Global Interesting News
Canada to drop penny from circulation
- Written by Yespunjab Journalist
Ottawa, July 31 (Agency)
Canada will no longer circulate the one-cent coin as of Feb 4, 2013, Finance Minister Jim Flaherty announced.
In his 2012 federal budget delivered in March, Flaherty said the Royal Canadian Mint would stop distributing the coins, worth 1/100th of a Canadian dollar ($0.9983), this fall since it costs 1.6 cents to produce each cent coin, or 11 million Canadian dollars annually, reported Xinhua.
However, Ottawa delayed the move to a penny-less marketplace after consulting with small business and retailers who requested the transition date occur after the busy Christmas holiday shopping season.
The federal finance department also said the new date would enable charities to hold special "penny drive" fund-raising campaigns to collect the coins before they're out of circulation.
With the cent, popularly called penny, officially out of circulation early next year, the federal government expects a slight increase in demand for higher-denomination coins, such as the five-cent nickel, 10-cent dime and 25-cent quarter, resulting in a rise in net-coinage revenues.
Twentyfive years ago, Canada dropped its one-dollar bill and replaced it with a gold-coloured coin dubbed the loonie because it featured the image of a common loon, a bird familiar in Canada's lake country, on one side.
In 1996, the two-dollar bill was also replaced with a nickel and copper coin - the toonie - that features an adult polar bear on the reverse.
The federal government says dropping the one-cent penny will result in environmental benefits. The mint will be able to reduce the use of base metals in its coin-production process and metals from pennies (composed mainly of steel) will be recycled. Ending their production will also save energy used to make, transport and distribute pennies.
Over the past five years alone, about 7,000 tonnes of the coins have been produced and distributed annually.
Canada's last penny was produced in early May.
However, the coin will remain legal tender in Canada and non-cash payments (such as through debit, credit cards and checks) will still be settled to the cent. If the coins are unavailable, cash transactions will be calculated to the nearest five-cent increment.
The formal end to the penny's production in Canada follows the end of production or removal from circulation of low-denomination coins in other countries such as Britain, Australia, New Zealand, Switzerland, Brazil, Israel, and India.
In use since 1858 - nine years before Canada became a country - the penny was made of copper until 1997.