By Alexei Summers (The Cascade) – Email
Print Edition: April 11, 2012
In a surprising, but not unexpected move on March 29, as part of this year’s Federal budget, the Canadian government sent the order to the Royal Canadian Mint that in the month of April, it is to cease production of the Canadian one-cent coin – the penny.
The penny is perhaps one of the most well-recognized symbols of Canada, bearing the patriotic national symbol – the maple leaf on one side, and the depiction of the British monarch on the other. Historically it has been made primarily from copper; however in recent years, due to the rising cost of the metal, the Royal Mint cut corners and used mostly steel, lightly-coated in copper. The last time Canada saw true copper penny production was in 1996. The years which followed saw a penny consisting of 94 per cent steel.
The penny has for many years been discussed in Ottawa because of how much they cost to make. As of this year, every penny costs 1.6 cents to make. Due to their burdensome nature, and low value, most pennies disappear out of circulation because citizens simply do not use them – they end up in jars, tossed in the trash or in wishing fountains.
The Federal government has pointed out that pennies will always be accepted in transactions, and are still legal tender – however, no new ones will be minted, and it has encouraged Canadian’s to donate their pennies to financial institutions and charities.
It is unknown how business-owners will react to this – if they will continue choosing to use the penny, or if they will deny it as acceptable form of payment. Ottawa has stated that this will be up to the discretion of the business. Historically in Canada, it has often been the opinion of the public that determines the effectiveness of any changes to currency and legal tender. The government has stated that it knows this transition will be awkward at first, but has encouraged businesses to round to the nearest five cents during transactions.
Discontinuing the penny has been met with both criticism and rejoice. On one hand, many Canadians seem to be relieved to not have to carry around a lot of copper-plated steel trinkets in their pockets; on the other hand, there seems to be outcry from across the various provinces regarding the loss of a significant part of Canadian culture.
Distribution of the penny to financial institutions is reported to be discontinued by the fall of 2012. It is estimated that the amount of money which will be saved by the cessation of penny production will be around $11 million a year. In the meantime, the government is doing everything it can to remove the coins from circulation.
