Sunday, February 03, 2013

Requiem for A Penny

Tomorrow, February 4, 2013, will be the last day that the Royal Canadian Mint will distribute the noble penny.  A coin of the realm for the past 155 years, the last of those bright sparkling, or after a bit of use dull dirty, cooper circles was minted on May 4 of 2012.

Not of course that the penny will disappear - there must be thousands of jars in homes across the land brimming over with them.  After all what else did you do with them?  They weighed down in pockets and took up room in change purses so the obvious place for them was in that old pickle jar or that big faux-Chinese vase that Aunt Mildred gave you for your first apartment.  And when the jar/vase was full there was the fun task of rolling them, only to find that you only had thirty dollar and 49 cents - there was always that one roll at the end that you couldn't quite complete.  All that work with so little return.  Damn pennies - who needs them anyway?

Well our Government in their wisdom decided to address that pressing question in their Economic Action Plan 2012 - the penny would be produced no more!  And their reasons were manifold:  the excessive cost of producing the coin (it is rumoured that it costs 1.06¢ to produce 1¢); environmental considerations (not sure what impact a penny has on the environment but....); and the handling costs that it imposes on retailers, financial institutes and the economy in general????  That and that fact that being a nation of hoarders we apparently have millions of them at home.

And what will be the benefit to us as Canadian when the penny disappears? I mean there must be a benefit to us little folks or our Government wouldn't have made such a weighty decision.  Well according to the Great Leap Forward EAP2012 it will save us taxpayers 11 million dollars a year.  With such a dent in the national debt I can hardly wait to see what sort of tax break it affords me in the coming years.  I'll let you know how that turns out in a future posting.

Now lest it be thought I am against the disappearance of said coin I am not.  The economics of ceasing to produce something at a loss makes sense to even someone as vague as myself when it comes to dealing with the Economy. The thought of no longer receiving coins that will wear holes in the pockets of my Land's End all weather dress pants fills me with joy.  And the very idea of no longer having to wash the dirt of my hands after rolling thirty dollars and 49 cents of pennies gives me some satisfaction.  So I will not weep tomorrow as the Royal Mint doles out their last remaining stock.

However that does not mean that tears will not flow in the next little while.  The penny is still accepted as the smallest unit in our monetary system and will still be included in calculations on goods and services.  And given the various taxes throughout our fair land the price of almost every article purchased from a chocolate bar to a Rolls Royce ends up in pennies.  This will be no problem if you are paying with a credit card or a cheque.  However if you are paying with cash - and yes some people still pay with cash - it will be up to the merchant if they wish to take them or not.  Should they choose not to they have a rounding up/down system which should prove interesting.  If the price is $1.01 - $1.02 then you pay $1.00 if its $1.03 - $1.04 then you pay $1.05.  I'm not being cynical but I have a feeling - based on something a cashier at our work cafeteria said - that it will be the $1.05 more often than the $1.00 for most things.

However I will cease to be a Casandra on the subject and go off and roll my remaining pennies - though I am wondering what is going to happen to all that copper when its returned to the Bank of Canada?  At a current price of $3.75 USD per pound the Government should realize another couple of million which will shave even more off my taxes!  Again I'll keep you posted.

In the meantime the Royal Canadian Mint has designed a rather fun infograph on the history of our late (lamented?) penny.   A left click on the small version of it I've posted on the left will take you to "The 1¢ Story".

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1 comment:

Debra She Who Seeks said...

To the penny, I say: Good riddance, ya bum, and take the nickle and dime with ya too when ya go.