“Look after the pennies, and the pennies will look after the pounds” – traditional English proverb
This month, the Royal Canadian Mint in Winnipeg, Manitoba state, will mint the last of Canada’s one-cent coins or ‘pennies’. Rapidly-rising costs of metal and production at the mint mean that it now costs 1.5 cents to produce each coin, so they are now a loss-making initiative. Inflation of the Canadian dollar has rendered the 1-cent nearly worthless and businesses and consumers do not see any point in the penny any longer. After a hundred years of history, the very last one-cent coin came off the press on the 4th of May, 2012, and was subsequently donated as a display piece for the Bank of Canada’s currency museum. Up till then, the Mint manufactured 7,000 tonnes of cents every year. The national treasury estimates it will save $11 million a year scrapping the penny.
The smallest value coin currently in circulation, the 1-cent piece is distinctive. Made from copper-plated steel for economic reasons, the money depicts a set of maple leaves on the front and the Queen’s head on the back. Designed by GE Kruger Gray, the Canadian cent is nearly the same as its cousin in the US dollar, as are the currency’s other denominations. Introduced in 1858, the penny was intended to bring order to the monetary system, which at that time consisted of British colonial coins, bank tokens, US dollars and Spanish pieces-of-eight. The first coins were much larger than they are now, and were distrusted by the public because of their relatively light weight and novelty. The penny did however spread all over Canada after the unity of its component states, or ‘Confederation’ in 1867.
Metal markets made things difficult for the humble coin. In 1920, the ‘large cents’ gave way to smaller versions as the price of copper shot through the roof. Then pure copper cents were supplanted by debased versions, simply a sandwich of zinc or steel encased in the red metal; a process also repeated in other world currencies as intrinsic prices made metal an expensive medium. They remained (and technically still are) legal tender.
By 2010, the Canadian government set up a report deciding the future of the penny, which was fast becoming useless. Only 37% of the population used pennies on a regular basis, most coins ending up stuffed in piggy banks or jars, or lost down the backs of sofas. People saw the extra pennies as deadweight in their wallets/purses. The Mint was still pressing 816 million pennies per year, equal to 25 per Canadian. The Senate subsequently recommended the penny be dropped.
PENNIES FOR YOUR THOUGHTS:
- In the French-speaking province of Quebec, 1-cent coins are known as ‘sou’ from an old French currency. Also referred to as ‘cenne noir’ (black penny).
- While both the Canada and U.S. cents are traditionally round, from the years 1982-1996, the Canadian version has twelve sides to enable recognition by users with partial or no sight.
- A cent from 1936, with a distinctive dot mintmark, were actually manufactured the following year, as the RCM was waiting for new dies (coin presses) due to the abdication of King Edward VIII. One fetched $400,000 at a 2010 collector’s auction.
- The exact metal composition of a 1-cent piece is as follows: 94% steel, 1.5% nickel and only 4.5% copper.
- Canadian cents often are used unofficially in neighbouring America, which has similar coinage. Toll booth operators see them as a pain. Interestingly enough, both country’s coins are also the bane of British shopkeepers, as they frequently turn up in small change in the UK.
- Coins are highly susceptible to currency inflation. Many nations had even completely done away with small change, such as Vietnam, and rely solely on banknotes.