julianD
01-17-2014, 08:50 PM
Canada has officially stopped the circulation of its cent. The move has put a decades-old discussion back on the front-burner in the U.S. Source of article:
Goodbye penny
Getting Canadian pennies (http://personalmoneynetwork.com/moneyblog/2012/05/08/eliminating-penny/) is already really annoying when you are getting your change back. Now, they won’t be worth anything either since the Royal Canadian Mint formally took the coins out of distribution on Feb. 5. Now, you may not even see Canadian pennies anymore.
The Canadian cent was used for a year and a half. Now, it is going to disappear. All cash dealings will be rounded to the nearest five pennies to avoid pennies.
Reasons for change
The reason for that is as the rising cost of metals has made pennies more expensive to produce than their one cent face value.
A press release Tuesday states, "The decision to phase out the penny was due to its excessive and rising cost of production relative to face value, the increased accumulation of pennies by Canadians in their households, environmental considerations, and the significant handling costs the penny imposes on retailers, financial institutions and the economy in general."
Every penny costs Canada 1.6 pennies. The country will save $11 million a year with the change.
Canada is only the latest country to make the move. Australia, Finland, New Zealand, Norway, Netherlands and Sweden have also phased out their smallest-denomination coins.
What about U.S. debate
In the meantime, south of the border, the news has re-sparked the debate over whether or not to phase out the United States penny. Domestically, we are losing much more by keeping the penny than are our neighbors to the north. A U.S. cent now costs a whopping 2.41 pennies to make. According to RetireThePenny.org, United States working class individuals lost about $70 million in 2011 to the Lincoln-faced coin.
A lot of people argue that a price increase would take place if everything was rounded to the closest 5 pennies. Still, others suggest it would virtually end itself out since some things would go up and others would go down.
There are ton of cent drives out there, and pennies have a vital use (http://"https://personalmoneynetwork.com/cash-advance) for them. People may not be as willing to donate larger coins because of their higher value.
However, a recent poll found that two-thirds of Americans prefer keeping the penny.
Attempting to work on it legislatively
There just is not enough support to eliminate the cent. It was attempted in 1990, 2001 and 2006, none of which were successful.
Last April, the House Financial Services Subcommittee on Domestic Monetary Policy and Technology looked to the impact of discontinuing the circulation of the penny.
Sources
Chicago Tribune (http://articles.chicagotribune.com/2013-02-05/business/chi-canada-drops-penny-from-its-currency-20130205_1_penny-royal-canadian-mint-coin)
Medill Reports (http://news.medill.northwestern.edu/chicago/news.aspx?id=215299)
Foxborough Patch (http://foxborough.patch.com/articles/canada-does-away-with-pennies-should-the-u-s-follow-suit)
Goodbye penny
Getting Canadian pennies (http://personalmoneynetwork.com/moneyblog/2012/05/08/eliminating-penny/) is already really annoying when you are getting your change back. Now, they won’t be worth anything either since the Royal Canadian Mint formally took the coins out of distribution on Feb. 5. Now, you may not even see Canadian pennies anymore.
The Canadian cent was used for a year and a half. Now, it is going to disappear. All cash dealings will be rounded to the nearest five pennies to avoid pennies.
Reasons for change
The reason for that is as the rising cost of metals has made pennies more expensive to produce than their one cent face value.
A press release Tuesday states, "The decision to phase out the penny was due to its excessive and rising cost of production relative to face value, the increased accumulation of pennies by Canadians in their households, environmental considerations, and the significant handling costs the penny imposes on retailers, financial institutions and the economy in general."
Every penny costs Canada 1.6 pennies. The country will save $11 million a year with the change.
Canada is only the latest country to make the move. Australia, Finland, New Zealand, Norway, Netherlands and Sweden have also phased out their smallest-denomination coins.
What about U.S. debate
In the meantime, south of the border, the news has re-sparked the debate over whether or not to phase out the United States penny. Domestically, we are losing much more by keeping the penny than are our neighbors to the north. A U.S. cent now costs a whopping 2.41 pennies to make. According to RetireThePenny.org, United States working class individuals lost about $70 million in 2011 to the Lincoln-faced coin.
A lot of people argue that a price increase would take place if everything was rounded to the closest 5 pennies. Still, others suggest it would virtually end itself out since some things would go up and others would go down.
There are ton of cent drives out there, and pennies have a vital use (http://"https://personalmoneynetwork.com/cash-advance) for them. People may not be as willing to donate larger coins because of their higher value.
However, a recent poll found that two-thirds of Americans prefer keeping the penny.
Attempting to work on it legislatively
There just is not enough support to eliminate the cent. It was attempted in 1990, 2001 and 2006, none of which were successful.
Last April, the House Financial Services Subcommittee on Domestic Monetary Policy and Technology looked to the impact of discontinuing the circulation of the penny.
Sources
Chicago Tribune (http://articles.chicagotribune.com/2013-02-05/business/chi-canada-drops-penny-from-its-currency-20130205_1_penny-royal-canadian-mint-coin)
Medill Reports (http://news.medill.northwestern.edu/chicago/news.aspx?id=215299)
Foxborough Patch (http://foxborough.patch.com/articles/canada-does-away-with-pennies-should-the-u-s-follow-suit)