Canada Scraps Penny, Goes After Nickel: The Path to Cashless Society?
2013-02-07 0:00

From: CBCNews

Will nickel follow penny out of Canadian coin circulation?



5-cent coin should be next to go, says economist

As the penny is set to begin retirement next month, there are already calls to put the nickel out to pasture as well.

[Mint officially ends distribution of Canadian penny - Feb 4, 2013]

The Royal Canadian Mint starts collecting one-cent coins on Feb. 4 for melting and recycling of the metal content, with some six billion pennies expected to be surrendered by Canadians over the next six years.

Finance Minister Jim Flaherty announced the surprise demise in last year’s budget, saying the penny had become a nuisance.

And a former Bank of Canada economist says the nickel is also becoming obsolete, and should be next in line for retirement.

"We see less and less people now ... digging in their wallets for nickels," Jean-Pierre Aubry said in an interview. A retired 30-year veteran of the Bank of Canada, Aubry has been a leading proponent of withdrawing the one-cent piece from circulation.

In papers and presentations for Desjardins Group over the last few years, Aubry used economic models to show that the penny should actually have been killed in about 1982.

That was a tipping point, as more Canadians hoarded the coins and the Royal Canadian Mint was pressed to churn out billions more to keep retailers stocked, costing the government up to $11 million annually.
5-cent coins hoarded by Canadians

The last pennies minted on May 4 in Winnipeg were costing about 1.6 cents each to manufacture. Aubry also estimates retailers, banks and consumers have absorbed about $140 million in handling costs each year, creating an unnecessary drag on the economy.

Even though Finance Canada faces a one-time net cost of $38 million to retire the penny, the long-term savings to government and to the economy will be substantial.

Aubry argues the nickel will soon hit the same tipping point the penny did in 1982, as Canadians hoard them in greater numbers, forcing the mint to distribute up to 350 million each year to meet retail demand.

"It’s a sign that the coin is not well used," he said.

The Royal Canadian Mint has teamed in recent years with Coinstar Inc. to place automated coin-sorting and counting kiosks in grocery stores and other retail outlets to prod Canadians into circulating coins now stuck in jars and drawers. Most of these recycled coins are pennies, but many are nickels.

A spokesman for vending-machine operators told a Senate committee in 2010 that Canada should just dump the little-used nickel.

"As far as our industry is concerned, eliminating the penny is a good step and a smart business decision," said Kim Lockie, then-president of the Canadian Automatic Merchandising Association.

"We suggest the nickel go at the same time. If there is a little bit of a problem, we get it all over with at once."

[...]

Read the full article at: cbc.ca



Related Articles
The Cashless Society is Almost Here – And With Some Very Sinister Implications
Sweden aims to be cashless society
Canada Takes Unprecedented Step Towards A Cashless Society
Is a cashless society around the corner?
P2P Currency - Bitcoin
Dr. Paul Craig Roberts: Our Collapsing Economy and Currency
Think tank says Euro currency has 1-in-5 chance of lasting the decade


Latest News from our Front Page

The Truth About Starbucks New Coconut Milk: It Isn’t Really Coconut Milk
2015-03-03 22:14
In an attempt to appeal to the non-dairy crowd, Starbucks is bringing “coconut milk” to the masses. After a successful trial run in select cities at the behest of their customers, Starbucks has decided to push forward with their dairy alternative. Providing a non-dairy alternative to dairy and soy is the second most requested customer idea of all time from MyStarbucksIdea.com, ...
USDA on board with shipping U.S. chickens to China for processing, then re-entry to States for human consumption
2015-03-03 21:32
“Chinese chicken” will soon have a whole new meaning, as the U.S. Department of Agriculture recently gave the green-light to four chicken processing plants in China, allowing chicken raised and slaughtered in the U.S. to be exported to China for processing, and then shipped back to the U.S. and sold on grocery shelves here. Furthermore, the imported processed ...
Feinstein: Netanyahu does not speak for all Jews
2015-03-03 21:52
US Senator Dianne Feinstein, chair of the Senate Select Committee on Intelligence, has denounced Israeli Prime Minister Benjamin Netanyahu as an “arrogant” man who does not speak for all Jews. The Jewish lawmaker made the remarks in an interview with CNN on Sunday ahead of Netanyahu's controversial visit to the United States. The Israeli premier arrived in Washington, DC, on Sunday night ...
Netanyahu to US: Don’t negotiate ‘bad deal’ with Iran
2015-03-03 21:12
Israeli Prime Minister Benjamin Netanyahu has called on the United States not to negotiate “a very bad deal” with Iran over its nuclear energy program. Speaking at a joint session of the US Congress in Washington, DC, on Tuesday, Netanyahu said, “We’ve been told for over a year that no deal is better than a bad deal. Well this is a ...
School Textbook: “There’s No Such Thing as Reverse Racism” Only White People can be Racist
2015-03-03 2:14
Only white people can be racist. A school textbook teaches students that “there is no such thing as reverse racism” and that women can never be as sexist as men. The passage, which appears to be taken from a “multicultural education series” book entitled Is Everyone Equal, states, “STOP: There is no such thing as reverse racism or reverse sexism (or the ...
More News »