The federal government has given its two cents' worth on the penny — it doesn’t like it. “We will eliminate the penny,” said Finance Minister Jim Flaherty. “Pennies take up too much space on our dressers at home. They take up for too much time for small businesses trying to grow and create jobs.”
The government said it costs 1.6 cents to produce a penny, so by fall, it will stop issuing the coins in order to save $11 million a year.
Anti-penny campaigner Pat Martin was all smiles at the news.
“I never thought I’d see the day that I got something into a Conservative budget,” said the NDP MP.
The Canadian Federation of Independent Business said pennies just don’t make sense.
“Our members are very supportive of getting rid of the penny,” said CFIB Catherine Swift. “Pennies, unfortunately, have become more of a pain than they’re worth.”
One-cent coins will gradually be withdrawn from circulation, but consumers can continue to use them indefinitely.
When pennies aren’t available for cash transactions, businesses will have to round the after-tax price to the nearest nickel, which concerns the Canadian Restaurant and Foodservices Association.
Martin isn’t worried, though.
“People will catch on to that quickly,” he said.
Swift said rounding won’t hurt consumers.
“In other jurisdictions that have done similar things, like got rid of their low-value coin, it turns out to be a wash,” said Swift.
Non-cash payments, by credit card or cheque for example, will still be charged to the exact cent, even without the penny.
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