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Phasing out of the Penny

posted Dec 18, 2012, 11:32 PM by Margaret Lin CPA, CGA, CFP   [ updated Dec 18, 2012, 11:33 PM ]

As part of the Economic Action Plan 2012, the Government announced that it will phase out the penny from Canada’s coinage system. While the cent will remain Canada’s smallest unit for pricing goods and services, the Royal Canadian Mint will no longer distribute pennies as of February 4, 2013.

 

As pennies exit circulation, only cash payments will need to be rounded, either up or down, to the nearest five-cent increment. This will have no impact on cheque payments or electronic payments, such as credit and debit cards.

 

  • Amounts ending in 1 and 2 cents are rounded down to the nearest 10 cents;
  • Amounts ending in 3, 4, 6 and 7 cents are rounded up or down to the nearest 5 cents;
  • Amounts ending in 8 and 9 cents are rounded up to the nearest 10 cents;
  • Amounts ending in 0 cent and 5 cents remain unchanged.

For any cash payment, only the final amount (or equivalently, the change owed) should be subject to rounding. Individual items, as well as any duties, fees or taxes, should be tabulated in their exact amount prior to rounding.

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