OTTAWA - The federal government has given its two cents-worth on the penny - it's gone.
"We will eliminate the penny," said Finance Minister Jim Flaherty in his budget announcement. "Pennies take up too much space on our dressers at home. They take up for too much time for small businesses trying to grow and create jobs."
The Royal Canadian Mint says it costs 1.6 cents to produce a penny, so by fall it will stop issuing the coins.
The move is expected to save $11 million a year.
The Canadian Federation of Independent Business says pennies just don't make sense.
"Our members are very supportive of getting rid of the penny," said CFIB Catherine Swift. "Pennies, unfortunately, have become more of a pain than
Pennies will gradually be withdrawn from circulation, but consumers can continue to use them indefinitely.
When pennies aren't available for cash transactions, businesses will have to round the after-tax price to the nearest nickel.
Swift says that won't end up costing consumers more.
"In other jurisdictions that have done similar things ... it turns out to be a wash," said Swift.
Non-cash payments, by credit card or cheque for example, would still be charged to the exact cent.
The feds are also tinkering with the loonie and toonie to make them cheaper to produce.
The $1 and $2 coins will get the same treatment as lower value coins, getting steel cores that are electroplated to give them the right colour instead of using a metal alloy.