Canadian Penny Killed In Canada Budget 2012

Posted: 03/29/2012 4:50 pm Updated: 03/29/2012 7:29 pm

Canada Penny Budget 2012
Canada's penny will be phased out in the budget.

OTTAWA -- There may still be pennies from heaven, but they won't be coming from the mint much longer.

The humble one-cent piece is set to disappear from Canadian pockets, a victim of inflation.

Thursday's federal budget said the Royal Canadian Mint will strike the last of the little coins this fall.

The budget says the cost of minting a penny has risen to 1.6 cents or $11 million a year. Its purchasing power has fallen to a 20th of its original value.

"Some Canadians consider the penny more of a nuisance than a useful coin," the budget documents said.

Quick Poll

What do you think of the government phasing out the penny?

VOTE

And so the coin will go the way of the old 25-cent shinplaster.

"The penny is a currency without any currency in Canada,'' Finance Minister Jim Flaherty said at a news conference.

GALLERY: FEDERAL BUDGET HIGHLIGHTS

It's nothing but a nuisance for business, he added.

Pennies will still be legal tender, but as they slowly vanish from circulation, prices will have to be rounded up or down.

If the customer has the pennies, they can use them. Payments with debit or credit cards or cheques can also be to the penny. But if the customer is paying cash and doesn't have the pennies, the total will go up or down to the nearest nickel. For example, $1.02 will become $1 and $1.03 will be $1.05.

The budget said experience in other countries that have dropped low-denomination coins suggests that rounding will be fair and there will be no impact on inflation.

As for those jars, boxes and bags of pennies sitting in countless drawers across the country, the government suggests people donate them to charities.

The penny has been under fire for years. New Democrat MP Pat Martin has introduced private member's bills over the years to kill it.

The disappearing penny will likely have little economic impact, but it may require some cultural adjustments.

Penny candy? A relic of the past. The penny arcade? Already gone.

And some old adages will likely fade away, too.

What are people going to pinch?

Will thoughts now cost a nickel?

See a penny? Leave it.

Penny-wise? Just foolish.

Take care of the nickels and the dollars will take care of themselves?

A penny saved is ... not much.

GALLERY: FEDERAL BUDGET HIGHLIGHTS


FOLLOW MONEY
Filed by Brodie Fenlon  |