Canadian officials have decided to begin phasing out the penny as a step toward cutting costs in their country.
The Royal Canadian Mint has determined that the cost of making and distributing pennies to financial institutions actually exceeded the coin’s monetary value.
You have to wonder how long it might be before the U.S. takes this same step. In 2012, the U.S. Mint reported that each penny made “costs the federal government 2 cents.”
The estimated cost for making pennies in Canada was only 1.6 cents.
Canada’s decision to end the penny comes coupled with a plan to round prices up to “the nearest nickel for cash transactions.” This means Canadians will face increased costs of goods and services, but the Canadian government sees it as a way to pull in more revenue via sales taxes.