Thursday, December 20, 2012
Canada doesn't make cents any more
However, Canadian Press reports today that redeeming the six billion or so pennies presently in circulation will cost Canuck taxpayers about $7.3 million a year for the next six years. (That's about $7.4 million in "real money".)
Costs include $53 million expected to be paid out to redeem the face value of the coins, as well as another $27 million for the Mint's handling and administration costs. Recycling the zinc and copper from melted-down pennies will bring in about $42.5 million in revenue, leaving the government in the red by a tad over $38 million.
The good news is, when you add the $11 million in annual savings from not minting any more pennies, the government still saves almost $4 million per year over the expected six-year redemption period. Ah, the complexities of public finance.
But Walt has a suggestion for the Canadian government, or the US government, if they ever decide to follow the lead of the frugal frostbacks. [As if that will happen. The USA still has single dollar bills! Ed.] [Never mind. Do you want to hear this or not?! Walt]
OK, here's Walt's can't-miss cost recovery plan. Sell the old pennies to Zimbabwe! They use US dollars there -- each one worth almost, but not quite, a Canadian dollar -- but they have no coins because they can't afford to import any. So ship them the Canadian cents at, say, half their face value, plus S+H, plus HST, and they should fetch pretty close to C$50 million, which is $7.5 million more than the expected revenue from recycling.
Note to Jim Flaherty: You don't need to thank Walt publicly. Just send a cheque.