Editorial: A penny saved is $130 million earned

By Gauntlet Editorial Board

Dear fellow Canadians, the penny, our favourite copper currency (4.5 per cent copper plating on nickel and steel as of 2000, to be precise), has been scheduled for retirement. The sou noir has become nothing more than cumbersome pocket change, often abandoned or hoarded, useless for most purchases and nearly void of all value.

The news of the penny’s fate came during finance minister Jim Flaherty’s budget announcement, and the Canadian media haven’t shut up about it since. While the penny will remain a usable medium of exchange — just as cheap linguistic currency like “penny pinching,” “penny for your thoughts” and “a penny saved is a penny earned” will remain in lexical circulation — in six months time the Royal Canadian Mint will no longer be pumping out the copper-covered coins. It supposedly costs some $130 million per year for government, financial institutions, retailers and consumers to keep the cent circulating (2006 was a peak year for penny production, costing us $150 million). The material with which the penny is made goes above and beyond its market value (the cost to produce a penny is 1.6 cents). And since most citizens are likely to toss or hoard this lesser coinage — forcing the mint to continually produce them as to keep them in circulation — it seems that the penny’s demise is somewhat inevitable. After 154 years of the penny’s use in Canada, during which economic expansion and inflation have taken their toll, the decision is probably for the best.

Nations eliminating defunct or problematic currency is common practice, since when a coin is costing us more to keep around than any financial benefit we may receive from it, a simple discontinuation may help balance a budget. But we must be cautious in applauding the choice to rid ourselves of our one-cent piece. After all, the Harper budget is a frightening affair, but has been overshadowed by the media hype surrounding mere pennies. With dramatic cuts to operational spending, reactionarily reforming the structure of government bureaucracy (causing a loss of 19,000 public-service jobs), and a critical revaluation of Old Age Security which may threaten the pensions of today’s payees, it seems somewhat absurd that so much attention is being paid (we’re not above contributing) to a coin whose Australian equivalent was axed in 1992 and whose British counterpart was phased out in 1984. While eliminating the penny is probably a fiscally-sound plan, it’s hard to respect the financial decisions of a government that cuts its funding to social programs to be able to afford defunct war planes and special issue gold-embossed business cards for John “foghorn” Baird.

Precious metal currency, the gold standard and other Ron Paul kook-type arguments aside, the discontinuation of the one-cent piece seems like a timely and positive decision. While mass media has bludgeoned the penny story to death rather than shedding light on other pressing economic issues that ought to worry Canadians, the elimination of the penny is at least one small step in the right direction. We look forward to the day that perhaps we will no longer carry not just unnecessary pennies, but will wander here and there without the deadweight of nickels, dimes and Harper too.

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