Payments with debit or credit cards or cheques can also be to the penny. But if the customer is paying cash and doesn't have the pennies, the total will go up or down to the nearest nickel. For example, $1.02 will become $1 and $1.03 will be $1.05.
The budget said experience in other countries that have dropped low-denomination coins suggests that rounding will be fair and there will be no impact on inflation.
As for those jars, boxes and bags of pennies sitting in countless drawers across the country, the government suggests people donate them to charities.
The penny has been under fire for years. New Democrat MP Pat Martin has introduced private member's bills over the years to kill it.
The disappearing penny will likely have little economic impact, but it may require some cultural adjustments.
And some old adages will likely fade away, too. Penny candy? A relic of the past. The penny arcade? Already gone. What are people going to pinch? Will thoughts now cost a nickel? See a penny? Leave it. Penny-wise? Just foolish. Take care of the nickels and the dollars will take care of themselves? A penny saved is...not much.
Source
First post, so if I missed/misused some tags forgive me. D:
But they're also getting rid of the penny (fina-fucking-ly) and the two departments/agencies who are getting the biggest cuts are defense and security. You'd think Mr. Longer Prison Sentences and Down with the Gun Registry would be pouring money into defense.
Ah well. I'm sure as details of this budget start to come out I'll disagree with plenty in it.
ETA: This is about the American penny but it applies (applied?) to the Canadian penny as well. Good riddance!
Edited at 2012-03-29 10:10 pm (UTC)
rip canadian penny, i hardly knew thee
i always have a ton of pennies, but no one will ever take them! they are pretty useless.
I'll be sure to stash some away just 'cause, though :D I think my grandmother still has a Canadian one and two dollar bill somewhere, too.
companies aren't gonna round down, they're not. Nothing is gonna go to 1.99 down to 1.95, they'll just increase it by a penny. Plus u gotta think about all the currency out now that would be devalued (sunk cost, shouldn't be factored anyway). Then it's more expensive to make nickels than pennies, so you'd have to put a lot more nickels into rotation. It might even cause a slippery slope effect of nickels becoming like pennies (doubt it). The benefit just hasn't outweighed the cost yet, but it might soon
Edited at 2012-03-29 11:08 pm (UTC)
I disagree. The point of the 1.99 price is to make you see the 1 and think "oh it's only $1" and thus be more likely to buy it because your brain goes "1 out front = cheaper" even though it's really closer to $2 than $1. This tactic will still get used, because it works, so stuff will definitely end up being 1.95 instead of 2.00. The extra 5c they'd earn for rounding up is not worth much if people don't buy.
The fact that pennies cost more to make than they are worth in the bottom line to me.
its kinda lame, but
i collect pennies, older the better. getting rid of them means no chance in hell to randomly discover a 60 or a 54 in my change from tims.
i was working on a collection of every year of elizabeths reign and .... they are stopping the pennies so i can't ever finish it.
i know. its lame. cry more and such.
Edited at 2012-03-31 08:38 am (UTC)