A nickel for your thoughts on penny abolition

MP introduces private member's bill to halt penny production

Tuesday, April 7th, 2009

Handful of pennies

Jonas Hrebeniuk

HEY LOOK, IT'S THE MONTHLY STIPEND FOR GAZETTE STAFFERS! These days in Canadian commerce, pennies are essentially worthless. Do we punish those Canadians thirsty for nostalgia by eliminating the coin? Is it worth it considering the government would save millions of dollars by not producing such a small denomination?

“A penny for your thoughts” and countless other expressions may no longer mean anything if a Winnipeg MP has his way.

Winnipeg Centre New Democratic MP Pat Martin introduced a private members’ bill in the House of Commons last Wednesday that could end production of pennies and eliminate them from circulation, while rounding prices for cash transactions to the nearest nickel.

Pennies would no longer be accepted as legal tender, but Canadians would be able to trade in their penny collections for other currency for a period of time.

At the Spoke, a CLT would cost $4.15 including tax under the proposed system, down two cents from the current price.

Debit and credit transactions would not be affected by the rounding, and it would apply to the value of total transactions, rather than individual items.

Some argue this would create a mathematical oddity: if you buy a CLT daily for three days, you will pay a total of $12.45, but if you’re hungry enough to eat three all at once, it would cost $12.50.

Martin acknowledged if the majority of transactions are rounded up it could cause excess burden for low-income Canadians who can only pay by cash " but he believes rounding will be “revenue neutral” in the long run.

Second-year international relations student Jessica Dubinsky, who is against Martin’s bill, worried retailers will manipulate prices so that they are always rounded up.

Martin said that culture is one of the main reasons some Canadians want to keep the penny.

“[The penny] is a part of Canadian culture,” Dubinsky said.

“We have a romantic association with the penny,” he said, referring to the olden days of penny candy.

Russ Courtney, a third-year media theory and production student, is less romantic about pennies.

“It seems to be an annoyance to have them,” he said.

Kul Bhatia, an economics professor at Western, agreed with the bill.

“If it’s a straight cost-benefit analysis, then it’s a good idea,” Bhatia said, noting each penny costs four cents to produce.

According to Martin, a 2007 study by the Royal Canadian Mint said 63 per cent of Canadian retailers and 40 per cent of consumers are in favour of abolishing pennies, which cost $130 million per year to produce and take up 70 per cent of the capacity of the mint.

“If Canadians knew how much they cost [to produce], those numbers would go up,” Martin said.

If pennies were not produced, the mint could increase production of foreign coins, and the government could increase support of charities that currently rely on penny donations, he said.

Although private members’ bills tend to fail, Martin is confident that his will not.

“MPs from all four parties are interested,” he said.

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