Canada serves as a useful laboratory for testing innovative policies that eventually make their way south and are adopted in the Unites States. Legalized gay marriage, open-service military and universal health care are all current policies whose success in Canada has helped to support a strong push for acceptance south of the border.
It will be interesting to see if (or when) America is ready to adopt Canada’s next bit of sensible fiscal policy.
A non-binding Senate commission is expected to recommend before the end of 2010 that Canada abolish the penny. This issue has been under discussion in Canada for years and has gained momentum based on the success of similar moves in New Zealand and Australia. Both countries abolished their penny almost 20 years ago with none of the problems that opponents had predicted. An additional factor pushing Canada toward a penniless society is that fact that a penny now costs 1.5 cents to produce, making it more costly than its face value.
Australia and New Zealand still frequently use retail prices with 1 cent increments but round off to the nearest nickel, and the same procedure will likely be used in Canada. The abolition of the penny is a popular idea on Canada, and almost certain to pass though parliament after the Senate makes its final recommendation.
The difference in small currency in Canada and the United States becomes quite obvious when you spend time in both countries. Canada no longer makes dollar bills, instead using a gold-tone dollar coin called the “loonie” in reference to the image of a northern loon on the obverse. The loonie was first introduced in 1987, followed by the “toonie” (a two-dollar coin) in 1996. The Canadian mint says each coin costs about 16 cents to mint and lasts an average of 20 years. Paper currency cots 6 cents per bill and has a lifespan of 1 year.
The toonie has always been popular but the loonie was strongly disliked by the public at first. People complained they already had enough change in their pockets, and thought the loonie would be inconvenient and bulky. That feeling has completely changed and Canadians now love their loonie. It is convenient for use in vending machines, at the car wash and the parkade, and greatly reduces the bulk in people’s wallets. Ten one-dollar bills form a substantial wad in a billfold, while ten loonies can get lost in the bottom of a pocket.
In fact, most people find the lack of bulk one of the major charms of their loonies and toonies. A brief search through your jacket pockets, your change purse and the coin dish in the kitchen can come up with forty or fifty dollars you didn’t even know you had…and that’s always a nice surprise. It’s good to find you’re richer than you thought.
Once Canadians are finally penniless, they’re going to feel even richer.