Monday, February 4, 2013

Say goodbye to the Penny Canada

Have I been living under a rock? Possibly. I was shocked to see a friend's facebook status indicate that Pennies are coming to an end in Canada. Needless to say, I had to know more.

I have been aware of debate in the US over whether to discontinue the production of the penny. What that says about Canadian media, that the average person is more aware of American news than our own is a topic for another day. But I have been blissfully carrying on with my life, never wondering what would become of the Canadian Penny, when if fact they stopped producing them months ago!

The Royal Canadian Mint rolled out it's last batch of pennies last May, and today, February 4th, they shipped the last of them out into the market.

Google gave a shout out to the end of the Canadian Penny today.

So what will happen to all those pennies? The are apparently 35 billion pennies still in circulation. That's about 82million kg of penny (typically made of steel, and coated in nickle and copper). Although the penny will remain legal tender forever, its up to individual retailers whether they will choose to accept them. You can roll yours up and bring them into the bank, or as a tweet from Prime Minister Stephan Harper suggested, donate them to a Canadian Charity.

Speaking of giving pennies to Charity, my high school, back in Sault Ste. Marie, has a long standing holiday tradition aptly named Pennies From Heaven. All through the month of December students collected pennies from family, friends, people driving by the school, raising close to $20,000 a year. The loss of the penny leaves me wondering what will become of this tradition... somehow Nickles from Heaven just doesn't have the same Sinatra-esque ring to it.

As pennies slowly roll in from across the country, the Royal Canadian Mint will face the task of melting every last one of them down. The discontinuation of a coin like this is a task never before faced in Canada, it's estimated that it will take 3-4 years to get the penny fully out of circulation. Although many will remain in the possession of collectors, or lost under couch curtains, or at the bottom of fountains for years to come.

 This little guy costs more to make than it's worth.

Costing 1.6 cents to make each 1 cent coin, its understandable that the penny had to go. So what will Canadian consumers be facing at the till starting today? Retailers are being asked to round all cash transactions to the nearest nickle (in a transparent fashion). Many have committed to always rounding down. Although most big brand retailers should have their systems ready to handle this new system, smaller retailers will likely be rounding mentally for years. The loss of the 1cent increment however will only affect cash transaction (which lets be honest happen less and less frequently these days), debit and credit purchases will be unaffected.

While I am all for the demise of the penny, I am left with a few questions as we enter this brave new penny-less world. What will become of 1cent candies? Are the take-a-penny-leave-a-penny's going to disappear entirely? How will children be taught currency in schools now? What will become of the penny flattening machines at tourist traps? Are kids expected to put nickles down on railway tracks?

Information Sources. The National Post and The Globe and Mail