Monday, February 04, 2013

Farewell, penny.

Today's date will go down in numismatic history as the day when the Royal Canadian Mint officially discontinued the penny. Though the production of new pennies actually stopped in May of 2012, today is the first day on which the Mint will no longer distribute uncirculated pennies to banks and businesses. Existing pennies will remain legal tender, but the Canadian government hopes to gradually withdraw them from circulation over the next several years while encouraging businesses to adjust prices and round cash transactions to the nearest five cents to ease the transition to a penny-free economy.

Noting that the cost of producing pennies exceeds their actual cash value, the Royal Canadian Mint asserts that phasing out the penny will save taxpayers $11 million a year. At the same time, analysts suggest that administrative and other costs associated with removing pennies from circulation could total about $7.3 million a year, so the annual savings could actually be as little as $3.7 million - not much for a country with a $276.1 billion federal budget. At least one MP is suggesting that the nickel and the quarter should be eliminated next, with a new coinage scheme being introduced that would retain the existing dime but also add twenty- and fifty-cent pieces. Meanwhile, some people are coming up with creative uses for the now-redundant coins, including turning them into jewelry and encouraging people to donate them to various charitable organizations.

Personally, I'm sad to see the penny go. Practically speaking, I'm not convinced that scrapping the penny is all that worthwhile when one measures the inconvenience involved against the relatively small cost savings. Having collected coins and banknotes in my youth, I must also confess to a certain nostalgia for venerable forms of currency like the Canadian penny, which was first minted in 1858. I take some small consolation in realizing that the penny will have a long afterlife: I'm sure that they'll continue to turn up in desk drawers and under sofas for decades to come, and I'm sure that some Canadians who are still children today will in seventy years be telling their grandchildren that, when they were kids, people used strange copper coins called 'pennies' to make change. I just hope that the U.S. Mint doesn't embark on a similar project, so that I'll return to a penny-fee Union. AMDG.


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