It is a sad day in Canada. As of today our iconic coin, the penny, is no more.
Last spring the finance announced the demise of the penny when he introduced the budget.It took effect today.
“Pennies take up too much space on our dressers at home,” Mr. Flaherty told the House of Commons. “They take up far too much time for small businesses trying to grow and create jobs.”
The government estimated that every penny costs it about 1.6 cents to produce. Eliminating the penny’s production will reduce the government’s costs by about 11 million Canadian dollars a year.
This brings up my rant.
I am not enamoured with the penny. I just hate the way the goverment cuts things out because they deem it to be too expensive. Generally these cost savings for the government don't result in money freed up for other services we want. Instead we end up paying more for things that used to be covered by the government and the government spends the money on whatever it deems to be critical . . . like spending $1,000,000 to ship the Prime Minister's SUV to India for his visit last year, or & 750,000 for the Minister of Defense to use a military plane to fly to a fishing camp, or the former Minister of International Development to drink $ 26 freshly squeezed OJ whilst at meetings in London.
I am also annoyed by the argument given - "They take up far too much time for small businesses trying to grow and create jobs.”
What pure, unadulterated crap!
Businesses are failing because cashiers are taking too long to count out change?
I seem to have missed the headlines about all of those businesses failing!
If anything a few cashiers might lose their jobs since they are no longer needed to provide change but the number would be so minuscule that it would hardly count.
Unfortunately people buy this nonsence: Costs savings - businesses save money - good for the the economy. MMM Good
We know what happens. When businesses save money they don't often expand and set up other businesses. More often than not the owners sock the money away in an effort to avoid paying taxes on it. The rich get richer and the rest of us just pay more and make do with less.
Recently it was reported that Canadian businesses were sitting on a mountain of cash - 500 billion dollars is a big mountain! This doesn't include the money in all of those off-shore accounts.
But back to the penny. The suggestion was that one would save money on some transactions since rounding would be involved. If something cost $ 1.04 it would now cost me $ 1.05. but wait - if something cost 1.02 it would be rounded down to $1.00 and I would save 2 cents.
That will help pay for my next bottle of wine needed to deaden the pain . . .
Simple math shows the fallacy of that argument - rounding up will happen more than rounding down. Consumers will pay more; in a sense a hidden tax.
Plus, I would hazard to guess that most business will adjust their prices so that individual cashiers aren't left trying to figure out 'do I round up or do I round down and where do I round to?' I used to teach rounding and can attest to the fact that this is a complex concept for some!
Again, the business owners bring in more money, the government saves money, and we pay.