Once again Canada is beating us to the punch. To be more exact, the Canadian government is phasing out the penny. The Royal Canadian Mint is going to stop distributing pennies next fall, but people can still use them as long as they like. It costs the Canadian government 1.6 cents to produce each penny, which is worth about the same as the U.S. penny, and Finance minister argues that “they take up far too much time for small business.” There is agreement on this between Canada’s Conservative Party government and the leftish New Democratic Party opposition, one of whose MPs announced he was going to dump his pennies in the fountain outside the Parliament building in Ottawa.
So why don’t we quit minting pennies here in the United States? Back when I was at U.S. News & World Report, I wrote a blogpost in January 2009 calling for an end to the penny. Later that month I wrote another, quoting Concord, Massachusetts, blogger Al Lewis, who called for retailers to round down purchases to the nearest nickel. Lewis reported that some local merchants adopted that policy, and argued further that the Obama administration could stop the minting of pennies by executive order. I have noticed lately that cashiers often effectively round down purchases by waving their hand when customers reach in and try to find the two or three pennies needed to reach the total. I have decided to skip pennies altogether, waving them off or flinging them dismissively into the tip jar. And when I get around to it, I’m going to take the several dozen pennies in my change plate to the bank and get a quarter or so for them.
By the way, the title of this blogpost was the headline Michael Kinsley came up with when someone asked him to write the most boring possible headline. But the Canadians have things to teach us. They avoided the mortgage-backed securities meltdown because their banks hold onto their mortgages. Canada has the right idea on the penny too.