Saturday, March 31, 2012

Federal Budget Leaves Canadians Penniless


When I moved into my apartment the previous tenant didn't take everything with them. What they left was a bag full of pennies!

Last Thursday's Federal budget took many by surprise: Canada's love affair with the one cent piece is over. Joining Australia, the government will phase out the lowest denomination coinage.

The first penny looked like this. http://pennies.deepskies.com/
When it was introduced in 1858 it did not catch on. People were use to using British currency. They also preferred American and Spanish coins along with a slew of bank tokens. The Canadian penny was lighter than its competition and was often devalued at a rate of 20%. But the government persisted in producing them.

Because of the high cost of copper the size was decreased in 1920 to what it is today...


1997 saw the another cost-cutting blow to the penny: It went from being mostly copper to being made out of zinc. But the coin still soldiered on. However, it is estimated that it still costs the mint 2 cents to make just 1 so its discontinuation was inevitable.

The mint has been making 25 pennies for every Canadian every year. This is because most of them simply disappear from circulation. (Many have ended up in a bag in my closet).

But the good news is that the one cent piece will retain its value indefinitely so you won't have to take all of your jars full of them and spend them right away...



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