Copper coin deemed ‘too expensive’ to continue producing at such little value
Ramsey Kincannon
News Editor
Canada, much like its southern neighbor, has been coping with a financial crisis. However, Prime Minister Stephen Harper’s new budget plan does more than just pinch pennies — it eliminates them altogether. The Ottowa government says it costs “1.6 cents to produce each copper-plated, steel-covered Canadian penny,” according to marketwatch.com, while the American counterpart costs over two cents each.
While the penny will remain legal tender in Canada, the Royal Canadian Mint is encouraging Canadians to bring their pennies to a variety of banks in order for them to be melted down and recycled. Jim Flaherty, the Canadian Finance Minister, said recently that the elimination of the currency was inevitable. “It’s a piece of currency that frankly lacks currency,” is the way Flaherty put it, using a line coined by a Canadian senator.
Bloomberg Businessweek estimates that eliminating the penny from Canadian circulation will save the country close to $11 million annually. In addition, businesses will be forced to round either up or down to the closest nickel.
In addition to Canada, Australia, Brazil and Sweden have also eliminated the penny. Businesses have applauded the move, with David Tulk, chief Canada macroeconomic strategist, saying that “It’s a cost to the government that can be easily saved, given that most pennies get stuck down the back of the sofa or under the streetcar,” according to Bloomberg Businessweek. Catherine Swift, the president of the Canadian Federation of Independent Business, said that the move will “increase efficiency … it’s been a long time coming. It’s been a real pain more than anything else. We’ve actually polled our members on this and they’re supportive.”
The movement has not caught on in the United States, where Americans for Common Cents, a coalition of businesses and charities advocating for keeping the copper coin, has released a Coinstar-sponsored poll stating that 66 percent of Americans prefer keeping the money as opposed to the price-rounding alternative that Canada will be implementing. Of the 1,019 person study, 84 percent of women and 74 percent of men say they pick up the penny off of the ground. Another reason the group believes that the penny should be maintained is due to the popularity of Abraham Lincoln, who 28 percent of Americans label as their favorite coined president.
Dennis Pike, the general manager of Canadian Coin and Currency, told the Toronto Star that “there probably won’t be a large part of the Canadian public that will mourn the passing of the penny … they just clutter up peoples’ change jars.”
Perhaps due to the staggering support for the penny in the United States, there is no word on whether the United States will attempt to copy Canada’s recent austerity measure.