Ottawa, December 14, 2010 – Senator Joseph A. Day, Chair of the Standing Senate Committee on National Finance, tabled today the committee’s report on the costs and benefits to Canadian taxpayers and the overall Canadian economy of Canada’s one-cent coin.

Over the course of its study, the committee heard from a wide group of stakeholders including representatives of the federal government, financial institutions, consumer associations, the retail industry, charitable organizations, universities, collectors and foreign governments.

Senator Day said, “The testimony we heard was compelling. It is fair to say that this issue proved immeasurably more complex and more interesting than we had expected. We have concluded that removing the one-cent coin from circulation is long overdue. We urge the government to undertake this initiative in a consultative and deliberate manner and with due regard for the interests of all stakeholders.”

Senator Irving R. Gerstein, the sponsor of the motion that led to the study, stated, “The penny has simply outlived it purpose. It is a piece of currency, quite frankly,  that lacks currency.  In fact, a penny can’t even buy a penny anymore, and this is the heart of the issue.  It costs far more than a cent to produce and distribute each penny.”

Senator Richard R. Neufeld, deputy chair of the committee, noted, “If the government were to adopt the committee’s recommendations, it would be rather historic.  It would be the first time any piece of Canadian currency became no longer legal tender. But many other countries have eliminated their low-denomination coins with good results, and we’re convinced it would have good results in Canada as well.” 

In its report, the committee makes these recommendations:

1:  That Canada’s one-cent coin be removed from circulation.

2:  That the Government of Canada, in cooperation with the provinces and with the retail and service sectors, issue clear voluntary guidelines for rounding after-tax total purchase prices symmetrically to the nearest five cents.

3:  That price rounding be applied in cash transactions only.

4:  That production of the one-cent coin for circulation cease as soon as practicable, that the one-cent coin be removed from circulation starting 12 months thereafter, and that the calling-in period last an additional 12 months.

5:  That one-cent coins continue to be legal tender until the end of the 12-month calling-in period, so that Canadians may continue to use them in commercial transactions during that time.

6:  That the Bank of Canada continue to redeem one-cent coins indefinitely, and that financial institutions be allowed to choose whether, and for how long, they will continue to facilitate the return of one-cent coins to the Bank of Canada after the calling-in period ends.

7:  That the Government encourage charitable organizations to implement fundraising campaigns that would assist in the collection of one-cent coins for removal from circulation.

8:  That the Royal Canadian Mint be allowed to decide on the basis of profitability whether to continue limited production of the one-cent coin for direct sale to collectors.

To read the full report or learn more about the activities of the Standing Senate Committee on National Finance, please visit http://senate-senat.ca/fina-e.asp

For more information, please contact:

Francine Pressault
Media Relations
613-944-4075 or 1-800-267-7362 or 613 299-5359
pressf@sen.parl.gc.ca

Adam Thompson
Committee Clerk
613 990-6061 or 1 800-267-7362
thompa@sen.parl.gc.ca

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