Royal Canadian Mint starts to phase out penny

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VANCOUVER (NEWS1130) – The phasing-out of the penny starts today, with the Royal Canadian Mint officially ending its distribution of one-cent coins to Canada’s financial institutions.

The move comes nearly a year after Finance Minister Jim Flaherty announced the demise of the penny, whose production cost came to exceed its monetary value. But as it faces extinction in the pockets and tills of most Canadians, the humble penny is still in demand in some artistic circles where it retains significant value.

The Bank of Canada’s Currency Museum has already taken steps to preserve the penny’s place in Canadian culture.

A mural consisting of nearly 16,000 one-cent pieces has been assembled at the museum to commemorate the coin’s history, said assistant curator Raewyn Passmore. The mosaic, which depicts a giant penny measuring about two square metres, is comprised of coins ranging from the lustrous to the tarnished.

Passmore says the design is meant to honour a coin which, while lacking buying power now, enjoyed many years of prominence since its first minting in 1858.

The logistical challenges associated with the penny were among the reasons Flaherty cited for discontinuing the coin, adding that the economic toll worked out to about $11 million a year.

Retailers will be among the first to phase out the coin, and Canadians will see the effects almost immediately.

The federal government has issued guidelines urging store owners to start rounding prices up, or down, to the nearest nickel for cash transactions. Electronic purchases will still be billed to the nearest cent.

The rounding formula means:

  • Amounts ending in 1 or 2 are rounded down to the nearest 10 cents
  • Amounts ending in 6 or 7 are rounded down to the nearest 5 cents
  • Amounts ending in 3 or 4 are rounded up to the nearest 5 cents
  • Amounts ending in 8 or 9 are rounded up to the nearest 10 cents
  • Amounts ending in 0 or 5 remain unchanged

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