Canadian Penny
The government announced in the budget that it is eliminating the penny from Canada's coinage system. In about six months the Royal Canadian Mint will stop distributing Canadian coppers.
What's going to happen to the pennies that are in circulation?
Starting in the fall, businesses will be asked to return pennies to financial institutions. The coins will be melted and the metal content recycled.
In the meantime, Canadians can continue to use pennies to pay for things and the one-cent piece will retain its value indefinitely.
How long will it take?
"There is no end date to this process," Alex Reeves of the Royal Canadian Mint told CBC News.
I want to empty my penny jar. How many pennies can be used for a purchase?
The Currency Act states: "A payment in coins … is a legal tender for no more than … 25 cents if the denomination is one cent."
How will we pay for things in amounts not ending in a zero or a five?
Coins abandoned around the world
Other countries have stopped using their low-value coins. Some examples:
Australia removed its one-cent and two-cent coins from circulation in 1992.
Brazil discontinued the production of one-centavo coins in 2005.
Finland has not issued one-cent or two-cent euro coins since the euro was introduced in 2002.
Israel stopped issuing the one-agora coin in 1991 and the five-agorot coin in 2008.
Netherlands stopped issuing one-cent and two-cent euro coins in 2004.
New Zealand removed its one-cent and two-cent coins from circulation in 1989 and its five-cent coin in 2006.
Norway removed its one-ore and two-ore coins in 1972; by 1991, it had also removed its five-, 10- and 25-ore coins.
Sweden removed its one-ore and two-ore coins in 1971; by 1992, it had also removed its five-, 10- and 25-ore coins. In 2009, it removed the 50-ore coins from circulation.
Switzerland officially withdrew its one-centime coin from circulation in 2006, while the two-centime coin lost its legal tender status in 1978.
Britain removed the legal tender status of the half-penny in 1984.
Source: Department of Finance, Canada
The 2012 federal budget states: "The government expects that businesses will apply rounding for cash transactions in a fair and transparent manner."
The rounding will not be done on single items but on the total bill of sale. If the price ends in a one, two, six, or seven it gets rounded down to 0 or 5; and rounded up if it ends in three, four, eight or nine.
Businesses will not need to adjust their cash registers.
What about the sales tax and the GST/HST?
They won't make a difference. The government wants the rounding done on cash transactions only after the taxes have been added to the sub-total.
What about non-cash sales?
Cheques, credit and debit cards and electronic transactions will continue to be settled to the cent.
The government says it costs 1.6 cents to produce each penny.
What's going to happen to the pennies that are in circulation?
Starting in the fall, businesses will be asked to return pennies to financial institutions. The coins will be melted and the metal content recycled.
In the meantime, Canadians can continue to use pennies to pay for things and the one-cent piece will retain its value indefinitely.
How long will it take?
"There is no end date to this process," Alex Reeves of the Royal Canadian Mint told CBC News.
I want to empty my penny jar. How many pennies can be used for a purchase?
The Currency Act states: "A payment in coins … is a legal tender for no more than … 25 cents if the denomination is one cent."
How will we pay for things in amounts not ending in a zero or a five?
Coins abandoned around the world
Other countries have stopped using their low-value coins. Some examples:
Australia removed its one-cent and two-cent coins from circulation in 1992.
Brazil discontinued the production of one-centavo coins in 2005.
Finland has not issued one-cent or two-cent euro coins since the euro was introduced in 2002.
Israel stopped issuing the one-agora coin in 1991 and the five-agorot coin in 2008.
Netherlands stopped issuing one-cent and two-cent euro coins in 2004.
New Zealand removed its one-cent and two-cent coins from circulation in 1989 and its five-cent coin in 2006.
Norway removed its one-ore and two-ore coins in 1972; by 1991, it had also removed its five-, 10- and 25-ore coins.
Sweden removed its one-ore and two-ore coins in 1971; by 1992, it had also removed its five-, 10- and 25-ore coins. In 2009, it removed the 50-ore coins from circulation.
Switzerland officially withdrew its one-centime coin from circulation in 2006, while the two-centime coin lost its legal tender status in 1978.
Britain removed the legal tender status of the half-penny in 1984.
Source: Department of Finance, Canada
The 2012 federal budget states: "The government expects that businesses will apply rounding for cash transactions in a fair and transparent manner."
The rounding will not be done on single items but on the total bill of sale. If the price ends in a one, two, six, or seven it gets rounded down to 0 or 5; and rounded up if it ends in three, four, eight or nine.
Businesses will not need to adjust their cash registers.
What about the sales tax and the GST/HST?
They won't make a difference. The government wants the rounding done on cash transactions only after the taxes have been added to the sub-total.
What about non-cash sales?
Cheques, credit and debit cards and electronic transactions will continue to be settled to the cent.
The government says it costs 1.6 cents to produce each penny.
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