Senate continues penny probe

[Copper Catcher]

OTTAWA — What about the boy who lugged $50 worth of pennies he'd saved to proudly drop into a Salvation Army donation kettle at Christmas?


Or the flustered man holding up a lineup at a till while he fished for a penny in his briefcase to pay for a muffin — $1.61 when tax is added?


Then there's the fact that you can't pop a penny in a bubble gum machine anymore and expect to get anything. Bubble gum costs a quarter these days.


Those are among the scenarios presented in recent days to the Senate finance committee during hearings on whether the Canadian penny should be eliminated.


"Canadians have a real affinity for their coinage," Darren Hannah, a vice-president of the Canadian Bankers Association, testified.


"Whether it is the lucky loonie at centre ice in the Olympics or the commemorative quarters, Canadians identify with their coinage as a symbol of what makes Canada great."


But the penny? Not so much.


"I do know, as a consumer, that if you are standing in a lineup and you have people in front of you groping for pennies trying to make that transaction, you get annoyed because they are slowing everything down," said Mel Fruitman, vice-president of the Consumers' Association of Canada. "As far as we can see, there is absolutely no downside to eliminating the penny. Unequivocally, please, let us eliminate the penny."


Ditto from Kim Lockie, president of the Canadian Automatic Merchandising Association. "No one in our industry uses pennies anymore," he said, referring to vending machines.


Sometimes members of his association volunteer to use their machines to sort pennies collected in charity drives, hauling them in half-tonne trucks. A ton of pennies is worth between $1,000 and $2,000, he said. It's barely worth the trouble, so he'd rather just cut the charity a cheque and pitch the pennies.


"Often pennies get sticky and foreign objects can come with them and do damage to our machines," Lockie testified.


There are an estimated 20 billion Canadian pennies out there, the senators have been told, with countless quantities piled up on dresser drawers, in yogurt tubs, quart jars and piggy banks.


When Michael Maidment's five-year-old son heard his dad say the Canadian penny may go the way of dodo, he worried aloud to his mom that "I won't have money for my piggy bank."


Maidment, an official from the Salvation Army, testified at the committee Tuesday about whether the absence of the penny would hurt the charity's iconic "Christmas kettle campaign" where people donate millions of dollars worth of coins to help the needy every year.


Maidment doesn't believe it would hurt, for the same reason he gave his son not to worry about his piggy bank: "There will be many other coins to fill his bank. The five-cent piece will still be there. I think the nickel will take over the penny spot if it in fact disappears."


Perhaps Maidment had not heard Lockie's testimony last week. Lockie said if the government is going to eliminate the penny, it should take the nickel out along with it.


"If you are thinking of eliminating one coin and if the public will get a little upset with one coin gone, might as well have both gone, in my opinion," Lockie said. Among other countries, New Zealand and Australia have eliminated their one-cent coins. New Zealand has also taken its five-cent coin out of circulation.


Senators are also trying to determine if the elimination of the penny would drive prices up or down as retailers would have to round off prices.


The Senate study on the fate of the penny — each one of which costs more than a cent to produce — was approved last spring and a report is expected by the end of the year.


It was proposed by Conservative senator Irving Gerstein who has not made up his mind, but did say at the time: "A penny cannot even buy a penny."


The banking industry does not have a strong view one way or the other on ditching the penny at this stage, Hannah said.

Source: http://www.canada.com/Senate+continues+ ... story.html

[Ardent Listener]

Why doesn't the Senate just pass a bill that would allow the U.S. mint to issue a series of base metal coins with face values from $5.00 - $100.00? With the profits made on such coins they could off-set any loss for the penny and nickel.

Truth is that it's not the fact that the penny costs too much to mint. With the government buying $1000 toilet seats we know that can't be the case. The real reason they want to get rid of the penny is that it is a reminder how far inflation has eaten our dollar. Soon they will want to dump the quarter too for that very same reason.