A penny for your thoughts?
Nope, not if you live in Canada. On Monday, the Canadian Mint started phasing them out of production.
You might be nostalgic for the pretty, Maple leaf-embellished coin, but letting it go is a smart decision for many reasons. The penny costs more money to mint than it is worth, it costs retailers to handle all the pennies that flow through their tills every year and it costs the environment. Plus, pennies are just annoying. The Canadian government announced the phase-out last summer.
Overall, the Canadian government estimates the phase-out will save taxpayers $11 million a year. And in other good news, several charities have launched successful penny drives. Free The Children has already collected 70 million pennies, which could provide a lifetime of clean drinking water to 28,000 people in developing countries, according to the NGO.
So what about when a transaction has change that doesn’t fall into a neat five or 10-cent denomination? No problem—cash transactions will be rounded to the nearest five-cent mark, while credit and check transactions won’t be affected. The penny will still retain value indefinitely, but it’s up to businesses whether they will accept the penny or not.
In the U.S., the zinc penny passed the one-cent mark in costs in 2006, and it now costs 2.41 cents to make each one. The U.S. is considering making pennies out of a cheaper metal, but hasn’t announced anything yet.
Canada joins other countries that have phased out pennies, including New Zealand, Australia, the Netherlands, Finland and Sweden.