ONTD Political

Canadian Penny Killed in Canada

2:37 pm - 03/29/2012

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:

sentinelsoul 29th-Mar-2012 11:07 pm (UTC)
Annoying as they may be, pennies are useful little coins. I can't see stopping production entirely, just greatly reducing it. Maybe only make them once every three years or something.
forwhataim 29th-Mar-2012 11:15 pm (UTC)
Useful for what?
sentinelsoul 29th-Mar-2012 11:29 pm (UTC)
Making change is mostly what I'm thinking of, since even if you round everything off, taxes will likely render the need for a penny.

For example, an item is $1.95. I live in Pennsylvania, where the sales tax is 6%. I'll pay $2.12 for that, and I'll need two pennies for exact change, or the clerk will need pennies to give me back change.

forwhataim 29th-Mar-2012 11:33 pm (UTC)
I'm in a 6% state too. Can't they just round stuff? I read in some article calling for the end of the US penny that military bases have already done away with it and they round everything.

My state was 4% when I was younger and I remember the ends of prices changed in some retailers so that they'd come out round under the increased sales tax rate.
sentinelsoul 30th-Mar-2012 12:17 am (UTC)
They probably could, but it would be a battle in some places to get it in place. I just can't see eliminating the penny entirely being feasible, at least for the time being. Reducing its production-- which may actually raise its worth(?)-- would seem a great deal easier and more likely to be accepted by the public.
uluviel 29th-Mar-2012 11:36 pm (UTC)
I'm pretty sure you round the cost after taxes have been applied.
sentinelsoul 30th-Mar-2012 12:20 am (UTC)
True, although I think there would be an argument against it since it would have the appearance of people losing money instead even though it would likely even out by rounding down half the time. I can see it being a worthy goal, but jumping right into seems like it would have problems. Baby steps, like reducing the production of the penny, seems more realistic to me.
uluviel 30th-Mar-2012 01:39 am (UTC)
Actually people could gain money in the end because when you pay by credit card or debit you still pay the exact amount. So if you pay cash when you round down and credit when you would round up, you gain money (though still a very small amount).
flyingwild 30th-Mar-2012 01:15 am (UTC)
Throwing at people?

Hell if I know, they're an annoyance more than they're useful, in my opinion.
piratesswoop 30th-Mar-2012 05:15 am (UTC)
Giving to kindergarteners to make them feel rich! Also really helpful for counting games, throwing coins in fountains, penny loafers, etc.
zombieroadtrip 30th-Mar-2012 05:48 am (UTC)
This

I still have so many gold pennies because as a kid I thought this shit was amazing
forwhataim 30th-Mar-2012 01:33 pm (UTC)
That's cool. We don't need to make new ones to do that though.
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