Senate votes to kill Canada’s penny
The upper house of Parliament, apparently finished snuffing out climate change bills, has turned its eyes to a cause that warms the hearts of a small cadre of obsessed economists throughout the country: killing the penny. According to the Toronto Star, the Senate Committee on National Finance is set to recommend that Canada ditch the one-cent piece, largely because it had lost 95 per cent of its purchasing power since being introduced in 1908:
It now costs more to produce the penny—about 1.5 cents each—than the coin’s actual face value.
The Royal Canadian Mint has been forced to sharply increase production of the penny in recent years as more and more Canadians hoard, rather than use the copper.
How do stores deal with a penny-less world? In Australia, sales are rounded to the nearest five cents, and in New Zealand (where those Hobbit-loving currency extremists even pulled the five-cent piece in 2006), sales are rounded to the nearest 10 cents. A penny-less Canada might mean unclogged fountains and empty tip jars.
Come to think of it, all the uses we can think of for the penny involve throwing it away. But will this be a slippery slope? Once we get rid of the penny, do we go the Kiwi route and get rid of the nickel? Is Canada ready for an argument over whether or not we ditch the beaver?
• Senate committee report recommends killing the penny [Toronto Star]
• The penny drops: Senate committee report recommends killing the coin [Winnipeg Free Press]
, sales are rounded to the nearest 10 cents. A penny-less Canada might mean unclogged fountains and empty tip jars.
Come to think of it, all the uses we can think of for the penny involve throwing it away. But will this be a slippery slope? Once we get rid of the penny, do we go the Kiwi route and get rid of the nickel? Is Canada ready for an argument over whether or not we ditch the beaver?
• Senate committee report recommends killing the penny [Toronto Star]
• The penny drops: Senate committee report recommends killing the coin [Winnipeg Free Press]){kind=link}
Ditch the penny and the beaver.
Finally. Get rid of it.
The system “down under” of rounding it to the nearest (when doing cash transactions) works well.
it’s too bad greedy merchants wont round it down
How many different businesses are involved with the production of a product from zero to the retailer’s shelf?
The farmer grows the corn, but not without purchasing fertilizer. The food processor purchases the cans from a can manufacturer, the printer prepares the labels, the shipping company delivers the finished product to the distributor, the distributor delivers them to the wholesaler, and the wholesaler delivers them to the retailer. The retailer puts an ad in the newspaper to advertise a “Sale on Creamed Corn”.
So . . . how many people rounded up to the next nickle. I”ll bet that eliminating the penny could increase the price of a can of corn by a quarter.
No one but the final consumer does transactions in cash. Even if they did they are selling 50000.02 dollars worth of corn or shipping…. One can of corn worth of resources is not passed up from the field individually
Perhaps the “round-down” or “round-up” should not be done until the full transaction is completed, rather than on the individual items, which can still be priced to the penny.
I will buy 9 cans of corn at $0.91 each for a total of $8.19, and then pay the “rounded” price, but I don’t want to buy 9 cans of corn at the “rounded” price of $0.95 for a total of $8.55.
Also, if I pay using a method (e.g. credit card, debit card) that is precise to the penny, then I should have the option to do so, without any penalty (which implies that cash users will be penalized.)
Jason, that is not at all how it works. The retailers don’t buy one can of corn at a time. If they buy 10 000 cans at 99 cents each, it will actually round out to 9990$, not 10 000$ as if they rounded each item individually. It’s exactly that way today, where some items are priced partially at less than a penny- for instance gas at 99.9 cents. The law requires rounding down up to .6, which means the maximum you could ever “lose” on any transaction would be 2 cents, and in 60% of transactions the merchant would lose 3. Overall, the consumer comes out a winner. Considering how slow they have been to do this, I’d say they should get rid of the nickel too or this debate will re-appear in 10 years.
Has anyone considered that no one will round down their prices (I wouldn’t) which would cost every single one of us a lot more in the end. Are we gonna see any economic benefit in Canada by the government not making the penny anymore? The so called “savings” will just vanish like most of our tax money does. What I mean is the roads won’t be improved, or taxes won’t be cut. Seriously, it will probably do more harm then good. Lets say gas is 96.9, I guarantee you the gas companies will not round down to 95.0, but up to 100.0 rather. That’s just one example. If you think they will only round on the final cost then your probably wrong. This is a good excuse for the consumer to get screwed with true or false claims from retailers that the loss of the penny has forced them to pay so many cents more for their stuff.
I like beaver.
“lost 95 per cent of its purchasing power since being introduced in 1908”
Get rid of your paper now it’s lost 95% of it’s value. Oops! I mean only the Penny lost 95% of it’s value. Sheep!
wow bob that is Naïve.
If I were a store owner selling goods and all four of my competiters rounded up I would round down to increase buisness.
Market competition will keep inflation in cheack.
First the rounding of the price is only on the final transaction amount after taxes, and is only on cash transactions (debit and credit card amounts will stay exact to the cent)
Also the rounding up or down is not at the choice of the merchant. prices finishing by 1 or 2 cents will be rounded down and 3 and 4 cents will be rounded up.
Stop with the conspiracy theories, this is not a new way that ” THE MAN ” has found to get to you. It is just a way to stop wasting millions of dollars making a coin that nobody wants. if canadiens wanted the penny we wouldn’t have to make about 1 billion pennies every year to replace the ones that we throw away!!!
THE MAN