February 4 of this year marked the date at which time the country starts saying good-bye to the nation's lowest-value coin. While you can continue to use the Canadian penny indefinitely, within time this coin will become more and more scarce. Here, from the federal government, are answers to the most frequently asked questions about the process:
Q: Why is the penny being phased out?
A: Inflation is a big factor; a penny doesn't buy what it used to. The penny is now worth about one-twentieth of its original value back in 1908. In fact, each penny now costs more than 1.6 cents to make. Other issues as well, such as the increased accumulation of pennies in the household, environmental considerations, and the significant handling costs the penny imposes on retailers, financial institutions and the economy in general, are motivation for the penny's phase out Once it's fully phased out of circulation, the federal government estimates ongoing savings to the taxpayer of $11 million a year.
Q: May I still use pennies when shopping?
A: Yes. You can use it for cash transactions with businesses that choose to accept them. Businesses have guidelines in place to return pennies to their local financial institution.
Q: Will they be rounding all their prices?
A: No. Rounding only affects the change due to you with cash transactions if pennies are not available. If using cash for the item or service, the total may be rounded either up or down to the nearest five-cent increment. If using a credit card, debit card, or cheque for goods and services, the exact values remain and the exact value is charged. Business owners will be assisted with a federal government guideline to ensure rounding is done in a fair and transparent manner.
Q: Will financial institutions accept my pennies?
A: Yes. Some financial institutions may require large amounts of pennies to be rolled or wrapped for deposit. Canadians might also consider donating them to a favourite charity.
Q: How long do I have to turn in my pennies?
A: There is no time limit since you can always use pennies where they are accepted.
Additional information is available online at actionplan.gc.ca/penny.
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