Some Calgarians unfazed by coin’s demise
The Government of Canada recently announced in the Economic Action Plan 2012 that as of this fall, the penny will be taken out of circulation.
According to the document, each tiny copper coin costs 1.6 cents to manufacture. It costs the federal government an estimated $11 million each year to distribute new pennies across the country.
Due to inflation, the value of the penny has decreased to the point where its cost now outweighs its value.
The action plan states why the penny is being eliminated, and advises Canadians how the transition will occur and what to do with the many coins still in existence.
Key facts contained in the document include:
• Pennies will remain legal tender. Canadians can still use the coins as long as they have them.
• When there are no pennies available, cash purchases are to be rounded to the nearest five-cent increment.
• Non-cash payments (cheque, debit and credit) will remain the same.
• Pennies can be exchanged at a bank, but should be rolled.
• Rounding should only be done after the final sale price (after tax).
Calgarian Colin Jabusch has no problem with the penny’s impending demise. He said he finds it to be more of a nuisance than a useful form of currency.
“No one ever pays with pennies and they always just sit in the bottom of your money bag,” Jabusch said. “It also costs more to make a penny than what it’s really worth. It’s kind of ridiculous.
“The penny is the most useless piece of change around.”
Braxton Tucker, a Mount Royal University student, shared Jabusch’s opinion. He said it’s a good idea to lose the penny since it’s hardly ever used. Tucker said rounding prices up or down to the nearest five cents wouldn’t really affect him.
The Business Side
Rose Samji, owner and manager of Oakridge Foods in southwest Calgary, said she believes going without the penny will have benefits but added it may affect consumers.
“It will definitely affect business because if there is no penny, we either have to go up or down.
“If we go down, then it hurts the profit line. If we go up, consumers protest because now we’re charging them more. Even though it’s a penny, sometimes people get caught up in the principle of the thing,” Samji said.
“It will be good because you’re no longer counting out the pennies, and whatever the government saves, will hopefully come back in tax breaks.”
The document states that businesses will not have to make any changes to their equipment since rounding only occurs if there is cash payment, and only after tax.
Once returned to any bank, the coins will be sent to the Royal Canadian Mint, where they will be melted down and recycled.
For more information visit http://www.budget.gc.ca.