THUNDER BAY – Production of the penny will end on February 4, 2013. The Royal Canadian Mint is ramping up to end production of the one cent coin.
The move is designed to save money. The cost of producing the one cent coin is more than the face value of the coin. The plan will save eleven million dollars annually.
Jim Flaherty, Minister of Finance, in partnership with the Royal Canadian Mint marked the start of a month-long countdown to February 4, 2013, the transition date for the phase-out of the penny.
“Throughout the next month, we will take advantage of every opportunity to remind consumers, businesses, financial institutions and charities that the supply of pennies will begin to diminish after February 4, when the Royal Canadian Mint ceases to distribute them,” said Minister Flaherty.
In early December, answers to frequently asked questions about the phase-out of the penny were released on the Department of Finance’s website so that businesses and consumers could begin preparing for this transition. A penny toolkit was also launched featuring information that retailers could download and display in their stores in advance of the transition date.
“These updated tools and materials provide clear information on how cash payments will be treated when pennies are not available,” added the Minister.
Penny Planning Tools
The phase-out of the penny, first announced in last year’s federal budget, will have no impact on cheque payments or electronic transactions. Moreover, the penny will retain its value indefinitely, and can continue to be used in cash transactions with businesses that choose to accept them.
For cash payments, businesses are expected to round the final amount – or equivalently, the change owed – of any cash payment in a fair, consistent and transparent manner. Experience in other countries that have phased out low-denomination coins has shown that fair rounding practices have been respected.
“After producing the penny for Canada since the Mint opened in 1908, the last distribution of this iconic coin is a sentimental turning point in our history,” said Ian E. Bennett, President and CEO of the Royal Canadian Mint. “The Mint continues to adapt to the changing needs of the marketplace and will fully support the Government of Canada and key stakeholders to ensure the successful phase out of the penny”.
