OTTAWA Canada will no longer circulate the one-cent coin as of February 4, 2013, finance minister Jim Flaherty announced.
In his 2012 federal budget delivered in March, Flaherty said the Royal Canadian Mint would stop distributing the coins, worth 1/100th of a Canadian dollar ($0.9983), this fall, since it costs 1.6 cents to produce each cent coin, or Canadian $11 million annually.
Ottawa delayed the move to a penny-less marketplace after small business and retailers requested the transition date to be after the Christmas holiday shopping season, which would enable charities to hold penny drive campaigns to collect the coins before they’re out of circulation.
A slight increase in demand for higher-denomination coins, such as the five-cent nickel, 10-cent dime and 25-cent quarter, resulting in a rise in net-coinage revenues, is expected.
Dropping the one-cent penny will result in environmental benefits as there will be reduction in use of base metals in the production process and metals from pennies will be recycled.
