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The Canadian government has begun to phase out the penny, saying it’s too expensive to produce the coin.Besides its “excessive” production value, Canada has long cited the significant handling costs for the nation’s retailers and environmental considerations that lessen the penny’s worth. The country, which produced its last pennies on Monday, estimates the move will save taxpayers about $11 million a year.
The potential savings have enticed U.S. officials to consider the possibility as well.
Cash transactions in Canada will now be rounded to the nearest 5-cent mark. The penny’s retirement will have no effect on payments made by checks or credit cards.
For example, if the total price of coffee and a sandwich is $4.92, a customer that was paying in cash would owe $4.90, according to the Royal Canadian Mint. But those using another method of payment would pay $4.92, and the pennies would be tallied electronically.
The cost of the metal that goes into a penny has surged in recent years, making the coin’s production more expensive than its face value.
In the U.S., it now cost 2.41 cents to make every penny, which is made mostly of zinc. The penny has cost more than its face value since 2006.
Although the U.S. has conducted significant research into alternatives for the penny, the U.S. Mint says it still needs more research before it can make a decision to either change its composition or do away with it altogether.
Any new materials for the penny would need to simulate the current look and durability of the nation’s most circulated coin.
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