Canada minted its final penny today as
Finance Minister Jim Flaherty said the coin was too expensive to
produce and no longer needed for business.

“The real issue was that people weren’t using them, they
were putting them in jars at home, and we were doing the same
thing at my house,” Flaherty said. He spoke today at the Royal
Canadian Mint in Winnipeg, Manitoba, before pushing a button
that stamped the last one-cent coin.

The longest-serving finance minister in the Group of Seven
nations promised in his March 29 budget to save C$11 million
annually by eliminating the coin that he says costs 1.6 cents to
mint. The price of copper, which is used in the penny’s
production, has surged more than 330 percent since 2000.

Getting rid of the coin will have little impact on
inflation, the Bank of Canada said in a May 2010 report.
Electronic transactions will still be priced in cents, while
retailers will round cash transactions to the nearest five-cent
interval, according to the budget documents. The coin will still
be usable in payments.

“It’s a bit hard to swallow,” said Francois Gendron, the
34-year veteran press operator who helped Flaherty strike the
last coin. “It’s a bit of history.”

The mint has produced 35 billion pennies since it began
production in 1908. Distribution of the coin will end later this
year. Pennies have been made of copper-plated zinc and copper-
plated steel since 1997. The last penny will go to the country’s
currency museum in Ottawa.

“I’m not going to miss the penny,” said Mike Gregoire,
37, who was touring the Mint with his son. “I find it more of a
nuisance; I rarely ask for my pennies back” as change from
shopkeepers, he said.

The penny, with two maple leaves on one side and a portrait
of Queen Elizabeth II on the other, has lost 95 percent of its
purchasing power since it was first produced by the mint.

To contact the reporter on this story:
Greg Quinn in Winnipeg, Manitoba, at
gquinn1@bloomberg.net.

To contact the editors responsible for this story:
Christopher Wellisz at
cwellisz@bloomberg.net;
David Scanlan at dscanlan@bloomberg.net.

Article source: http://www.businessweek.com/news/2012-05-04/canada-stops-making-cents-as-flaherty-lets-penny-drop

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