Empty out your wallets, pockets and piggy banks and get ready to make room for bigger and shinier coins. If one Member of Parliament gets his way, Canada may do away with the noble penny.
On April 2 Pat Martin, an MP from Winnipeg, introduced Bill C-531.
The intention of the private member’s bill is to end the production of pennies and promote a system that would see all transactions rounded up to the nearest multiple of five.
The overwhelming evidence of the costs associated with production of the penny sparked Martin to take action.
According to Martin, there is a large amount of support from both big and small retailers as well as the public to get rid of the penny.
“The penny is of no commercial value, it does not circulate, and costs more to produce than it’s worth. It’s time to get rid of it, Martin asserts.
A study by Desjardins Economic Studies explained that to keep the penny in circulation, it would cost approximately $130 million per year. This works out to over $4.00 per person.
According to the Royal Canadian Mint, (RCM) it costs 0.8 cents to produce and one penny. Martin said a Library of Parliament research suggests the real cost is as much as four cents per penny.
Martin also said that there are about 20 billion pennies in circulation in Canada (about 600 under the bed of each Canadian) yet the Mint still produced more last year.
Chantel Filipe who works for the National Bank of Canada in Toronto has had her share of dealing with pennies.
“I’ve had customers bringing me close to $100 in pennies. They were in individual rolls and all but that’s still a lot of pennies. Also, what can you even buy for a penny now-a-days?” Filipe said.
Filipe believes the elimination would take some getting used to but she also agrees that it would be less of a hassle for many who handle cash, such as herself
“The number one advantage I see with getting rid of (them) is all the money that would be saved from not producing pennies. I’ve read and heard it costs more to make a penny than it’s actually worth,” Filipe explained.
Sandra Gomes, a cashier from Shoppers Drug Mart has also had more than enough of dealing with pennies.
“I had a customer paying me a bit over a dollar, all in pennies. I had to count them all. I had a big line-up so counting all those pennies makes my job so inconvenient. Plus, no one even picks them up if they see one on the street. I guess this means people just don’t need them,” Gomes said.
Besides the advantages of getting rid of pennies, there may be some small disadvantages. Major George Patterson, a public relations representative for the Salvation Army in Ontario (Central Division) explained that some charities depend on change.
“We don’t exactly know what impact that (getting rid of the penny) would have upon us, but we certainly have concerns because during Christmas, people reach into their pockets and give us what they have.
“Sometimes people give us bills but not always, pocket change is very important to us,” Patterson explained.
If Martin’s bill does pass, the penny would no longer be considered currency as of January 1 of the following year.
Martin’s bill is modeled after New Zealand and Australia, which have removed the smallest coin from their currency. Spain, France and the Netherlands have all followed suit.
How rounding would work:
- 1 and 2 cents round down to the nearest 10
- 3 and 4 cents round up to the nearest 5
- 6 and 7 round down to the nearest 5
- 8 and 9 cents round up to the nearest 10