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Canada ditches the penny
- kitcar 14y agoI wonder how this will affect sales taxation, as the tax rate isn't a multiple of 5 in all provinces, and hence the amount of tax collected on a purchase will have to be either be rounded down or up.
- msbarnett 14y ago"If the customer has the pennies, they can use them. Payments with debit or credit cards, or cheques, can also be to the penny. But if the customer is paying cash and doesn't have the pennies, the total will go up or down to the nearest nickel." I gather that's post application of sales tax.
- mindslight 14y agoPresuming a uniform distribution of price endings, existing pennies are then worth 1.43 cents (you only spend them when the price is congruent to (0.03 or 0.04) mod 0.05).
- mmastrac 14y agoThis line-item is basically a smokescreen for cutting all sorts of other important things (like the research tax credit, SR&ED; various social programs; the budget for our national broadcaster, the CBC; and the salary of the Chief Electoral Officer): http://www.reddit.com/r/canada/comments/rjrfn/the_budget_5_billion_in_cuts_over_3_years_and/ http://www.reddit.com/r/canada/comments/rjrfn/the_budget_5_b... Amusingly this particular cut was actually a private member proposal from the NDP (the left-most mainstream party).
- dfc 14y agoI'm not very familiar with canadian politics. Why is it amusing that the NDP proposed this?
- mhyee 14y agoThe party that implemented this is the Conservative party, the right-most mainstream party. The two parties generally don't see eye to eye, to put it lightly.
- dhughes 14y agoThe Conservative party was decimated years ago and was nearly eliminated then eventually the Reform Party which became the Canadian Alliance merged into the Conservative party (both parties were dead anyway). Reformers were certainly farther right compared to the members of the old Conservative party. Now there is a Conservative party it's the same skin on the outside but fundamentally different, it couldn't be more different, it's pretty much the Reform Party 2.0 yet people see "Conservative Party" and vote for it. That's my take on it anyway.
- redthrowaway 14y agoThis isn't the Canadian Budget; it's the budget proposed by the ruling Conservatives. This item will likely generate the most buzz and goodwill for the budget, and it was proposed by the current Opposition NDP, who are socialists. So, the greatest PR windfall for the Conservatives will have come from their biggest ideological and political opponents. It's mildly entertaining. That said, as the Conservatives have a majority (>50% of seats in the House of Commons), there's no chance that the budget would fail, triggering a vote of non-confidence and a general election. So it wasn't a vote that had any real importance politically, but it will serve to generate public goodwill, which they could use. The Conservatives currently only have a majority because of the ineptitude of the Liberals and Quebecers' fatigue with the Bloc Quebecois. Most Canadians are to the left of the Conservatives, have only warily entrusted them with power, and only then because the center-left liberals couldn't get their shit together at election time.
- dhughes 14y agoIt's difficult finding a comparison since the US only has a two-party system. Maybe an example something like Ralph Nader suggesting something and Nixon doing it. Or more modern George W Bush following the advice of Jon Stewart. Anyway (the far?) right agreeing with the left is odd.
- huggyface 14y agoSay that it's a "smoke screen" is needlessly partisan. It is, indeed, a line item. It deals with something that has come up for consideration since the 80s. If it gets attention, it gets attention. But do you think no one notices the other changes because they're ditching the penny? That is preposterous.
- yay_cloud 14y agoIt might be construed as a partisan comment, but that is exactly how politics works. After working on a few campaigns (and leaving in disgust), a politician or party will gladly pocket an easy but visible decision like this in order to "steal eyes" away from other -- less positive -- changes or events.
- maratd 14y ago> "steal eyes" away from other -- less positive -- changes or events. How is cutting waste less positive? They're conservatives. They get bonus points for cutting things. Now, if they passed tax increases, then you've got a point.
- true_religion 14y agoThere's cutting fat, then there's cutting muscle. The two aren't too similar, but I wouldn't want anyone cutting into me who wasn't a surgeon. Now with politics, we often have people who claim to cut waste, but are perceived as cutting necessary programs.
- redthrowaway 14y agoCutting spending is positive among their base, which is about a third of Canadians. The rest typically wouldn't vote Conservative. They and the NDP simply split the Liberal and Bloc vote in the last election. You may view the CBC and Healthcare as waste; the vast majority of Canadians do not. Harper wants more than anything to convince Canadians that the Conservatives are trustworthy. The last thing he wants is for Canadians to be sick of them by the time the next election rolls around, especially if the Liberals manage to find a halfway competent leader. That's why Harper's been as centrist as he has, and that's why cuts to popular programs are being delivered alongside this news. He'll stay true to conservative values, but only insofar as they don't hurt his re-election chances.
- deleted 14y ago[deleted]
- dstein 14y agofrom reddit: SR&ED is [reorganized.] Whew, so it's not completely axed. If anything Canada needs significantly more investment and tax programs like this. Brain drain has always been a problem for Canada because of the lack of investment from the government and the lack of tech-oriented VC.
- cperciva 14y agoI was hoping for SR&ED to be completely axed. It's a huge monstrosity of paperwork, to the point that small businesses pay 30% of their tax credits to consultants who fill out the forms for them and large businesses hire teams of people for the sole purpose of tracking and classifying SR&ED expenses so that the tax credits can be claimed. I suspect that Tarsnap is eligible for some SR&ED credits, but it's simply not worth the time and headaches it would cost me to claim them. If Canada wants to encourage innovation, they should set up a system which rewards people for doing new and innovative things, not a system which rewards people for being good at filling out forms.
- erohead 14y agoTalk to Ernst & Young. They will help startups file for SR&ED for a flat fee of $1-3k. Takes a few hours to draft the document with their help. It is not as hard as it sounds.
- chrisdinn 14y agoI've successfully written SR&ED applications myself for businesses certainly less deserving than Tarsnap. We decided the consultants were too expensive and gave it a shot ourselves. One solid week of work for one guy at a company of 10 people netted $30,000, definitely worth the time. All you need is a decent record of work done (I used both github commit log and a bug tracker.) Unfortunately I expect you'll never get money from a bureaucrat without a little paperwork. Still, you're missing out if you don't even try.
- wildmXranat 14y agoWhile it is a big headache to trac, document work and formulate and application, it is most definitely worth it. I've been part of a team that has claimed small sr&ed pieces of work and managed to get back a substantial credit. I agree that there should be a more stringent vetting of applications as this is our tax payer money we're talking about.
- aoprisan 14y agohow is this even remotely a smokescreen? it will save money and lower costs for businesses in the long term.
- Natsu 14y agoI believe he's arguing that this is a good change that will get a lot of press. With that creating an opportunity to make a lot of bad changes while everyone is focused on this. Not being up on Canadian politics, I won't take a position on whether or not that is correct, except that the US is in the same boat and I would like it if they would get rid of our penny. I know there are people who say it's traditional and whatnot, but I don't see anyone clamoring to bring back two or three cent pieces.
- kmm 14y agoA brilliant decision. Now if we could only get rid of our 1 euro cent here. According to some inflation figures I quickly found on the internet, a (US dollar) penny had a hundred years ago 23 times as much buying power as a penny nowadays. That means the smallest denomination was then was worth almost as much as a quarter is now! People could get by without smaller coins then and they should be able to work perfectly fine now without worthless pennies.
- drostie 14y agoMove to the Netherlands. The one-euro-cent and two-euro-cent bits don't exist here unless you're doing a bank transaction; cash transactions get rounded to the nearest 5 cents.
- phillco 14y agoEven better: the US used to have a half-cent but they abolished it in 1857 due to its lack of value. With inflation, it's worth more than today's dime.
- alasano 14y agoSome would argue that your example is almost exactly as good as the other one given.
- schiffern 14y agoHis example features actual abolition of an existing coin, not just deciding "well, this ought to be granular enough" when designing money.
- deleted 14y ago[deleted]
- kamjam 14y agoFor a few years during the transition to decimalisation, the UK had a half penny also. http://en.wikipedia.org/wiki/Halfpenny_(British_decimal_coin) http://en.wikipedia.org/wiki/Halfpenny_(British_decimal_coin...
- seanmccann 14y agoIf the customer has the pennies, they can use them. Payments with debit or credit cards, or cheques, can also be to the penny. But if the customer is paying cash and doesn't have the pennies, the total will go up or down to the nearest nickel. For example, $1.02 will become $1 and $1.03 will be $1.05. Something just feels wrong about rounding. The customer would always get screwed. They should solve this problem by using the federal sales tax to round up/down. $1.25 + 5% = 5¢ of tax instead of 6.25¢. That said, it would make sense for merchants to round down for cash purchases. It would be a tiny incentive to use cash rather than credit cards (which cost the merchant 2-4%)
- dfc 14y agoThat sounds like a nightmarish tax policy. Moreover one of the best things for consumers was when the stock market changed quotes from fractions to cents.
- ced 14y agoMoreover one of the best things for consumers was when the stock market changed quotes from fractions to cents. Why?
- dfc 14y agoBecause it gave an advantage to market makers and large institutional traders. I can look for some of the research if you are interested... This is from the SEC at the time: http://www.sec.gov/news/testimony/ts092000.htm http://www.sec.gov/news/testimony/ts092000.htm It should be a good starting point if you are interested. There was also a NYT article that was very succinct but I can not find the citation at the moment. EDIT: I'm at a loss for why this was downvoted. Decimalization is widely held to be a huge win for consumers. It's almost laughable to think otherwise. From the NYT: "There is a potential for investors to save hundreds of millions of dollars, but some of those savings are likely to be offset by increased commissions. Brokers have made substantial profits by pocketing the spread, and in some cases have been able to charge low commissions -- or, in extreme cases, no commissions -- on trades in stocks with large spreads, because of those profits. It was the discovery that brokers in the Nasdaq market had been conspiring to keep spreads high on many stocks that began the inexorable move toward decimalization. The Securities and Exchange Commission imposed new rules last year that partly integrated electronic markets, like Instinet, that were previously available only to institutional investors, into Nasdaq. Suddenly, quotes with spreads of less than one-eighth were available." [1] [1] http://www.nytimes.com/1997/06/06/business/so-long-fractions-but-maybe-not-till-2000.html?pagewanted=print&src=pm http://www.nytimes.com/1997/06/06/business/so-long-fractions...
- vaksel 14y agoi wonder if Canada has that bit, where the prices you see in the store are the final prices(i..e with tax already calculated in)
- UnFleshedOne 14y agoNo, the prices are before tax. I think there is even a law against showing prices with tax for whatever reason.
- brunoqc 14y agoI thought they don't include tax so they don't have to change it every time the tax rate change.
- alsocasey 14y agoI suspect pricing of goods changes more often than sales tax rates.
- excuse-me 14y agoShowing before tax prices (almost) makes sense in the US where every other street has it's own local tax rates. But Canada only has federal and provincial taxes so I suspect it's just to make the price look better - especially if you are comparison shopping with the US
- danudey 14y agoThere's no law against it (some places do this, most notably street carts, etc.), but if you were a cafe owner would you really want to put 15% higher prices on your menus? People would look at the numbers and leave, rather than noticing the 'taxes included' and having to do math. Until it's a legislated requirement (and boy do I wish it were), we're probably not going to see it very often other than with fungible cash-only vendors.
- randlet 14y ago"They cost more to produce than they are worth, nobody likes them, they have no commercial value." My very first (very primitive) public facing webpage was dedicated to abolishing the Canadian penny. Good riddance!
- rogerbinns 14y agoCGP Grey has an excellent youtube video on the whole issue for the US. The US currently makes 4 billion 1 cent coins annually. And they have already been abolished at US military overseas bases. http://www.youtube.com/watch?v=y5UT04p5f7U http://www.youtube.com/watch?v=y5UT04p5f7U (Come to think of it, doesn't the US military use a lot more metric system than the general population. If so, this would be a good reason to increase the military since it would appear to be the only way progress happens!)
- philwelch 14y agoThe US military also uses a 24-hour clock (2000 hours instead of 8:00 PM) and consistent little-endian date formats (29 March 2012 instead of March 29 2012).
- rogerbinns 14y agoThat does it. I'm now in favour of compulsory military service for everyone, since that is the only way US citizens will be modernized.
- taitems 14y agoJust as a point of interest, Australia removed the 1 and 2 cent coins from circulation back in 1992. Prices have been rounded to the nearest 5 cent value when paying with cash ever since. A comment on this thread said that it's madness, but it's all someone my age has grown up with.
- _frog 14y agoAs a fellow Australian the pennies aren't what I found most bizarre about US and Canadian currency, I more often found myself getting tripped up by the fact that listed prices in US and Canadian stores never include sales tax.
- maaku 14y agoAt least in the US, sales tax is assessed locally, so it can vary even within a particular region. Dealing with fixed prices and additional sales tax is the only reasonable way to run a business that crosses multiple localities.
- milanst 14y agoWhat about gas prices? The displayed price is what you actually pay, it always includes all the taxes. I guess the businesses are not required to do this for other products and naturally they choose to display the lower price, i.e. the one excluding taxes.
- Nesterov 14y agoThe beginning of the end.
- burgerbrain 14y ago...of pennies.
- baltcode 14y agoThis is simply patching over the underlying problem - dilution in the money supply. There is no reason why countries like the US and Canada who have only become a lot wealthier in the last 200 years should have such inflation. Stop printing money, and the penny will remain valuable!
- alanh 14y agoReminds me of an anecdote about a woman who balanced her checkbook by rounding all amounts to the nearest dollar. Her father eventually heard about this, freaked out, and re-tallied everything — and ended up within a dollar of her previously-computed balance.
- deleted 14y ago[deleted]
- jowiar 14y agoRidiculously simple solution: Drop the hundredths place entirely. Kill pennies, nickels, quarters, bring back $.5 pieces. A tenth of a dollar is enough precision for any realistic transaction in the United States.
- ethereal 14y agoSimple in concept, difficult in execution. How would you recommend the transition between the two systems be handled?
- philwelch 14y agoStop minting pennies, nickels, and quarters; start minting 20 cent pieces and mint more 50 cent pieces; let the free market sort it out. I'm not being flippant, it would actually work, at least as far as not wasting money producing low-value coinage is concerned.
- blahedo 14y agoOr, just skip the 20 cent and let 10/50 be the only subdivisions. (Currently, we get by with 1/5 and no 2.) Frankly, if we're talking radical reform I'd rather keep the quarter and ditch the dime; even 10c seems too small to fiddle with most of the time, so 25c is the smallest denomination that seems worth bothering with. (Also, it's ubiquitous in mechanical coin-op devices like laundry machines, pool tables, etc.)
- jakejake 14y agoI actually wouldn't mind doing away with coins altogether and going with whole dollar amounts. I hate having to carry around change!
- lukeholder 14y agoaustralia did this in 1992. git rid of the 1c and 2c coins. we have 5c pieces. currently living in the US, and I cannot stand pennies.
- dholowiski 14y agoI suspect that POS software vendors will make billions of pennies selling upgrades.
- ww520 14y agoDoes that mean pricing psychology would work differently? 19.99 would be out of fashion?
- mahyarm 14y agoIt will turn into 19.95 to keep the same psychology. Many stores already vary the last digit to mark the status of the item. Such as 97 for clearance items and so on.
- aoprisan 14y agoactually, it'll be $20.00
- artursapek 14y agoI sure wish it would. I never really understood the supposed psychology behind .99 and .95. To me, three nines looks less welcoming than three zeros.
- mahyarm 14y agoIt's so it doesn't cross the subconscious barrier of "under 20 dollars". $99.99 doesn't cross the subconscious barrier of $100 for example. It's probably been A/B tested to death, since it's so widespread among retailers.
- artursapek 14y agoWow. I'd like to think people aren't wired like that, but I guess subconsciously there's lots of exploits like this.
- mahyarm 14y agoIt's so it doesn't cross the subconscious barrier of "under 20 dollars". $99.99 doesn't cross the subconscious barrier of $100 for example. It's probably been A/B tested to death, since it's so widespread among retailers.
- damncabbage 14y ago"And some old adages will likely fade away, too." Australia hasn't had pennies since the sixties and we still use phrases like "in for a penny, in for a pound."
- blahedo 14y agoThe US hasn't had pounds for centuries and we still use phrases like "in for a penny, in for a pound". :)
- jstalin 14y agoThe glory of central banking. http://coinflation.com/ http://coinflation.com/
- meric 14y agoNow is a good time to buy up all the pennies for cheap. Melt them down the day they're abolished and sell it all as scrap metal (or don't sell if you think it'll hold value like gold does).
- CrystalKoo 14y agoGreat in a way that it costs more money to produce a penny than what it's worth.
- maeon3 14y agoIs the ditching of the penny an alarming event like the addition of a zero on the largest denomination of currency? Why do I work hard to exchange my labor for money that is being inflated on purpose?
- Egregore 14y agoTo exchange that money for goods. To invest those money into something that will bring you more money back.
- mbtforshoes 14y agohttp://www.mbtforshoes.com/ http://www.mbtforshoes.com/ good shoes