A Thought for Your Penny
Trent Ernst, Editor
On February 4, the day you were long been dreading came to pass. Yes, the Royal Canadian Mint has stopped distributing pennies.
Monday was also the day that businesses were encouraged to start rounding up or down to the nearest five cent increment, so don’t be surprised it the next time you go into Tags and buy something for $1.17, but only get $0.80 back from your Toonie.
The government is leaving it up to individual businesses as to how they handle the transition. Banks, on the other hand, are not allowed to distribute pennies anymore. “While businesses do not have a legal obligation to accept any particular Canadian coins or bank notes in a retail transaction,” the Mint says on their website, “the penny will continue to be legal tender like all other Canadian coins, and businesses may accept the coin as a means of payment if they so choose.”
According to mint’s website, businesses are expected to round the change owed of any cash payment “in a fair, consistent and transparent manner.”
The mint says that “symmetrical rounding will be adopted by all federal government entities for cash transactions with the public. Experience in other countries that have phased out low-denomination coins, such as Australia and New Zealand, has shown that fair rounding practices have been respected.”
Note that this only affects cash sales. “Payments made using non-cash methods such as cheques and electronic payments—debit, credit and other payments cards such as gift cards and prepaid credit cards—do not need to be rounded, because they can be settled electronically to the exact amount. They should be calculated in the same manner as before.”
According to the Royal Canadian Mint, they will be saving $11 million a year by phasing out the penny. While the penny is no longer being distributed, it will remain legal currency indefinitely.
The estimated savings for taxpayers from phasing out the penny is $11 million a year.