Why You Can Trust CNET So long, Canadian penny. I won't miss you
Canada has axed the irksome cent, and should do likewise with other coins and banknotes, says Crave writer Tim Hornyak. Do you want to live in a cashless society?
When I was a kid growing up in Montreal, I spent more than a year filling a big brown bottle with pennies. When they reached the top and I poured them out, I was crushed that they totaled less than 20 bucks.
Ever since, I've had little love for the lowly Canadian cent -- it's 2.35 grams, mostly steel, and has been nothing but dead weight in my pockets. The government now feels the same and has announced that the Royal Canadian Mint will stop distributing pennies this fall.
"Pennies take up too much space on our dressers at home," Finance Minister Jim Flaherty said in announcing the federal budget. "They take up far too much time for small businesses trying to grow and create jobs."
Desjardins Group has estimated that the coin costs businesses $150 million a year in counting and transport costs. Meanwhile, it costs a penny and a half to mint every penny, and cutting it will save $11 million annually, according to the Department of Finance.
At least Canada is only losing on its pennies -- the Mint says other Canadian coins cost "well under face value" to produce.
Not so south of the border. It costs the United States Mint 2.41 cents to produce every cent and 11.18 cents for every nickel. In the year to September 30, 2011, that resulted in a loss of $116.7 million, according to Coin Update, a site devoted to coin news.
That's nothing, but in the recent book "The End of Money," author David Wolman cites research estimating that economies could save 1 percent of GDP by going cashless. That's a lot of loot.
At its plant in Winnipeg, the Royal Canadian Mint still churns out more than a billion pennies, nickels, dimes, quarters, half-dollars, dollars, and two-dollar coins annually. It even fashions numismatic oddities like this $100,000 gold coin, a mere 22 pounds in your wallet.