Canada ponders a penniless future

Canada could face a penniless future as Finance Minister Jim Flaherty is openly musing about the end of the one-cent coin. Documents obtained by the Toronto Star reveal officials from his department have been in discussions with the Royal Canadian Mint to consider a penny-free society, and have talked to officials in Australia and New Zealand—both countries have axed the penny—about the logistics of cash purchases. One briefing note from the Mint says Ottawa could withdraw the penny from circulation but still allow them to be accepted for commerce. Or it could end production of the penny and “demonetize” the coin on a specific date, meaning they could no longer be used to pay for purchases. Thirty billion pennies have been produced in Canada since 1908, many have which have ended up in Canadians’ bedroom drawers, piggy banks and kitchen jars. But Deputy Governor of the Bank of Canada Pierre Duguay told a Senate committee in May the coin has lost 95 per cent of its purchasing power. It also costs 1.5 cents to produce and distribute each coin, meaning production is costing taxpayers. The final decision to remove any coin denomination rests with the government, and a spokesperson finance department said the fate of the penny is being reviewed by the Senate finance committee.

Toronto Star