Get ready for a new era in Canadian currency.
The Royal Canadian Mint will stop issuing the penny on Monday, Feb. 4, marking the official end of the one-cent coin in Canada. The little copper-coloured coins in your pocket will soon be historical artifacts.
Here are 11 things you should know about the changeover that begins Monday.
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When Does It End?
The Royal Canadian Mint stopped making new pennies in May, 2012, after the government announced in its spring budget it’s discontinuing the coin. On February 4, 2013, the Mint will stop distributing pennies to financial institutions, marking an official end to the era of the penny. But pennies will still be around, and will only fully disappear as stores stop using them over time.
Do I Have To Stop Using Pennies?
No. You can keep using pennies for as long as you want, but stores will no longer have to accept them. As time goes on, it will become harder and harder to use pennies as fewer and fewer stores accept them.
How Will Prices Change?
They won’t. Or at least they shouldn’t. The idea of “one cent” isn’t going away — a store can still advertise something as costing 99 cents, even if you can’t pay that price physically. It’s only at the point of sale that prices will be rounded up, once taxes and everything else have been calculated.
How Will Rounding Work?
Any price that doesn’t end in a five or a zero will have to be rounded up or down. The Mint has released a set of guidelines for this. If a price is a few cents above a five or zero, you round down; otherwise you round up. So if something costs $1.01 or $1.02, the price become $1.00. If something costs $1.03 or $1.04, it becomes $1.05. But these are guidelines, not the law, and some stores may choose to simply round up for everything.
What About Credit And Debit Cards?
For electronic transactions, cheques and money orders, nothing will change. A $1.03 purchase on Interac will still cost you $1.03.
Are We Ready For This?
Maybe. Almost. According to a survey from the Retail Council of Canada, nearly a quarter of Canadian retailers say they’re not prepared for the switch, with another quarter uncertain. So prepare for the possibility of a few glitches here and there at the checkout line, as retailers adjust to the new reality.
Has Anyone Tried This Before?
Sure. Australia got rid of its penny in 1966, when it switched from the Australian pound to the Australian dollar. The land down under has been doing nicely with five-cent pieces ever since. And over the years countries have often eliminated their smallest currency denominations as inflation ate into their value.
Will My Pennies Be Worth More Once The Penny Is Eliminated?
It’s inevitable that pennies will go up in value as they become historical artifacts. But don’t expect them to make you a millionaire anytime soon. There are literally billions and billions of Canadian pennies out there, with a market value of about 1.5 cents each, based on their metal content. It will take many years for pennies to become valuable collectors’ items.
But the pennies in your pocket are actually already worth more than their face value, thanks to the high price of metals in recent years. One of the main reasons for discontinuing the penny is that it costs more to produce than it’s worth. So if nothing else, you can always sell a penny for scrap metal, and make a (tiny) profit.
How Can I Get Rid Of My Pennies?
If you’re not interested in collecting pennies on the chance they’ll go up in value, you can take them to your local bank. They’ll pay you for the pennies’ value in a larger denomination, and send the pennies along to the government, which will in turn reimburse the bank.
How Many Pennies Are They Taking Out Of Circulation?
The Royal Canadian Mint says it’s nearly impossible to tell how many pennies there are in circulation, because of hoarding by consumers. But in recent years more than 800 million pennies were minted per year, typically, though the numbers fluctuated wildly from year to year. In 2011, the Mint issued 1.1 billion pennies, up from 486 million the year before. So it’s fair to say there are billions and billions of them out there.
What Coin Will They Get Rid Of Next?
It will probably be some time before Canada eliminates another coin denomination, but there is already chatter out there about the nickel being more trouble than it’s worth....