Canada's Two Cents: The Penny Is Too Costly To Keep Making

After nearly 140 years (1876 - the first pennies were issued by the Dominion of Canada), Canada is saying goodbye to the coin. In the new budget, in a measure of thriftiness, the government announced that it's eliminating the penny from the coinage system. It costs 1.6 cents to make every penny and about $11 million annually to supply them to the economy. The Royal Canadian Mint will stop distributing them within the next six months. Beginning this fall, banks will begin collecting pennies from businesses and the copper will then be melted and the metal content recycled.

As far as paying for items whose amounts don't end in a zero or a five, this is how it will work:

"The government expects that businesses will apply rounding for cash transactions in a fair and transparent manner." The rounding will be done on the total bill of sale. If the price ends in a one, two, six, or seven it gets rounded down to 0 or 5; and rounded up if it ends in three, four, eight or nine.

Since 1908, when the first Canadian penny was produced in country in Ottawa (and not in England, as had previously been the case) the mint has crafted 35 billion pennies, half just in the last two decades.

Some final fun facts: the last copper penny was produced in 1996. The penny of the last decade has been made up mainly of steel, with some copper plating.

And if you've ever scrutinized a penny, you'll have seen the letters "KG" below the maple leaf. The initials stand for George Edward Kruger Gray, an English artist who created the maple leaf twig design in 1937. You can still find his design and initials on the nickel.