Canada to take penny out of circulation
Canada will stop minting the one-cent piece later in 2012.
Sat, Mar 31 2012 at 7:53 PM
Photo: ZUMA Pres
OTTAWA — Canada's government on March 29 announced its intention to withdraw the penny from circulation, saying it costs more to produce than its face value.
"Pennies take up too much space on our dressers at home. They take up far too much time for small businesses trying to grow and create jobs. It costs taxpayers a penny-and-a-half every time we make one," said Finance Minister Jim Flaherty.
"We will, therefore, stop making them."
The Royal Canadian Mint will cease distribution of the one-cent coins in late 2012.
The penny will retain its value indefinitely and can continue to be used in payments, but as they are to be gradually removed from circulation, price rounding to the nearest five-cent increment on cash transactions will be required.
Over the past five years, the Mint's plant in Winnipeg, Manitoba, produced 7,000 tonnes of pennies annually and distributed them nationwide, at a cost of Can$11 million per year.
A Senate committee in 2010 urged the government to remove the copper coins first introduced in 1908 from circulation as they are no longer accepted in vending machines and cannot legally be used more than 25 at a time to pay for purchases. Many consumers hoard them, give them away or discard them.
"The penny has simply outlived its purpose," said Senator Irving Gerstein, who had called for a study of the issue. "It is a piece of currency, quite frankly, that lacks currency."
Finland, Sweden, Norway, Denmark, Israel, the Netherlands, Australia, New Zealand, France, Spain, South Africa, Switzerland and Brazil have eliminated single-unit coins from their decimal-based currency systems.
Britain eliminated its half-pence coin, Australia and New Zealand removed both their one- and two-cent coins from circulation, and New Zealand did the same with its five-cent coin.
Copyright 2012 AFP American Edition