From CNN.com Canada is ditching production of the penny, saying it costs more to make the coin than it's worth. As of this fall, the Royal Canadian Mint will cease distributing Canadian pennies, though consumers will still be able to use them for transactions. The change was included in the country's 2012 budget released Thursday. 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. Some Canadians, it says, consider the penny more of a nuisance than a useful coin. Some retailers say they're worried about the change. "Something that costs $7.99 looks cheaper than something that's $8," Wendy Butenschoen of Toronto's Essence of Life Organics told the CBC. 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. It says fair rounding practices have been respected in other countries that have eliminated low-denomination coins. The removal of one-cent coins in other countries such as New Zealand and Australia, it says, did not result in inflation. The budget urges Canadians to donate their pennies to charities -- or even throw more into the wishing fountain. "I'm going to believe that people want to just donate four cents more, and that a penny will turn into a nickel," said Lisa Resnic, marketing director for Sherway Gardens, where coins thrown into the fountain are donated to charity.
I guess this isn't surprising...they also managed to eliminate the dollar bill. Perhaps someday we will manage to do the same.
It would be great if we could learn from them and follow in the footsteps of their successes, however the examples of the metric system, both $2 and $1 coins that actually circulate along with the elimination of the $1 and $2 bill show that we sadly cannot. *sigh*
Agree with the second part, --get rid of the dollar along with the $2 and $5 bill and replace them with coins. Ending the penny might not be all bad though, especially if you collect them and have a decent set. I can imagine the same thing that happened with the elimination of the large cent in 1857 occurring with the elimination of the Lincoln cent as many new collectors are drawn into the hobby collecting the "vanishing coins of the past"...,,, Of course, we'll need billions of coin collecting alien invaders from another galaxy to really absorb some of those mintages from the past 20 years(!)
Only matter of time before the unthinkable happens and countries start producing coins and paper currency all together.
I'm not so sure of that. I suspect we are closer to a resurgence of cash transactions than we are to the demise of cash. One of these days there is going to be an electronic payment system failure so catastrophic, that the entire idea of using electronic money will be questioned by many. http://www.bloomberg.com/news/2012-...potential-breach-of-account-data-in-u-s-.html
Its sad to see how easily a country can accomplish what is right, and the US pitifully still making the same denominations we have been since 1866. Pathetic actually. I applaud Canada and Canadians though. Good job having common sense and not gutless politicians. Chris
And why would Wendy change that 7.99 price tag? Absolutely no reason to - and unfortunately the CNN article does not explain the concept of rounding cash (!) totals (!) only. In my opinion the Canadian decision to phase the penny out makes a lot of sense. Christian
Money talks and you know what walks. There will be a need for cash transactions well into the forseeable future. Almost every "plastic" transaction involves a fee for the seller and the cost is passed onto the consumer. Many retailers require a minimum purchase amount so they don't go in the hole on a small sale. I doubt you'll ever see a gumball machine that accepts debit/credit cards. As for the cent and the paper dollar, I think the pointed heads inside the beltway will be against the end of production of these for a long time to come. Obama's cronies had the opportunity to cut spending by removing the paper dollar from production but opted to nix the circulating presidential dollar instead. They must have looked at the raw cost of producing each paper vs coin dollar and didn't look at the big picture: Paper dollars last about 6 months in circulation while coins last about 25 years. Therefore each bill printed must go through a process of printing, being deemed fit or unfit for continued circulation, collection and transportation of unfit bills and finally being run through the shredder. Do this operation 50 times while that dollar coin continues to bounce around in commerce.
