Canada To Stop Production of Their One Cent Coin
As part of their 2012 federal budget, Canada announced that they would be halting production of the Canadian penny.
According to the Canadian government, it costs 1.6 Canadian cents to produce one penny. By shutting down the circulation of the penny, Canada is expected to save approximately $11 million per year.
The Royal Canadian Mint will stop distributing pennies to financial institutions later in the year. The penny will still be accepted as a valid form of payment.
Non-cash payments such as credit and debit cards will still continue to be settled to the cent, but cash transactions will be either rounded up or rounded down. For instance, if you purchase a coffee in Canada and the total comes to $1.09 and you elect to pay in cash, then the amount of the transaction will be rounded up to $1.10.
According to the Canadian government, there are currently 30 billion Canadian pennies in circulation, and the Royal Canadian Mint is producing roughly 25 pennies per Canadian per year.
Not only will the Canadian government save money by halting the production of the Canadian penny, but financial institutions will save money as well through lessened storage costs.
Next up? The Canadian nickel. There is a general feeling that the nickel will be phased out over the coming years as well (New Zealand is an example of a country that phased out both their penny and nickel).
Now that Canada has taken steps to phase out their penny, many are wondering when the United States will do the same..
Source: Nationalpost.com - Canada penny drops in federal budget as Jim Flaherty signals end of one cent coin
Filed under: General Knowledge