Perhaps the most interesting item in Canada’s proposed federal budget which was handed down yesterday in the House of Commons by Finance Minister Jim Flaherty is that the Royal Canadian Mint will soon stop manufacturing pennies and will be phased out of circulation.
Over the years various MPs have introduced private members’ bills to scrap the penny but all such efforts were for naught. In recent years, Pat Martin, an NDP MP from Winnipeg, has introduced several of these bills and was delighted with at least this aspect of the Conservative government’s budget.
It cost 1.6 cents to manufacture a penny. While the savings would be relatively nominal for the government the savings would be far more substantial for financial institutions who have to hold pennies and businesses which deal in cash transactions. While it has been argued that it could result in increased inflation that hasn’t been the case when the penny was abolished in the UK, Australia, New Zealand, Norway and Switzerland.
I collect pennies, nickels and dimes in a large cannister of Pringle chips and every so often and I use the Coin Star machine at the Stop & Shop to get cash. (In case you’re wondering, quarters are set aside for laundry). Invariably, there will be a couple of Canadian pennies in the mix. They don’t look all that different from American pennies except that you’ll find Queen Elizabeth II (at various ages depending on what year the coin was issued) instead of Lincoln on the head. Every once in a great while I’ll come across a penny with King George VI (the one now most famous for The King’s Speech) on it.
There have also been efforts to eliminate the penny here. Given that our closest and largest trading partner is doing so it will be interesting to see if this inspires a penny abolitionist movement.