After Feb. 4, Canadians began rounding cash transactions to the nearest 5 cents.
Canada joined the list of countries that no longer mint one-cent coins, which includes Australia, Brazil, Finland, France, Spain, South Africa, Sweden and several others.
New Zealand hasn’t produced a coin valued less than 10 cents since 2006, according to the country’s reserve bank.
It’s time the United States followed their example and got rid of the penny.
The U.S. Mint addressed the idea of discontinuing the American penny by listing the potential consequences, including concerns of inflation caused by retailers rounding
up their prices.
But a 2010 Canadian Senate committee found eliminating its penny would not cause
rampant price increases or systemic inflation.
“In New Zealand, the choice of rounding up or down on cash transactions was left totally to retailers after the country eliminated its one- and two-cent coins and there was no noticeable effect on inflation,” said Pierre Duguay, deputy governor of the Bank of Canada.
Annual reports by the U.S. Mint underscore a strong argument against keeping the American penny, namely its cost.
The U.S. Mint reported distributing a little more 5.8 billion pennies in 2012, accounting for about 64 percent of circulating coins that year.
Each penny costs 2 cents to produce and distribute, leading to a loss of nearly $60 million.
The mint has lost money making pennies for the past seven years, according to its
2012 report.
Several Canadian agencies refer to perhaps the strongest reason to eliminate one-cent coins: inflation has eroded the value and usefulness of a single cent to
almost nothing.
I keep a dish next to my door into which I deposit any coins accumulated during the day.
Right now it’s full of pennies.What happens to the other coins?
I use them for parking meters or for tipping at coffeehouses.
No meter I’ve seen ever accepts pennies.
And it seems almost insulting to pour a handful of them into a tip jar, each “plink” eventually translating into time lost
counting individual cents.
Perhaps charities are the best avenue for pennies. Michael Maidment, federal government relations officer for the Salvation Army, told the 2010 Canadian Senate committee his agency would not suffer in a
penny-less Canada.
“We think Canadians will just donate the next largest coins,” he said.
“Their pocketful of change, instead of consisting of pennies, may consist of dimes and nickels and other coins.”
Evidently the Canadian government deemed its penny ready for retirement. It’s time our government did the same.