yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

Canada Gets Rid of the Penny (Huzzah!)


3m read
·Nov 7, 2024

Hello Internet,

I want to talk about Canada, who this week made my reason-to-like her list one item longer by deciding to abolish the penny. Since I previously made a video called 'Death to Pennies,' it should come as no surprise that this move gets a big 'Go Canada!' from me.

So let's take a moment to cheer Canada for her economic rationalism, look at how getting rid of a coin works in practice, and remind her sister to the South why she might want to do the same. Canada's plan is pretty simple: in a couple of months, the Royal Canadian Mint will switch the penny-making machine from on to off. That's it. Pretty much nothing else in the world is going to change.

Pennies will still be legal tender in Canada, so that jar of several hundred that you'll never bother to count will always be worth just as much as it is today. And in shops, there will still be that person who pays with exact change. But after they've tediously counted out their precious (worthless) pennies, the shop will send them back to the Royal Canadian Mint to be melted down.

Thus, the supply of pennies will slowly decrease over time in a pleasant half-life curve. But, while the penny will functionally go away, prices listed in one-cent intervals will not. Your coffee and TimBits will still cost the same, and when you get to the cash register, the total amount after tax will still have single cents. And if you pay by card, that exact amount will be deducted from your account.

The only difference is if you pay in cash, not card, and you don't have any pennies with which to waste everyone else's time, then the price will be rounded to the nearest five cents. And yes, in rounding, sometimes you win and sometimes you lose, but -- and this is the rather salient point -- either way, a one or two cent difference isn't worth caring about. Which is why Canada can safely jettison the penny in the first place.

Inevitably, though, this is the point in the discussion when pro-penny people propose that ditching the worthless coin will make prices go up and your savings go down. But the evidence for this claim is nonexistent because many countries have done this before with no ill effect. Sure, coin collectors and inefficiency fans will be sad to see the penny go, but overall, it's a big win for Canada because printing money isn't free.

The cost to make a one-cent penny is 1.6 cents. So every year when Canada visited the mint, she spent 29 million dollars to buy 18 million dollars worth of pennies -- effectively throwing away 11 million dollars a year. Now, obviously, ditching pennies won't single-handedly balance the budget, but it's the easiest, most rational place to start. Congratulations, Canada! May others follow in your path.

P.S. If you want to know more about why the United States, in particular, should get rid of pennies, you can either watch my video on the topic or listen to fellow penny-hater John Green get arm-wavingly angry about not only pennies, but also nickels, which are even worse.

Also, there should be a new main video up in the next week or two, but if you want to help me make them faster, you can go here on my website to help out with the fact-checking for upcoming projects.

Thanks for watching.

More Articles

View All
The Case of the Early Bird | Teacher Resources | Financial Literacy | Khan Academy
The name’s Duction, Detective Duction. I’m a private eye, and my eye is pointed straight at Monetary Mysteries. Love them! Financial Tom Foolery, dollar double dealing—that’s my wheelhouse, and no mistake. There’s one case I keep coming back to, turning …
Density Curves | Modeling data distributions | AP Statistics | Khan Academy
What we’re going to do in this video is think about how to visualize distributions of data, then to analyze those visualizations, and we will eventually get to something known as a density curve. But let’s start with a simple example just to review some c…
The Auto Market Bubble Just Popped
What’s up, Graham? It’s guys here, and it’s official: the auto market bubble has popped. Despite used car values previously outpacing that of housing, fine art, and the stock market, they’ve now just seen their largest decline in a decade. Electric vehicl…
A Park Reborn: Charging Elephants | Nat Geo Live
( intro music ) There used to be more than 4,000 elephants in the greater Gorongosa area. And during the war, most of those elephants were killed. Hungry soldiers ate their meat. And traded their ivory for guns and ammunition. When it was all over there w…
How to break social media addiction and actually start living
When you’re on the bus, waiting at the queue, or simply walking down the street, do you often find yourself taking up your phone? Constantly looking at your phone will prevent you from being aware of what’s happening around you, and this is not only physi…
The Three Forms of Leverage
There are three broad classes of Leverage. One form of Leverage is going to be labor, which is the oldest form of Leverage—other humans working for you. That’s actually not a great one in the modern world. It used to be great in the old world, but in the …