This is a follow-up to a previous post. You can read the first one here.
I think Jim Flaherty reads my blog…
Canada made a surprising leap forward Tuesday, as Finance Minster Jim Flaherty, along with The Senate’s finance committee, announced that the government of Canada plans to remove the $0.01 penny from circulation “as soon as practicable”, which is expected to become official in 12 months.
The reasoning for the copper’s termination as legal tender is just what you would expect; they cost more to make than they’re worth, they take up a lot of room in peoples’ pocket/wallet, and most people don’t use them, so they pile up, unnecessarily. Hoarding of these individually useless pieces of metal has forced the Royal Canadian Mint to sharply increase production, which has, in turn, decreased the value of the penny, compared to what it was worth 100 years ago.
The thing that puzzles me is the specification during the statement of establishing guidelines for rounding off purchase prices for cash-only transactions. I’m curious about what this will mean for the increasing use of plastic for making purchases, whether prices will be rounded up or down when paying for merchandise with debit or credit, or whether cents will factor in at all.
Though the next 12 months will prove a challenge for retailers everywhere, I foresee it being a positive change for everyone. I’m sure most Canadians will at least be able to take comfort in the fact that they won’t have to fumble for exact change anymore at Tim Horton’s.