They jingle in our pockets and make a bulge in our wallets or coin purses – but there will come a time when the Canadian penny will be no more. Finance Minister Jim Flaherty announced last week in his 2012 budget speech the federal government would stop producing the coin many people refer to as a copper.
The reasoning behind the decision to quit the penny is, ironically enough, financial in nature. The government estimates the cost of producing a penny to be 1.6 cents, which equates to about $11 million for the 660 million pennies created each year. That’s a lot of dough for something that many of us flick away on sidewalks or save in old Mason jars.
It’s expected that merchants will round up or down to the nearest nickel when totalling cash transactions, which a federal study said would generally even out for consumers over the long run. And those of us who pay with such things debit or credit cards needn’t fret one bit, as these transactions aren’t expected to be affected by the rounding.
But wait. Let’s not have the penny’s demise be the main focus of budget talk. There are much more pressing items in the government’s proposed financial plan.
Perhaps the biggest issue affecting many Canadian citizens is changes to Old Age Security Guaranteed Income Supplement benefits. The government plans on raising the age citizens can avail of these benefits by two years.
Those born on or before March 31, 1958, won’t be affected, but citizens born after that date and before Jan. 31, 1962, will become eligible sometime between the ages 65 and 67. And those people born after Feb. 1, 1962, will have to be 67 before being able to collect the benefits.
This has to be really sour news for those people looking forward to retirement who will have two extra years of work before starting their golden years.
Other important matters included in the budget speech include the axing of upwards of 20,000 federal jobs over the next three years and multi-million dollar cuts to the Canadian Broadcasting Corporation’s annual budget.
Overall, the government plans on cutting around $5.2 billion in spending over the next three years. While it’s good that the feds are thinking about longterm economic sustainability, let’s just hope it doesn’t come at too much of a cost to the average hard-working Canadian.