Canada penniless as it marks coin’s end

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04:39 AM May 5th, 2012

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May 5th, 2012 04:39 AM

Finance Minister Jim Flaherty holds the last penny struck in Canada at the Royal Canadian Mint in Winnipeg, Manitoba, Friday, May 4, 2012. Flaherty announced in the March budget that the coin would no longer be produced because the cost of making it is more than it's worth. He has estimated that the government will save $11 million a year. AP/The Canadian Press, John Woods

OTTAWA – Canada’s last penny was struck Friday at The Royal Canadian Mint’s manufacturing facility and will become a museum piece as the one-cent coins are withdrawn from circulation.

“For over a hundred years, the penny played an important role in Canada’s coinage system,” said Finance Minister Jim Flaherty.

“Although the cost of producing the penny now outweighs its value to Canadian consumers and businesses, it has had a long history that is worthy of recognition.”

The last penny struck for Canadian circulation will be entrusted to the Currency Museum of the Bank of Canada in Ottawa, he said.

Flaherty announced in March the end of the penny, saying it would save the Treasury $11 million per year in manufacturing and distribution costs, as the government looks to trim its budget deficit.

Due to rising labor, metal and other manufacturing and distribution costs, each penny cost more than 1.6 cents to produce.

The penny will retain its value indefinitely and can continue to be used in payments, but as the coins are gradually removed from circulation, cash transactions will have to be rounded to the nearest five-cent increment.

Over the past five years, the Mint’s plant in Winnipeg, Manitoba, produced 7,000 tons of pennies annually.

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