Canada: A penny-eliminating "trail-blazer"
Canada's move to do away with the penny has sparked a similar debate in the United States. In the cash-strapped U.S., it costs even more than it does in Canada to produce the penny -- 2.4 cents for every coin. THE CANADIAN PRESS/Ryan Remiorz
WASHINGTON - News that Canada is doing away with the penny has renewed debate in the United States about whether it's time to rid itself, too, of a piece of currency once described by an esteemed American publication as "horrid and useless."
Canada came in for high praise Friday from a U.S. advocacy group called Citizens for Retiring the Penny, with its motto "Isn't it annoying?"
"If Canada can do it, why can't we?" asked Aaron R. Priven on the group's Facebook page.
"Bravo!" added another. "Canada has done the right thing. Hopefully the U.S. will soon follow."
The idea of eliminating the penny, stamped with the noble profile of revered former president Abraham Lincoln, has been a topic of debate for years in the United States, where it costs 2.4 cents to produce the coin.
"Why do pennies exist?" writer David Owen asked in a New Yorker piece in 2008 that called for the coin's elimination and lauded Canada for taking a modern approach to eliminating bothersome pieces of currency, including one- and two-dollar bills.
On Friday, he had nothing but praise for Canada for once again taking the leap.
"Canada is and has been a trail-blazer, and was out early on a number of fronts, including eliminating the one-dollar bill, switching to different, cheaper metals — things that Americans have been reluctant to do," Owen said in an interview.
"I don't know if Americans will ever come around on it. There's a sentimental attachment to the penny .... We probably won't be done with them until we're done using cash in general, when people start using their phones to pay for things."
The Obama administration has toyed with the idea of using cheaper materials to make both the penny and the nickel. Currently, the penny is composed chiefly of zinc with a thin copper coating.
Barack Obama went much further when he was campaigning for president four years ago.
"We have been trying to eliminate the penny for quite some time — it always comes back," Obama said. "I need to find out who is lobbying to keep the penny."
The debate even earned its way into an episode of the political TV drama "The West Wing" in 2001, when Sam Seaborn, the character played by Rob Lowe, took up the cause.
The only coin-operated machines that accept pennies anymore, Seaborn said, are "those coin-wrapping machines people buy to get rid of pennies."
But in a country with a passion for its historical artifacts, eliminating the coins outright is considered a political hot potato.
Two separate bills calling for the demise of the penny, tabled in 2002 and 2006 by Republican congressman Jim Kolbe, failed to advance in the House of Representatives.
The American zinc lobby has been a major opponent to any suggestions that the penny be eliminated, just as nickel lobbyists have fought efforts by the U.S. Treasury for years to remove nickel from the nickel. Another advocacy group, this one called Americans for Common Cents, passionately defends the penny.
"Eliminating the penny is a losing proposition because it will result in rounding to the nearest nickel and higher prices for America's working families," a statement on the group's website reads.
"This increased cost to consumers will be felt in everything from the grocery store to the gas pump. Pennies add up to millions of dollars every year for charities across the country. Simply put, the penny plays an important role in our everyday lives and in our nation's economy."
Owen scoffed at one of those arguments.
"This idea that you'll be ripped off by merchants somehow, that they'll charge a few cents more without the penny — it's not the case. Most merchants are happy to round in your favour; they just don't want to deal with the penny anymore."
But he acknowledges Americans have diehard attachments to pieces of currency other countries have long since done away with, noting the lack of love given to the America's version of the loonie.
"One problem here, in addition to the fact that some Americans think dollar coins are a Commie plot, is that they're so close in size to quarters. So they're not widely in circulation, and when people get them, they tend to hold onto them as though they're collectors items," he said.
"There just doesn't seem to be a rational response to currency changes in this country like you see in other places."
MSN.ca Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.
How long does it take you to completely unpack after moving in?
Thanks for being one of the first people to vote. Results will be available soon. Check for results
- 3 days – I'm an unpacking MACHINE!
- I need a full month just to figure out where to put everything!
- 3 months – I use the boxes as end tables!
- NEVER! I still haven't unpacked everything from the last move.