Canada is the next country we look to as we examine nations that have eliminated their small-denomination coinage, just as the United States is doing with its one-cent coin. Much like Australia, New Zealand, and other European nations, Canada followed suit in their elimination of the cent in 2013.
The story repeats with many nations. Inflation had eroded the value of the cent, making the coin individually valueless. High production costs also played a factor in the matter, with each cent costing 1.6 cents to produce, plus transportation and distribution costs. In 2012, the federal government of Canada announced in its budget it would stop the distribution of the cent. May 4, 2012, the Royal Canadian Mint stopped minting cents for circulation. February 4, 2013, the cents stopped being distributed to financial institutions. Rounding was put into place for cash transactions.
The reaction was mostly positive for the elimination of the cent. A 2012 Ipsos-Reid poll found support about 63% from Canadians polled. In 2013 an Angus Reid survey found that 68% found it in favorable terms and only 18% were opposed. “It’s about time” sentiment was the term used by many for the ending of the cent, with some comparing it to the end of $1 and $2 notes. In 1987 Canada ceased printing of $1 notes and started withdrawing them from circulation in 1989, replacing them with the $1 coin or “Loonie.” While public outrage was higher for the end of the $1 note, it quickly faded and an estimated $300 million in savings to the government was seen over a decade since. The Canadian $2 note followed suit in 1995, with its printing ending and withdrawn starting in 1996. With the removal of the $2, the projected savings to the government was $450 million over 20 years.
The Canada cent, along with the phased-out currency, are still legal tender. The largest issue witnessed had to do with the nostalgia behind the Canadian cent. Thus, the Royal Canadian Mint has continued to make some cents after 2013 for special sets and commemorative issues but none for circulating legal tender.