Good-bye penny, hello multiples of five

Starting this fall, there will be no more digging through pockets and purses for spare pennies to pay the odd number of cents for your morning coffee. And you won’t be burdened with a smattering of copper coins every time you get change back from a cashier.

The Conservative government pledged to stop production of Canada’s one cent coin in yesterday’s budget, calling it a “burden on the economy.” It costs 1.6 cents to make a single one-cent coin, a blatant money-losing venture. In 2008, Quebec’s Desjardins released a study that said the penny’s existence in 2006 cost the Canadian economy $150 million. Canada currently spends about $11 million per year churning out pennies, even as the value of the coin has dwindled over time to 1/20th of its original purchasing power.

NDP MP Pat Martin, who has introduced at least three private member’s bill to scrap the one-cent piece, told the Winnipeg Free Press, that he was happy with the move. “This feels pretty good,” he said. “Finally, some common sense from government.”

As Maclean’s reported last year, the copper penny was introduced in Canada in 1858. Since the country opened its own coining factory in 1908, Canada has produced more than 31 billion one-cent pieces.

Now that penny production will be shut down, one-cent coins turned in at banks will be melted down. Cash transactions will be rounded up or down to the nearest multiple of five, while the one-cent denomination will remain the base unit of the Canadian currency.

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