Today the Royal Canadian Mint stopped distributing Canadian pennies, taking another step in the process of phasing out the coin that began almost a year ago when the government announced it would no longer mint new ones:
Businesses are now beginning to round cash transactions to the nearest five-cent increment in a “fair and transparent manner” — but there are 35 billion of them still in circulation. There’s still a long way to go before they disappear from every day life.
Slowly but surely, 82-million kilograms of steel, nickel and copper plating will travel in patrons’ pockets to stores and banks. The pennies themselves will remain legal tender indefinitely, but it’s at the discretion of individual businesses if they’ll accept the coins. From there, businesses can hand them over to banks, who can pass them on to the Canadian Mint.
The coin’s last stop after the Mint will be a foundry, which will melt the pennies down and recycle the metal.
The economic argument for abolishing the penny is straightforward: It costs more to make than it’s worth. In the United States, bills proposing that the penny be phased out have not met with success. At one point on the campaign trail in 2008, Barack Obama came out against the coin: “We have been trying to eliminate the penny for quite some time — it always comes back,” he said. “I need to find out who is lobbying to keep the penny.” John Fund made the case last year on NRO that the penny had outlived its usefulness.
He acknowledges Americans have diehard attachments to pieces of currency other countries have long since done away with, noting the lack of love given to the America’s version of the loonie. . . . “There just doesn’t seem to be a rational response to currency changes in this country like you see in other places.”