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Canada The Almighty Buck News

Canada To Stop Making Pennies 473

Posted by Soulskill
from the doesn't-make-any-cents dept.
New submitter butilikethecookie writes with news that the 2012 federal budget for Canada calls for the Royal Canadian Mint to stop producing pennies. "The budget calls the lowly penny a 'burden to the economy.' 'It costs the government 1.6 cents to produce each new penny,' the budget says, adding the government will save about $11 million a year with its elimination (PDF). Some Canadians, it says, consider the penny more of a nuisance than a useful coin. ... Rounding prices will become the norm as the penny is gradually removed from circulation, the budget says. If consumers find themselves without pennies, cash transactions should be rounded to the nearest five-cent increment 'in a fair and transparent manner,' it says. Noncash payments such as checks and credit cards will continue to be settled by the cent, however."
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Canada To Stop Making Pennies

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  • by crazyjj (2598719) * on Friday March 30, 2012 @02:21PM (#39525547)

    Pennies are so annoying here in the U.S. now that I refuse them when they're offered as change (or toss them into the penny jar or charity jar on the counter when they have one).

    Sometimes I forget though, and I usually just throw them in the trash. I just hope my Grandma never finds out. She would have a heart attack on that one. I could never get it through to her that they would cost me more in time to deal with than the pennies themselves are even worth.

    • by mmell (832646) <mmell@hotmail.com> on Friday March 30, 2012 @02:24PM (#39525583)
      Big mistake.

      Value of one hundred pennies - $1.00

      Value of one sock - $1.98

      The look on the guy's face when you hit him in the head with a sock full of pennies - priceless

      • He should've had a reverse peephole...

      • by ClintJCL (264898)
        It's better when they are half-dollars.
      • by AchilleTalon (540925) on Friday March 30, 2012 @03:02PM (#39526225) Homepage
        Hahaha, it remembers me this time I was in Kingston, NY and paid the guy using among other change pieces a Canadian penny, because in Canada we are always using indistinctly US and CDN pennies. The guy did notice it and told me with a frown face throwing my CDN penny on the counter: "Could you give me a regular penny?" Like I was a burglar or trying to make me rich using false money.
        • by Kenshin (43036)

          That happened to me in NYC. I bought something and made my payment, which included a Canadian penny, and the woman behind the counter had this expression on her face like I'd just dropped a dead rat on the counter. She asked me for a US penny, with a voice full of contempt.

          Wow. I almost cost you $0.0001. Sorry 'bout that.

    • by Have Brain Will Rent (1031664) on Friday March 30, 2012 @02:27PM (#39525623)
      Are they still copper in the US? If they are I believe they would be worth more as metal than as money. I believe Canadian $0.01 are an alloy cheaper than copper.

      Some enterprising guy figured this out about the Canadian dime in the 1960's - the silver was worth more than $0.10 so he would take armored cars full of dimes to New York and sell them for the silver - iirc he made quite a nice little profit for it too!
      • by Anonymous Coward on Friday March 30, 2012 @02:29PM (#39525643)

        Are they still copper in the US?

        No, they are Zinc. But even the Zinc is worth more than the face value of a penny.

        • by jythie (914043) on Friday March 30, 2012 @02:32PM (#39525689)
          Yep. Though it is also illegal to melt down pennies for their metals anyway.
          • Re: (Score:3, Informative)

            by bogidu (300637)

            Maybe in Canada, not in the US. If you ARE referring to the US, you are thinking about it's illegal to DEFACE currency, meaning revalue it.

        • by Fallingcow (213461) on Friday March 30, 2012 @03:00PM (#39526183) Homepage

          Fun trick:

          1. Place a US penny on some pavement (gotta be a somewhat new one, mind you--don't try this with a steel wheat penny or something, obviously)

          2. Heat it with a butane lighter--the kind with the little blue flame that shoots straight out, 'cuz you gotta be able to point it down.
          2a. Maybe wear a glove on the lighter-holding hand; optional, and I've never seen it matter, but I've only seen it done a couple times so...

          3. Watch as the lower-melting-point zinc busts through the still-solid copper in liquid form!

          Hasn't been explosive when I've seen it--it just tears the copper and flows out a bit--but if there's an air bubble or something, who knows; be careful!

          • Better yet is hold one of the copper plated US pennies (all 1983 and newer and some 1982 ones) with a long pair of pliers, then take a propane brazing torch to it. Depending on how high you have it turned up you either create zinc splatters on the ground or you end up setting the molten zing flowing out of it on fire.
            • by gnick (1211984)

              One of my favorites is to nick one side slightly and toss it in some hydrochloric acid (or muriatic acid off the shelf at the hardware/janitorial supply store). The copper stays intact, but the acid will eat away the zinc. What you have once you rinse it off is a paper-thin penny shell.

        • by sl149q (1537343) on Friday March 30, 2012 @03:11PM (#39526399)

          The Senators from the states that mine zinc are the only thing preventing the US from getting rid of the penny.

      • by BForrester (946915) on Friday March 30, 2012 @02:46PM (#39525927)

        According to the Canadian Mint, the final run of pennies are primarily a steel-based alloy:

        Composition: 94% steel, 1.5% nickel, 4.5% copper plating or copper plated zinc
        Weight (g): 2.35

      • They're mostly Zinc (Score:5, Informative)

        by neile (139369) on Friday March 30, 2012 @02:46PM (#39525941)

        Wikipedia to the rescue. They're 97.5% zinc, 2.5% copper [wikipedia.org], and have been that way since 1983.

      • by taj (32429)

        US pennies made before 1982 are mostly copper with a current melt down (illegal) value of $0.02 each. Post 1982, the content is 95+% zinc.

        http://en.wikipedia.org/wiki/Penny_(United_States_coin) [wikipedia.org]

      • by compro01 (777531)

        I believe Canadian $0.01 are an alloy cheaper than copper.

        Current Canadian pennies are copper-plated steel. Until 1997 they were solid copper (like pre-1982 US pennies) and from 1997-2000 they were copper-plated zinc, like the current US pennies.

        All currently minted coins are plated steel. Nickels, dimes, quarters, and toonies are nickel-plated (Toonies have a brass-plated aluminum bronze center), and loonies are brass-plated.

    • by cpu6502 (1960974)

      That's silly. I toss my pennies in my car's cupholder, and when I come to a McDonald's drivein, I gather together the 6, 12, or 18 pennies to cover the tax appended to the food price. (Actually I do that with all my change; it all gets dumped in my car for future use at a drivein or tollbooth.)

    • The vast majority of americans do not want the penny. Metal lobbies keep them in circulation (polsci 101).

      Consider the man hours wasted among all citizens, across the span of a year, dealing with pennies at the register, at the bank, and in your pockets (aka waste).

      HERE HERE!

    • We dumped the 1c and 2c coin about 20 years ago in Australia. Its hard to imagine having that crap in my pocket anymore. I cant be bothered carrying 5c coins as it is! Its just a waste of weight, You try buying something normal with 5c coins!

      Its hard even paying with 10c coins. 20c is about the limit.

  • by Wattos (2268108) on Friday March 30, 2012 @02:26PM (#39525597)

    Here in Switzerland this is already implemented. The smallest unit is 5 Rappen (5 cents)

    • by RodBee (2607323)
      It's also implemented here in Brazil, with the same smallest units, 5 centavos (also 5 cents). But here it doesn't round the prices UNLESS is for the seller's benefit. If I may offer an advice, keep your pennies, Canada, lest they use their non-existence to rip you off.
    • by Urban Garlic (447282) on Friday March 30, 2012 @02:38PM (#39525789)

      > Here in Switzerland this is already implemented.

      I'm not surprised -- most countries already don't produce Canadian pennies.

    • by WegianWarrior (649800) on Friday March 30, 2012 @02:44PM (#39525893) Journal

      Here in Norway we been doing this for years:
      - The 1 øre and 2 øre coins disappeared in '74
      - The 5 øre and 25 øre coins were withdrawn in '84
      - The 10 øre coin ended being legal tender in '92
      - The 50 øre coin will be withdrawn may 1st this year.
      So in a little over a month there will be no coins circulating that is worth less than 1 Norwegian krone... but you know what? The wast majority of Norwegians pay by card anyhow, and the prices has not changed with the smaller coins going away. If you pay by card, you pay the exact amount. If you pay cash, it is rounded up or down to the nearest coin-value.

      For those curious; after the retirement of the 50 øre coin, a purchase of 9.49 kroner will be rounded down to 9.00 while a purchase of 9.50 kroner will be rounded up to 10.00 - unless you pay by card, in which case you pay the exact sum owed.

      • So in a little over a month there will be no coins circulating that is worth less than 1 Norwegian krone... but you know what? The wast majority of Norwegians pay by card anyhow, and the prices has not changed with the smaller coins going away. If you pay by card, you pay the exact amount. If you pay cash, it is rounded up or down to the nearest coin-value.

        That's the problem, and my biggest problem with this boneheaded move...

        1. Not everybody has access to a card.
        2. Unless you keep a certain minimum balance in the bank, or pay a monthly fee, you get hit with a service charge every time you use your card in Canada
        3. The merchant gets hit with a service charge every time anyway.
        4. (and my main personal concern with it) it's harder to budget when you're paying with plastic, because the money is not tangible.

        I have quite happily been using folding money for small

        • by turing_m (1030530)

          No one is forcing you to get a card. All they would do is get rid of denominations that inflation has caused to cost more to produce than they are worth. The price of a coffee is already too high and it is caused by forcing staff to count out small change when they could be doing something productive, and you are paying for it. This move will actually REDUCE the real price of a cup of coffee.

          If you are worried about "rounding to the nearest "0.05", then logically you should be worried about rounding to the

          • by shiftless (410350) on Friday March 30, 2012 @05:21PM (#39528587) Homepage

            All they would do is get rid of denominations that inflation has caused to cost more to produce than they are worth.

            In other words, curing the symptoms, not the actual problem. (Which is inflation.) And in the process, introducing all kinds of second order effects which will inconvenience many.

            What else do we expect from the government?

        • [...]there's no way "rounding to the nearest $0.05" will work out in my favour.

          Why qouldn't there? In Norway it works fine, same in Denmark (almost same system). Merchants are required by law to round the way GP describes.

  • by Anonymous Coward on Friday March 30, 2012 @02:26PM (#39525605)

    is going to be rounded up to a nickel.

  • by CanHasDIY (1672858) on Friday March 30, 2012 @02:26PM (#39525609) Homepage Journal
    Phase II of our descent into a cashless society: the elimination of physical currency, starting with the lowest denominations and working up from there.

    Now, if you'll excuse me, I'm off to my secret bunker, as I believe I hear the Hyperbole Police coming up the stairs. *dons tinfoil hat* Excelsior!!!
    • Phase II started over 150 years ago, then, when the half-cent was kicked to the curb.

      • Apparently [youtube.com] the buying power of the half-cent coin when it was discontinued was greater than the current buying power of the dime. Perhaps it's time to ditch everything lower than a quarter.
  • That's OK (Score:5, Funny)

    by aclarke (307017) <spam.clarke@ca> on Friday March 30, 2012 @02:26PM (#39525613) Homepage
    That's OK. We'll just continue to use American pennies. Thanks, guys!
  • The new federal budget included a lot of nasties. As much as I'm glad to see the penny go away, I can't help but think it's a ploy by the conservatives to deflect attention away from all the nasties they included in the budget.

  • That seems like a lot of inconvenience to go through for such a tiny return.

    • by residieu (577863)
      Carrying around a penny seems like a lot of inconvenience for 1 cent.
    • by rgbrenner (317308)

      especially since each coin stays in circulation for up to 30 years [latimes.com] (last paragraph of the article).

      • Oh please. When was the last 1980s penny you've seen? That's referring to dollar coins specifically.

        (As if to mock me, the two coins in my wallet are a 1983 quarter and a 1985 dime. No pennies though!)

    • Well the inconvenience is decidedly temporary, whereas the savings are eternal.

  • First the penny. Then the nickel. Then the dime. Then the quarter. Then the loonie. Then the twonie. Everything will eventually be in $5 increments.
    • I think it's time our governments admitted that inflation over the past 20 years has made the penny worthless. We've long since abandoned the half penny, and good riddance. In 100 years it may be time to have $5 be the smallest unit. 3rd world countries deal with this on a regular basis, I think its just 1st world pride that's keeping us from following their example when it's obviously far past time.

      • Re: (Score:3, Insightful)

        by mark-t (151149)
        If it's worthless, why are electronic transactions going to continue to be done to the penny?
        • The point is, the penny wasn't worth the expense of minting it, and the hassle of carrying the extra coins around. Nobody said the penny was utterly worthless though. The cash transactions being rounded will surely wind up rounded UP to the next closest 5 cent mark, not DOWN, in almost all cases -- because merchants don't want to lose that 1-4 cents per transaction that adds up over a month's time.

          • by MightyYar (622222)

            It will just get rounded up or down. If the total is 1.12, then it should go to 1.10. If the total is 1.13, then it should go to 1.15. It's even more straightforward than rounding to the nearest dime, since you don't have to deal with evens and odds.

    • by cpu6502 (1960974)

      Blame the Fed and other central banks for constantly increasing the money supply. The lowly penny has lost 97% of its value since 1920 (hence why it's now worth less than the cost of making it). Your grandparents' SAVINGS have lost 97% of their value since 1920.

      And continue to lose value by about 3% per year. It's a hidden tax on your accumulated cash wealth. Time to End the fed and/or affix the dollar value to a fixed standard (like precious metal or land) that the Fed cannot alter. Cannot devalue.

    • Shrug. We've already ditched $1 and $2 bills in favour of coins, and ditched 25 cent [cdnpapermoney.com] bills entirely. We've survived.

      ...laura

    • by geekmux (1040042)

      First the penny. Then the nickel. Then the dime. Then the quarter. Then the loonie. Then the twonie. Everything will eventually be in $5 increments.

      Calm down. It's taken 100 years for anyone to even propose the elimination of the most pointless of those coins. We won't have to legislate the removal of the others. At this rate of legislation, we'll run out of metal to make them first.

  • DST (Score:5, Insightful)

    by jythie (914043) on Friday March 30, 2012 @02:31PM (#39525663)
    Now all they need to do is get rid of daylight saving time and they will REALLY make the US look silly... come on fed, the Canadians are making us look like idiots here.... THEY can get rid of pennies....
    • Re:DST (Score:5, Funny)

      by Anonymous Coward on Friday March 30, 2012 @02:35PM (#39525731)

      Now all they need to do is get rid of daylight saving time and they will REALLY make the US look silly

      If you believe daylight savings time is the only thing keeping the US from looking silly, you're sadly mistaken.

      • Re:DST (Score:5, Informative)

        by VGPowerlord (621254) on Friday March 30, 2012 @02:40PM (#39525813) Homepage

        I think he was implying that daylight saving time was one of the reasons Canada looks silly (just like the US) and eliminating daylight saving time would make them look less silly.

        No, all I need to make the US look silly are bunches of 3-letter acronyms: DHS and TSA to name two.

        • by Maow (620678)

          I think he was implying that daylight saving time was one of the reasons Canada looks silly (just like the US) and eliminating daylight saving time would make them look less silly.

          No, all I need to make the US look silly are bunches of 3-letter acronyms: DHS and TSA to name two.

          As a non-American, you forgot the biggest fools having a 3 letter acronym: GOP.

    • by dwye (1127395)

      > come on fed, the Canadians

      That is the Department of the Mint's problem, not the Fed. DST is someone else's problem entirely, at least partially each state's (ask Arizona or Hawaii, or once upon a time, Indiana about that).

    • Re:DST (Score:4, Insightful)

      by asylumx (881307) on Friday March 30, 2012 @03:58PM (#39527281)

      come on fed, the Canadians are making us look like idiots here....

      I believe the folks in Washington DC are already working very hard at this.

  • This should have been done 10 years ago. I don't hoard my change, I always keep it in my wallet and spend it as I go, often clearing it out completely every 2 months or so. This is probably the only thing Harper's done right since he got into office.

  • by spook brat (300775) on Friday March 30, 2012 @02:31PM (#39525667)

    When I was deployed to Iraq in '05 the smallest unit of change the PX would give was $0.25, and we all got by with that just fine. When the smallest coin a bubble gum machine will accept is a quarter there's no need for even my children to want any denomination smaller than that. The cost of manufacturing pennies, nickels, and dimes isn't worth the benefit. Add the cost banks and vendors incur in transporting these too-heavy-for-their-worth slabs of metal to the cost of their original manufacture and it's clearly a drain on the economy.

  • Noncash payments such as checks and credit cards will continue to be settled by the cent, however.

    Us Canuckistanians tend to use debit for anything more than a few bucks. Timmies already makes sure their prices come out to a nice even number.

  • Pennies cost more to make than their worth, that can't be good for an economy or cash strapped government.
    I wonder how Canadian retailers will price things now though. Instead of pricing something at $4.99, (to psychologically make you think it's $4 not $5) will they drop the price to $4.95 and lose 4 cents on every purchase, or just mark it up to an even $5.00? And yeah, even though that little trick doesn't work on most of us, it works on enough people that they keep doing it. Or at least US retailer
  • 1. Remove the penny, save $11m.
    2. All prices now a multiple of 0.02, so divide by two
    3. Reintroduce penny - lose $11m but all prices are now half what they were!

  • Rounding prices will become the norm

    I can hear Billy Mays raging from his grave.

  • by AdrianKemp (1988748) on Friday March 30, 2012 @02:47PM (#39525959)

    The penny should have gone some time ago, it's good that it's finally going away.

    This will make exactly 1 difference, half of the stores will go from $3.98 to $3.95 and half will round to $4.

    I'm fine with either, and since it will be about half and half it'll work out in the wash.

  • can you imagine all the looney tunes shouting about Bilderberg this, world domination that, UN plot this, communist muslims that...

    all countries have nut jobs, but what is it about my country that the nut jobs are so loud?

  • Here in Holland (Score:4, Informative)

    by mpol (719243) on Friday March 30, 2012 @03:16PM (#39526513) Homepage

    Here in Holland we don't use Eurocents anymore. Before the Euro, when we used Dutch Guilders (0,45 Euro) we already stopped using cents. The smallest coin then was 5 cents.
    When we got the Euro in 2001 we shortly used the Eurocent. But soon it was discarded. Every shop now rounds to 5 Eurocent. Only when you use your debitcard you pay in cents.
    At first there were some people complaining about losing cents in the rounding, but now most people can accept it. Of course rounding goes both ways anyway.
    I already think 5 Eurocents is too much hassle to bother with. But I guess that one will last for some years to come.

  • by jensend (71114) on Friday March 30, 2012 @03:17PM (#39526529)

    Both Canada and the US should have gotten rid of not only the penny but also the nickel by now, rounding transactions to the nearest ten cents. The waste of good metal in making pennies which are worth less isn't even half the story; much more importantly, though the whole purpose of currency is to make transactions easier, pennies and nickels simply complicate transactions and waste everybody's time.

    See also this well-done youtube video [youtube.com].

  • by Slugster (635830) on Friday March 30, 2012 @03:20PM (#39526579)
    The problem here is that the article claimed that they are eliminating the penny for cash transactions and still using it for non-cash transactions. This means that paying cash in a transaction can legally save up to 2.49 cents over the same non-cash transaction.

    Doesn't sound like much, but when you're in a business that handles hundreds of thousands of transactions a day, that kind of difference can add up fast. 500K transactions = ~$12,500 a day, ~$4.5m a year. Some companies will gain that much, and other companies are going to lose it...

    If they want to eliminate the penny, they should do it for all transactions, at the same time.
    • by m85476585 (884822)
      Don't forget the credit card companies charge merchants fees. Usually something on the order of $0.30 + 2%, but maybe less for a very big merchant.

      If pricing is random, as many transactions will round up as round down, meaning the net result is no change. If merchants are careful with their pricing, they might be able to get more transactions to round up, or they can just increase all their prices by $0.025.
  • by Stoutlimb (143245) on Friday March 30, 2012 @03:40PM (#39526921)

    As a Canadian, I would have been happy with eliminating the nickel too. That way, they stick with a nice round decimal system, and drop one zero from all commonly used monetary calculations. 10 dimes makes a dollar, so a dollar and thirty dimes would be written $1.3. Newly printed dimes wouldn't say "10 cents" on them, they would say "1 dime". That way the dime becomes the new penny as the smallest denomination of coin. This would eliminate all confusing rounding rule. It also makes sense because dimes are the physically smallest coin anyways.

    Dime for your thoughts?

  • And let's say that I discover an item (or possibly a group of items) in a store such that after tax, the total price in pennies ends with the number 8.

    And let's say that I intend to buy something from a store such that its price in pennies, after tax, would end with the number 4, 3, or 2.

    If I combine these purchases into one, and then pay in cash, then the resulting price will be rounded to the nearest nickel, which means they would round down.

    If I then later exploit the store return policy to return the first items on the list for a refund, since I paid in cash, I should receive cash back, which again, should be rounded to the nearest nickel... but this time, they would have to round it up, and I would get an extra 2 cents back.

    Lather, rinse, repeat.

  • by fiannaFailMan (702447) on Friday March 30, 2012 @04:51PM (#39528157) Journal

    I'm old enough to remember half pennies and pound notes in the UK. The pound coin was met with bemusement when it came out but I came to like them very quickly. I was passing through Vancouver airport one time and the airline guy who was checking my boarding pass noticed the coins I'd taken out, he was fascinated by the British pound coin because I set a few of them on the counter (while digging something out of my pocket) and a few of them stood up on their edge. He asked me all sorts of questions about these coins, like what it was worth and what it could buy. He was a sweet old fella too, I let him keep one.

  • by bjdevil66 (583941) on Friday March 30, 2012 @05:48PM (#39528973)

    Bit of relevant trivia: There is a US precedent for eliminating a coin for being too small in currency. The US Half Cent [wikipedia.org] was around until just before the Civil War. We ended that program without any major currency problem popping up.

    Just like we tossed the half cent and rounded up or down, it's probably time to do the same with the penny. In a decade or two (or sooner, depending on the coming wave of inflation), the nickel should probably follow suit. I'll miss what you WERE, Mr. Penny, but I won't miss what you are today.

    A question for the remaining defenders of the penny: Do you have a pile of pennies in your car or at home that you haven't touched or forgotten about for more than a month? If so, your own economic sensibilities should see the problem and want to eliminate it.

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