Finance Minister Jim Flaherty announced Monday that the Royal Canadian Mint will no longer circulate the one cent penny as of Feb. 4, 2013, which is a revised date from the original announcement last fall.
Following meetings with small businesses and retailers throughout Canada, the Department of Finance learned that many business owners preferred that the transition date for the penny be postponed until after the busy holiday shopping season. Owners argue that this will give their staff and consumers enough time to prepare for the end of the penny.
Minister of Finance Jim Flaherty confirmed in a news release Monday that the penny will no longer be circulated as of Feb. 4, 2013. Originally, Flaherty announced that the Mint would not circulate the one cent penny as of this fall.
“Setting a clear transition date will allow consumers, businesses, charities and financial institutions to plan accordingly in the lead-up to February,” said Minister Flaherty. “We want to thank all Canadians for sharing their views with us, especially as it relates to this transition.”
In the meantime, the Mint will not be forced to produce new pennies because there is a sufficient supply.
As part of Prime Minister Stephen Harper’s Economic Action Plan 2012, the government stated in March that it was eliminating the penny from its coinage system. This would save the federal government about $11 million per year. Flaherty encouraged everyone to donate their pennies to charity.
Starting in the winter, all cash transactions will be rounded to the nearest nickel: $1.02 will be rounded down to $1.00 and $1.04 will be rounded up to $1.05. For debit, cheque or credit card transactions, there will be no need to do any rounding. The penny will maintain its value in perpetuity and will always be allowed in transactions.
The Canadian government will inform its citizens about the elimination of the penny in the coming months.