The phasing-out of the penny began on Monday, with the Royal Canadian Mint officially ending its distribution of one-cent coins to Canada’s financial institutions and retailers will round cash transactions to the nearest nickel. (THE CANADIAN PRESS)
They’re all over your car. In your couch. In jars, jugs, and mugs. And charities are taking advantage of the end of the Canadian penny, which was distributed for the last time yesterday.
Prairie Oasis Senior Centre in Brandon has been collecting the coins since the government stopped production in the spring. Since then, it has raised $750 worth of copper coins, and has a goal of $1,000 to give to the local Meals on Wheels program.
Manager Debbie Arnott-Sicinski said she expects the penny drive to ramp up with the end of distribution.
"There won’t be any stashes anymore in the piggy banks," she said.
Prairie Oasis, located at 241 Eighth St., will accept any and all penny donations.
While local organizations are looking for stray coins, large companies have also increased promotion of its charities.
Tim Hortons’ Children’s Foundation, Canadian Tire’s Jumpstart campaign and McDonalds’ Ronald McDonald House have all ramped up campaigns with the phase-out.
This week, RBC Royal Bank has also saluted the send-off with the Toronto-based charity Free The Children, a youth-based initiative which has raised 70 million pennies this academic year to bring clean water to Third World countries. The bank is encouraging everyone to bring in any amount of pennies to any RBC branch, including those in the Brandon area.
As of Monday, businesses will not be issued the coin, but should still accept them as currency indefinitely.
Federal government guidelines for cash payments state businesses can round, either up or down, to the nearest five-cent increment.
For instance, a total of $1.92 will be rounded to $1.90 and $1.94 will go up to $1.95.
Retailers will only round on cash transactions, and those customers paying with debit cards, credit cards, and cheques will not be subject to rounding.
But there is flexibility to the rules.
Home Depot Canada, for example, announced it will round all sales totals down to the nearest nickel and round up all return transactions.
While businesses welcome the change, there are two sides to every coin.
Arnott-Sicinski said seniors — who are likely to still pay with cash frequently— are frustrated with the rounding process.
"They’ll be losing four cents, generally (per transaction)," she said. "They’re not happy with that at all."
The impending demise of the penny has seen regular media attention since Finance Minister Jim Flaherty made the announcement last spring, but Arnott-Sicinski said seniors she has spoken to are still confused about the details.
According to the Department of Finance, "businesses are expected to round the final amount (or equivalently, the change owed) of any cash payment in a fair, consistent and transparent manner."
Government guidelines are based on those of other countries, which have also dropped their lowest denomination coin from circulation including Switzerland, the United Kingdom, Norway and Australia.
A survey conducted for the Retail Council of Canada found just over half of retailers are prepared for the phase-out.
Brandon Chamber of Commerce president Nate Andrews said the date snuck up on some local businesses, but overall, owners are happy with the change.
The survey also found that 74 per cent of small retail businesses in Canada and 75 per cent of medium businesses will round manually at the cash register.
But the survey also revealed 63 per cent of large businesses will be changing their point-of-sale systems, which could cost as much as $100,000, according to the Retail Council.
It costs the Royal Canadian Mint 1.6 cents to make the penny, and to stop production on the one-cent piece will save taxpayers $11 million a year, according to the government.
With 35 billion of them still in circulation, it’ll be a while before pennies will disappear completely from pockets, but soon the mint will begin to melt down and recycle the metal.
Republished from the Brandon Sun print edition February 5, 2013