Canada considers dropping its penny
A Canadian penny.
TEXT OF STORY
STEVE CHIOTAKIS: It costs more than a penny to make and distribute a penny. Still, Congressional efforts to scrap the one-cent coin have failed so far. Canada's tackled the same issue for years. And now the Canadian Senate Finance Committee may scrap the coins.
Marketplace's Sean Cole explains.
Sean Cole: After extensive hearings over the last year and a lofty statement from deputy chairman Irving Gerstein:
Irving Gerstein: Many scholars and commentators have suggested that the penny's in fact a piece of currency that lacks currency.
The Canadian Senate Finance Committee finally released a report saying the penny should be "called-in." The majority of Canadians are sick of it, it's cumbersome, and it costs a penny and half to get one into my hand. Still, the mint makes half a billion of them a year.
Gerstein: We have 20 billion pennies in circulation.
Which laid end-to-end would stretch...
Gerstein: More than nine and a half times around the equator.
So let's stop minting pennies, stop circulating them a year later, and then two years later, retailers stop accepting them. That's the gist of the report. You could still redeem them at the Bank of Canada forever.
Joseph Day: I see them on the ground; I'll pick up a penny.
Cole: You will?
Day: I will.
Cole: How ironic.
Senator Joseph Day is chairman of the Finance Committee.
Day: It's still legal tender.
Cole: Yeah, until you're done with it!
I asked him what happens to all of the pennies after everyone cashes them in.
Day: The banks send them back to the mint and the mint will melt them down again and sell that metal off.
Cole: Sell it back to America so that they can make American pennies out of it.
Day: I think America's not far behind Canada.
Cole: Dude, I don't know about that.
Yes, I called a Canadian senator "dude." Because America's been rolling out four new designs of the Lincoln penny for Honest Abe's 2009 bicentennial.
Steve Woodland: The Royal Canadian Mint hasn't done that with the Canadian coin. We have seen 90 years of the same design.
Steve Woodland is with the Royal Canadian Numismatic Association. Numismatics?
Wooodland: The study of the art and science of money.
He testified before the committee last year, saying he hopes the mint will still make a bunch of one-cent coins every year to sell to collectors.
Woodland: If they don't do that, it's not the end of the world. There will be something else to collect. You switch from the one-cent coin to the five-cent coin to whatever.
But all of this is assuming Canada's finance minister puts the report into practice. His office would only say he's still reviewing it.
In Toronto, I'm Sean Cole for Marketplace.