- 2015 Federal Election
Penny no longer makes sense
Some wax nostalgic, some say it makes sense, and others say good riddance, but most stores in Maple Ridge have some reaction to the demise of the penny.
The last Canadian penny has been minted, and on Monday the penny drops, as retailers can start rounding cash purchases off to the nearest five cents.
“It frees up part of my till,” noted Ken Carlson of Ken’s Bookcase on 119th Avenue in downtown Maple Ridge. “The toonie came along, and that made it six coins for five change slots.”
He couldn’t wait for the Feb. 4 deadline to jettison his coppers, and started rounding off on Jan. 1. Most of us were done with pennies a long time ago – a 2007 survey showed that only 37 per cent of Canadians used the coins.
Carlson said eliminating the penny is an issue that has been in and out of the news for most of his 17 years as a business owner, and “finally, they’re going through with it.”
He points out that it costs 1.6 cents to produce the one cent coin, which “seems kind of ludicrous.”
The Royal Canadian Mint will save a pretty penny by not producing the copper-plated steel coins – $11 million per year.
Carlson has a friend, Penny, who he told the penny is going out of circulation on Monday. She didn’t laugh.
Many local retailers were unaware that the penny deadline had crept so close. Most plan to keep accepting pennies if their customers have them.
It will fall to financial institutions to take them out of circulation.
Prices will still be calculated to the cent for all purchases using plastic – one cent will remain the smallest unit for pricing goods and services.
However, when customers pay with cash, $1.01 or $1.02 would be rounded down to $1, while $1.03 or $1.04 will round up to $1.05. Similarly, $1.06 and $1.07 will round down to $1.05, while $1.08 and $1.09 will round up to $1.10.
Some businesses find pennies a nuisance, and can’t wait to substitute nickels.
That’s the opinion of the Royal Canadian Mint, which cites the handling costs pennies impose on financial institutions and businesses as one of the reasons to get rid of them, along with excessive cost of production relative to the coin’s face value.
But at Just Ducky, The Real Cool Kids Store, owner Sabrina Hartman says the loss of the penny is “kind of sad.”
“I’m sentimental – the penny will be part of our history,” she said.
She points out that people still say “save your pennies,” a sentiment expressing that for most of us, even the smallest things can have value.
“I like the thought of little things still mattering.”
“This is a sign of the times,” she sighs.
Ironically, it is saving pennies that has contributed to their demise. Canadians hoard pennies rather than spending them, which takes them out of circulation and demands that more be produced. The average Canadian keeps some 600 pennies in jars, vehicle ashtrays and fountains.
The federal government is expecting to have some six billion turned in over the next six years, as they are completely phased out. Financial institutions will be reimbursed for these pennies, and it is expected they will be melted down, and the metal recycled.
Shauna Boss, service supervisor at Envision Financial Maple Ridge, says the credit union has indeed seen more rolls of pennies coming in, but “nothing crazy yet.”
She said businesses are being made aware that no more pennies will be issued after Monday, but they will be accepted.
Numerous other countries have phased out their coin of lowest denomination.
Ineke Boekhorst of the Downtown Maple Ridge Business Improvement Association frequently visits Holland, and said after its one cent coin was phased out, pennies became scarce after only about a year.
She pointed out that Canada could have a much different experience, however, because U.S. coinage finds its way into Canadian money markets, and the Americans are not ready to give up on their pennies.
But ours aren’t pennies from heaven in the view of federal finance minister Jim Flaherty, who said: “The penny is a currency without any currency,” in announcing that they are going out of production.
The last Canadian penny was minted on May 4, 2012 in Winnipeg.