Canadians: prepare to bid adieu to the penny

As of today, the Royal Canadian Mint will no longer be distributing pennies to banks and other financial institutions and will begin the gradual process ...

As of February 4, the Royal Canadian Mint will no longer be distributing pennies to banks and other financial institutions

As of today, the Royal Canadian Mint will no longer be distributing pennies to banks and other financial institutions and will begin the gradual process of removing the coins from circulation.

The federal government announced plans to phase out the one-cent coin in its Economic Action Plan 2012, citing the rising cost of production when compared with its value.

The mint estimates that the phase-out will save taxpayers $11 million per year.

The penny will still be considered legal tender indefinitely.

As for what this means to businesses and consumers, only cash transactions will be affected. Payments made by cheque, credit card and debit card will be unchanged.

Cash payments will now be subject to rounding to the nearest five cents. For example:

  • an item that costs $1.03 or $1.04 after tax will be rounded to $1.05; and
  • an item that costs $1.01 or $1.02 after tax will be rounded to $1.00.

The Canadian Federation of Independent Business (CFIB) is offering help to small businesses to make sure they are ready for penniless cash transactions.

“While most small merchants and consumers may be aware of the plan to phase out the penny, they may not be clear on the specifics,” said Dan Kelly, CFIB president and CEO. “As we want to ensure the transition goes smoothly, CFIB has put together a set of on-line tools merchants can use to inform employees and customers.”

CFIB’s penny-education tools can be found here

 

ecrawford@biv.com

@EmmaCrawfordBIV

comments powered by Disqus

Also Read

More From Economy

Canada’s annual inflation rate reached 1.2% in March, which is up from the 1.0% rate seen in...

Read Article

Tyler Orton discusses the central bank's most recent overnight rate announcement

Read Article

With no growth in 2015’s first quarter, Canada’s economy has effectively “stalled” 

Read Article

Economy

Insider trading, April 14, 2015

By April 14, 2015, midnight

The following is a list of stock trades made by corporate executives, directors and other company insiders of B.C.’s public companies filed the week ending ...

Read Article

Subscribe to our mailing lists

* indicates required

Newsletters

* You can modify your newsletter subscriptions at the bottom of any newsletter you receive.
×