http://cloudfront.bostinno.com/wp-content/uploads/2012/07/pennies.jpeg

One cent alongside five, ten, and twenty cents are the first series of coins produced by the province of Canada. The cost of minting a penny has been rising and the cost has always been an issue since the year it was first produced.

“Canadians became reluctant to carry pennies, hoarding them in jars and leaving them in convenience store take-a-penny trays.” (cit: canadian business) Since many of the pennies are withheld in Canadian’s hands, Royal Canadian Mint was forced to produce more pennies every year – around averagely 25 pennies per canadian. The cost for new production was too high and on March 29th Finance Minister Jim Flaherty announced that the end of penny production will end in the month of March.

Problems of businesses, due to stopping penny circulation, are described from the external blogpost – As the penny drop: what it means for your business. I agree with the blogger. He/she mentioned that although the pennies in the market now can be used indefinite, they will be removed from the circulation really soon. This causes the businesses to round up/down their prices. Rounding up and rounding down the prices will cause the companies to gain and lose a bit of profit respectively. Same goes to the customers. If the business rounds up prices, then customers will eventually need to pay more. The change of slowly withdrawing pennies will cause a hectic for the businesses in the markets – changing the prices or decide to round up/down.

Information From: http://canadabusiness.ca/eng/blog/entry/3943

http://www.canadianbusiness.com/article/79184–canadian-penny-proves-too-costly