No more penny?
Posted Dec 14, 2010 05:36:15 AM.
This article is more than 5 years old.
OTTAWA – The penny may have finally dropped in Ottawa.
The Senate finance committee is set to recommend today that Canada drop the one-cent coin.
Sources say the committee has concluded that a century of inflation has eroded the value and usefulness of the penny.
The Bank of Canada says the copper-plated coin has lost 95 per cent of its purchasing power since it was first produced in 1908.
In fact, it’s a money losing proposition because it costs about 1.5 cents to make one penny.
The Royal Canadian Mint has sharply boosted production of the penny in recent years because more Canadians are hoarding them.
Finance Minister Jim Flaherty and his department have reportedly been studying the penny-free economies in Australia and New Zealand.
The Bank of Canada has also studied the potential inflationary impact of eliminating the penny and has concluded it would be negligible.
