05/04/2012 10:24 EDT | Updated 07/04/2012 05:12 EDT

Canada's last penny minted

The penny's days are numbered in Canada, as the Royal Canadian Mint has made its final one-cent coin.

Federal Finance Minister Jim Flaherty and other government officials took part in a ceremonial coin strike Friday at the mint's coin production facility in Winnipeg, to mark the end of production of the penny.

"The humble one-cent circulation coin was a workhorse of Canadian commerce," Flaherty said, recalling the penny's introduction over 100 years ago. "Unfortunately…over time inflation eroded the purchasing power of the penny and multiplied its manufacturing cost.

"The time has come to make the sensible decision to end production of the coin which is underused by Canadians, no longer vital to commerce and ultimately a burden on Canada's balance sheet."

Following a short countdown, Flaherty pressed a button on a machine that stamped the last penny, which tumbled out of the machine into an empty bowl.

That last penny is going to a museum, officials told the CBC's Chris Glover.

The last million pennies to be produced will be made available to the public as a special collector product, said Canadian Mint president and CEO Ian Bennett.

Flaherty and Winnipeg Conservative MP Shelly Glover, the parliamentary secretary to the minister of finance, encouraged Canadians to donate their old pennies to charities like Habitat for Humanity.

In March, Flaherty announced in the federal budget that the penny would be eliminated from Canada's coinage system, citing low purchasing power and rising production costs.

In part because of rising prices for the metals it's made of, it actually costs 1.6 cents to produce every penny.

Ottawa estimates that it loses $11 million a year producing and distributing the penny, and that doesn't include the costs and frustrations for businesses and consumers that use them in transactions.

The government will phase the penny out starting this fall, when the mint will stop distributing the coin to financial institutions.

Winnipeg Centre NDP MP Pat Martin, who had lobbied for years to get the penny scrapped, said he is happy to see the coin finally fade away.

"People don't even bend over to pick them up off the ground anymore. If you throw one in a panhandler's cup, you get the stink-eye from them," Martin told CBC News.

"So, I mean, what good are they, right?"

Business to round out prices

Over time, the penny will effectively become extinct, although the government has noted that one-cent coins will always be accepted in cash transactions for as long as people are holding on to them.

Businesses will be expected to apply rounding to their cash transactions, according to the government.

Martin said rounding up or down prices is a method that works in other countries that have stopped using their low-value coins.

"If it's 96, 97, you round down. If it's 98, 99, you round up. It rounds down as often as it rounds up and you won't even notice," he said.

"All you'll notice is your pockets will be lighter and you won't have a big bucket of pennies under your bed that you have to worry about all the time."

Credit, debit and cheque transactions will be unaffected, so one cent will still be the base unit of Canadian currency.

"There's 30 billion pennies in circulation, you know, already — that's billion with a 'B' — and they produce another billion more every year," Martin said.

"I mean, finally somebody came to their senses."