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Penny Wise, Self-Promotion Foolish: No More Pennies for Canadians

Penny Wise, Self-Promotion Foolish: No More Pennies for Canadians

In the 2012 budget, the Harper government moved to eliminate the one cent coin. The penny costs more than one and a half cents to produce and it didn’t make sense any more to make them.The Finance Minister said the government would save taxpayers $11 million a year by stopping production.

Pennies are staying in circulation, but no more will be produced. The minister actually recommended that Canadians hurry to get the coin out of circulation by gathering all of their pennies and donating them to charity – something that means little at home can mean a lot when accumulated.

The penny became one of the main headlines out of the 2012 budget, since it was a quirky, simple to understand change that would effect everybody in the country.

To celebrate this great cost saving measure, the Finance Minister, Jim Flaherty, traveled to the Canadian Mint in Winnipeg and held a great photo opportunity for the printing of the last penny in May of 2012.

Thanks to information obtained by Postmedia news, we now know that media event cost Canadian taxpayers $56,000. That total includes the minister, his staff and the CEO of the Mint flying to Winnipeg, as well as the production costs of putting together the actual photo op.

This, of course, is not the first time the government has overspent on promoting their own agenda. They have also spent millions on ad campaigns promoting their various budgets.

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Photo Credit: Catherine Bulinski

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37 comments

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8:24AM PDT on Jul 31, 2012

That is a lot of pennies in spare change for their photo op! Could have sent that to me and would have certainly been put to better use! Help for some charities for the poor, care of some cats and dogs in shelters, so many things could have been done with the money spent on promoting themselves.

I have a fond spot for the penny and am sure that it could have been produced more cheaply. Agree with Dianne B. that we could have our two and one dollar bills back!

12:10AM PDT on Jul 17, 2012

This is the one and only thing I agree on with respect to the 2012 budget. New Zealand got rid of their one cent and two cent coins years ago rounding everything either up or down to five cents and it works great. Less change to worry about, less weight in men's pockets and obviously a financial saving for the government. They have to save a great deal to make up for the huge expense with the promo advertising cost they incurred advising us of the issue. All the other drastic cuts in the fake budget Bill C13 the public and the country will be paying for in many horrible ways for years to come.

9:20AM PDT on Jul 15, 2012

@Christina R., Good question and I "mostly" agree with you. Plus I wish we had a statistician in here to give us a solid answer on "who wins" or "does it even out" in the long run.
Certainly, eliminating the penny will require some changes to sales tax collection rates and regulations.
What I hope would happen:
1. The retailers would round down because it is in their competitive interest to do so.
2. The sales tax gets rounded up. That's kind of inevitable.
3. The long run means consumers save a few pennies one way, lose a few pennies the other way. And that it does even out in the end I hope!
Perhaps the rounding up on the sales tax would pay for a kid's school lunch, or go towards public health care.

8:28PM PDT on Jul 14, 2012

Pennies are a burden and make no sense. In Switzerland, we got rid of them over 40 years ago and it's been fine. Nobody misses them!

7:40PM PDT on Jul 14, 2012

It seems that no one is taking into account that sales tax gets added to most of the items we buy.

If the retail price were to be $5.95 + HST tax of 13% the total price would come to $6.72 how do you round that out?
You know that the government will not lower the HST, so what happens to the HST of .77 cents?
Will it go down to.75 cents or up to .80 cents?
Does that mean the extra 3 cents goes to the retailer or will it go into the HST coffers?
I was never great at math, and I hope someone can explain the few cents here or there created by the addition of the HST and who eventually ends up with it.
It seems there will always be a few cents more going one way or the other, but I am sure it will never be in favour of the buyer, it never is.

2:27PM PDT on Jul 14, 2012

Why piss around? Drop all the heavy coins and round everything up to the nearest dollar. Except for you Canadians of course-in your case round things up to the nearest 5 dollars. That might make, say maple syrup, 15$ for a dollop but Id still buy in.

1:16PM PDT on Jul 14, 2012

Govts don't do anything unless they benefit at our expense. So I trust that getting rid of the penny will cost us more.

11:32AM PDT on Jul 14, 2012

Yes gone....in Nov, of this year. Prices will probably be rounded off, and we will loose a few (cents) more. The only good thing is that many people are giving their pennies to charities.
No more 'penny for thoughts'
'Pennies from Heaven'
'One penny, two penny...more'.....
and if they are the old copper ones, well copper is worth a lot now.

11:18AM PDT on Jul 14, 2012

I believe the U.S. should do the same.
@Sandra W. brings up a good point: if a product's price is currently $5.97, will the seller change the price to $5.95 or $6.00?
As a person in marketing, I believe retailers will actually LOWER the price because pricing has a very psychological component. That's why things are deliberately priced at odd numbers, and usually just below the dollar mark.
A smart retailer will go for the $5.95. Greedy retailers will try the $6.00 route and find themselves at a disadvantage - then change their tactics.
So, start stocking up on nickels :-)

10:33AM PDT on Jul 14, 2012

Martin K, what if you're buying something that costs a quarter, but all you have in your pocket is nickels and dimes? Sorry, but your idea won't wash. And as long as the cents total comes out odd, there will ALWAYS be a need for pennies, so something tells me this idea of Canada's will backfire as well.

Norma S, I "upgraded" it to being a dime's worth of free advice instead of a nickel's worth because of the cost of living going up. The punch line is "of course since it's free advice, it doesn't matter in the slightest!" That always gets a laugh!

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