Goodbye, Penny

As of Feb 4th, the Royal Canadian Mint is longer distributing pennies, but consumers can continue to use them. Their value will be retained indefinitely.

According to the federal government, after Feb 4th, businesses will be “encouraged” to begin rounding cash transactions to the nearest five cents in a “fair and transparent manner.”

Non-cash payments such as cheques, credit and debit cards will continue to be settled to the cent.

The government says price rounding should only be used on the final bill of sale after the calculation of GST/HST, where applicable.

The penny, made of steel with copper plating and nickel, now costs 1.6 cents to produce, according to the government. It costs Canadians $11 million a year to produce. The cost of keeping the penny in circulation has been estimated to be as high as $250 million according to a study by the Desjardins Group in 2006.

Canadians can redeem pennies at their financial institutions. The government encourages Canadians to consider donating them to charities. Businesses will be able to redeem pennies with their financial institutions.