Soon penny pinchers in Canada will have to start pinching nickels. Canada’s government has decided to follow the lead of countries like Switzerland, Brazil and Australia among others, and discontinue making pennies. Later in 2012, the Royal Canadian Mint will stop distributing pennies to financial institutions for good.
Most people disregard pennies, waving them off when cashiers try to hand them over or tossing them into cups on their desks at work or saving them in jars in their homes. The penny has a negative value, when you consider that it costs approximately 1.6 cents to create a 1 cent coin. It’s even worse in the United States, where there are no immediate plans to stop making pennies. As of the end of fiscal year 2011, it cost the US 2.41 cents to create a 1 cent coin. By eliminating the penny, the Canadian government will save around $11 million Canadian dollars, which equals the same amount in US dollars. Canadian pennies, like their US counterparts, were originally made of copper. Then, in 1997, the Royal Canadian Mint decided to cut costs by giving the coins a zinc core and a copper coating. In 2000, the zinc core was replaced with steel.
As the penny slowly follows the Dodo into oblivion, people will have to round prices up or down to the nearest nickel or whole dollar. So, for example, if an item currently costs $1.99, it will be rounded up to $2. For credit card transactions, people will still have to pay the exact amount listed.
Many Canadians will not be waxing nostalgic once the penny makes its final exit. Pennies can’t be used in vending machines, and penny candy is a thing of the past. Before long, the only place you’ll be able to find pennies is hanging out at the bottom of wishing wells and on the floors of fountains. Rumor has it the nickel could be next.
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