In Canada, find a penny, recycle it

http://www.pbs.org/newshour/updates/penny-wise/

31 42 12 years ago

"estimated 31 billion pennies that are still in circulation"

"The Finance Department of Canada estimates that melting down the metal from the pennies and reselling it in the industrial sector will bring in $42.5 million in revenue."

So, they're going to buy $310m worth of pennies, melt them down, and sell them for $42.5m? That doesn't seem like a worthwhile exercise.

paulgb• 12 years ago

Well, if they take $310 million in currency out of circulation, they can mint (say) 310 million loonies without devaluing the currency. So if the metal in 100 pennies is worth more than the metal in a loonie they make a profit.

NortySpock• 12 years ago

They'll save money in the long run in not printing the pennies at a loss.

Also, by buying them back from the banks it's the government that takes the hit for the cost of de-circulating the penny, rather than the banks or the consumer. If private industry were taking the hit, people would fight tooth and nail against retiring the penny.

rahimnathwani5• 12 years ago

I understand that it might make sense to stop printing new pennies, but how does the central bank benefit by taking the _existing_ pennies out of circulation, assuming the scrap value of the metal is less than the pennies' face value?

(If the scrap value were higher than the face value, presumably the private sector would take the pennies out of circulation, and no government action would be required.)

JacobAldridge2• 12 years ago

I don't think they're buying them back, just re-circulating the currency in larger denominations.

rahimnathwani5• 12 years ago

Re-circulating the currency in larger denominations is the same as buying them back. In order for them to take 100 pennies out of circulation, they must compensate the owner with a dollar bill/coin (i.e. a larger denomination) or a dollar of bank credit.

eli3• 12 years ago

Well, they already decided to kill the penny. Might as well resell the raw metal rather than putting it in a landfill.

lstamour4• 12 years ago

You missed two key facts: 1. They can't recover all the pennies, so the recovery estimate takes that into account. 2. The Mint already made the pennies, there's no need to buy them, just collect during the usual distributions to banks, and process them after.

aarkling• 12 years ago

Maybe they meant $42.5 million in profit?

JacobAldridge2• 12 years ago

Good luck finding the 31 billion pennies still out there! Here in Australia we farewelled the 1 and 2 cent coins in the mid 1990s - I've moved house several times since then, and still find the occasional coin somewhere. And that doesn't even account for the hoards that have been tossed away as worthless.

My only regret is that future generations won't understand why we ask police officers "What's the colour of a 2 cent piece?"

maaku2• 12 years ago

Why do you ask police officers "What's the colour of a 2 cent piece?"

mig39• 12 years ago

Copper?

lstamour4• 12 years ago

It's a song/chant marginally popular in Australia apparently? http://theroarforum.com/index.php?topic=2868.0

People sing it to Camptown Races. It's stuck in my head now. A variant answer is "dirty copper".

RossM• 12 years ago

Forgive my ignorance, but doesn't there need to be a minimum-value coin in circulation to facilitate transactions? For example, I go to a shop and buy something for £4.99 and pay with a £5.00 note - do I get any change in return?

YokoZar• 12 years ago

This is handled by rounding. In the US many businesses already opt out of pennies and just round things down to the nearest 5 cents. It's just an extension of the rounding they already do (for instance when an 8.5% sales tax is added to a 1 dollar purchase, the half cent will be rounded even when the business uses the penny).

Interesting historical note is that when the US half penny was removed from circulation due to it being nearly useless, it was worth approximately 8 cents in today's money.

kps• 12 years ago

It depends. In Canada, legally, cash transactions may be rounded to the nearest 5 cents, so you wouldn't get change. In practice, many merchants round down, so you'd get 5 cents change.

nandhp• 12 years ago

Most places that have abolished low-denomination coins use Swedish rounding (or at least that's what Wikipedia calls it): when paying with cash, round to the nearest (sometimes this will be up, sometimes down) payable price.

https://en.wikipedia.org/wiki/Swedish_rounding

dobbsbob• 12 years ago

Well there's GST+PST added in Canada depending on province so that $4.99 item would probably cost $5.58 then they round the price since the penny is gone, so $5.58 would be $5.60

Retailers are supposed to round up/down depending on amount but you will quickly find that everybody is rounding up unless you say something.

raverbashing• 12 years ago

In Canada, no. Every transaction is rounded to 5 cents, so in your case, no change

If it was 4.97 it would go for 4.95 though

lstamour4• 12 years ago

Unless you pay by credit in which case it's exact.

As to how it works, unlike VAT added into the price, we've HST (varies ~13%) or GST (5%) to round up or down by a few pennies on top of the stated price. I'm a bit surprised this is news. It's been well over a year.

dhughes• 12 years ago

If you pay in cash it gets rounded up or down e.g. $1.03 becomes $1.05 if it's $1.02 it's $1.00 but if you pay via debit card or credit card it doesn't change.

Here is the government's explanation http://www.cra-arc.gc.ca/gncy/lmntnpnny/menu-eng.html

vacri3• 12 years ago

You are clearly too young to recall the Half New Penny piece. I visited the UK in '84 as a young'un, and recall the half-penny being useless, since you had to have two of them together to purchased the cheapest things (at a penny). Before decimalisation, what was the previous smallest coin? The farthing was pretty common, but at one stage it got down to the quarter-farthing (roughly one-four-thousandths of a pound sterling). We also see it in modern currencies, as Bitcoin gets traded in smaller and smaller amounts.

Ultimately, the smallest useful transaction is the smallest value you need a coin (or token) for. Here in Australia, we abolished our 1c and 2c pieces decades ago, and apart from very temporary hand-wringing from some quarters, it's never been an issue. People just weren't purchasing things with a value of 1c and 2c, and getting that in change meant that you had to collect a bunch of them in order to purchase something else.

http://en.wikipedia.org/wiki/Halfpenny_%28British_decimal_co...

CountHackulus• 12 years ago

You already round to the nearest penny on your transactions, rounding to the nearest 5c isn't that much different. Especially when it only applies to cash transactions.

Ellipsis753• 12 years ago

Interesting. I wonder if anyone will fill empty warehouses with them and just sit tight and wait until they're no longer considered currency and so can be melted down (legally)?

cjfont• 12 years ago

steel pennies will be drawn to magnets whereas the zinc and copper pennies will float.

Float on water?

adrianN• 12 years ago

It works with aluminium, if you're careful

https://www.youtube.com/watch?v=kJlRnCed0bY

city41• 12 years ago

It said "and water tables composed of different chemicals" -- they will create a density that causes zinc and copper to float but not steel.

zAy0LfpBZLC8mAC2• 12 years ago

Which is somewhat nonsensical, of course - they can already separate out the steel pennies magnetically, and it would be pretty pointless to have all of the remaining pennies after that separation step float. If anything, they'll have the less dense non-steel float and the denser non-steel sink.

hippich• 12 years ago

I am not getting why they are doing it at all? Why not let existing pennies to exist?

They mentioned it costs 1.6c to create 1p coin, but it costs 0.0c to keep existing 1p coins...

sdrothrock• 12 years ago

It's right in the title: recycling. They get the materials out of pennies that nobody can use anymore.

Naga• 12 years ago

They are still legal tender actually, and stores still accept them. They are just uncommon now.

lstamour4• 12 years ago

Because they can make money off the pennies by recycling them, it costs them the metal worth of the pennies they choose not to recycle. There are also productivity benefits if people don't have to count pennies during transactions. And it's a highly visible action the federal government can take to show it still exists to people who don't read newspapers (like me). I'm sure there are other reasons, but pinning the penny as a "drag on the economy," probably tops the list after the obvious, "I pay taxes to keep the penny in circulation? Why didn't they recycle it?"

vacri3• 12 years ago

Small denominations also cost more to handle, for vendors, banks, any one that handles cash, really.

peeters• 12 years ago

Besides the opportunity cost of not reclaiming pennies for recycling, another issue is that pennies, more so than any other denomination, fall out of circulation quickly. That's because people don't tend to keep them in their pocket like most loose change; they end up in a jar somewhere.

So by deciding not to mint new coins, you're still signing the penny's death warrant. But you condemn it to a slow, messy death. Stores gradually aren't able to acquire the pennies they need to make change on purchases, as the existing coins fall out of circulation. Eventually the day comes where you need to change the way cash transactions work, because it makes no practical sense to consider the penny a currency. So why delay?

Instead, the government flipped the off switch and gave the penny a quick death. Of course, Canadians can still take their pennies to the bank and trade up for a valid denomination.

In Canada, find a penny, recycle it

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