Credit Cards Canada Urges the Goverment to Ditch the Penny

By Janet Hutchins on Feb 16, 2011 | Filed in Economy, News

Yesterday we delivered a brief to the Canadian Minister of Finance, Jim Flaherty, expressing our opinion that the penny ought to be abolished here in Canada. In December, the Senate Finance Committee decided to table a report about the penny and its decreasing value. Flaherty himself, according to CTV News, has called the penny a “nuisance.” Even though the government has yet to make a decision about the penny, momentum is building against it, and Credit Cards Canada agrees that the penny has outlived its usefulness.

The Penny Isn’t Worth Minting

The Bank of Canada has said that the penny has lost 95% of its value since its first minting in Canada, in 1908. The last century has not been kind to the penny, with inflation taking its toll. The Senate report found that every penny costs 1.5 cents to produce. It consts more to make a penny than it is worth! On top of that, the Desjardins Group points out that all the annoyance that comes with the penny, from production to transportation to storage, amounts to a cost of $130 million a year.

Not only is the penny too expensive to make, it is also frustrating for many businesses and consumers. Some don’t even feel the penny worth keeping! Plus, in a world where plastic is the preferred method of payment, whether in the form of credit cards or debit cards, the penny is obsolete. Other countries have already gotten rid of their one-cent pieces, including Australia, New Zealand and Sweden. New Zealand has even scrapped the nickel. No sense in dealing with such small denomination coins when they aren’t even worth the metal they’re minted with.

What Do You Think?

Since government officials haven’t decided what they want to do about the penny, you still have a chance to weigh in. You can contact the Finance Minister, or contact your representative.

Do you think we still need the penny? Or is it just a waste of resources?