Ottawa, January 2, 2013
The Honourable Jim Flaherty, Minister of Finance, in partnership with the Royal Canadian Mint, today marked the start of a month-long countdown to February 4, 2013, the transition date for the phase-out of the penny.
“Throughout the next month, we will take advantage of every opportunity to remind consumers, businesses, financial institutions and charities that the supply of pennies will begin to diminish after February 4, when the Royal Canadian Mint ceases to distribute them,” said Minister Flaherty.
In early December, answers to frequently asked questions about the phase-out of the penny were released on the Department of Finance’s website so that businesses and consumers could begin preparing for this transition. A penny toolkit was also launched featuring information that retailers could download and display in their stores in advance of the transition date.
“These updated tools and materials provide clear information on how cash payments will be treated when pennies are not available,” added the Minister.
Building on this information, the coming weeks will feature several awareness-raising initiatives intended to help all Canadians adapt to an environment without the penny, including a dynamic social media campaign by the Royal Canadian Mint kicking off today, the 105th anniversary of the penny’s first strike.
"After producing the penny for Canada since the Mint opened in 1908, the last distribution of this iconic coin is a sentimental turning point in our history," said Ian E. Bennett, President and CEO of the Royal Canadian Mint. "The Mint continues to adapt to the changing needs of the marketplace and will fully support the Government of Canada and key stakeholders to ensure the successful phase out of the penny".
In addition, information will be made available at over 2,500 urban and rural Canada Post outlets and prominently displayed in Service Canada offices nationwide.
This cost-efficient campaign will help ensure Canadians across the country are informed of the February 4 date, while respecting the Harper Government’s goal of phasing out the penny due to high costs of production relative to face value. Given that the penny costs 1.6 cents to produce, the estimated ongoing savings for taxpayers from not making pennies is $11 million every year once fully implemented.
The phase-out of the penny, first announced in last year’s budget, will have no impact on cheque payments or electronic transactions. Moreover, the penny will retain its value indefinitely, and can continue to be used in cash transactions with businesses that choose to accept them.
For cash payments, businesses are expected to round the final amount - or equivalently, the change owed - of any cash payment in a fair, consistent and transparent manner. Experience in other countries that have phased out low-denomination coins has shown that fair rounding practices have been respected.
The Department of Finance will continue to work with key stakeholders in the coming weeks on all aspects related to the phase-out of the penny. Canadians can visit the Action Plan website or call 1 800 O-Canada (1-800-622-6232) (TTY: 1-800-926-9105) for more information.
Office of the Minister of Finance
Department of Finance