After more than 150 years of production, Canada will withdraw the penny from circulation, beginning later this year, the government announced earlier this week.
“The penny is a currency without any currency in Canada,” Finance Minister Jim Flaherty said.
Ottawa said the penny retained only one-twentieth of its original purchasing power. It costs 1.6 Canadian cents to produce each one-cent coin and eliminating the penny will save around $11 million a year.
“Some Canadians consider the penny more of a nuisance than a useful coin. We often store them in jars, throw them away in water fountains or refuse them as change,” the government said in a budget document.
Other nations that have either ceased to produce or have removed low denomination coins include Australia, Brazil, Finland, Israel, the Netherlands, New Zealand, Norway, Sweden, Switzerland and Great Britain, Reuters reported.
“There are 30 billion pennies in circulation and every year they are minting more. It was just one of those no-brainer slam dunks. It’s a place where we can save money,” said opposition legislator Pat Martin, a longtime advocate of abolishing the penny. “Of the 30 billion pennies, I think half of them are under my bed in a big jar.”
The Royal Canadian Mint will stop distributing penny coins to financial institutions later this year. As the coin slowly disappears, prices for cash transactions will be rounded up or down to the closest five cents, according to the wire service.
Non-cash payments such as checks, credit and debit cards will continue to be settled to the cent, Reuters added.