Saturday, May 19, 2012


While all the world has been wringing its hands over the dire financial straits of Greece, Spain and Italy, no-one foresaw Canada's recent shocking announcement that the country would soon be penniless. 

Ha-ha-ha!  I refer, of course, to the Canadian government's recent decision to stop minting pennies.  This is a subject that has been under discussion for several years now.  The hard fact is that Canadian pennies now cost more to mint than they're actually worth.  From that point of view, it makes perfect sense to stop minting them.

But it causes problems, doesn't it?  How do sellers of anything justify charging $24.99 for an item when it will soon be theoretically impossible to pay ninety-nine cents?  Do we start rounding all of our prices to the nearest nickel?  But wait; what happens when we apply the 13% tax (if you combine the 5% GST with the 8% Ontario provincial sales tax)?  Suddenly a $10.00 item costs $10.13.  D'oh!

Of course, the difficulty only arises if we try to pay with real, hard currency.  If we use our credit cards or pay by debit or write a cheque we can still pay any dollar fraction that we like, which once again underscores an observation made by myself in an earlier post that money is, after all, only conceptual.  My employer doesn't hand me a wad of bills every two weeks; they just hand me a pay stub and the balance in my bank account increases.  Then I write cheques or pay by debit or via on-line transactions and the balance in my bank account decreases.  Why stop at the penny?  Why not just do away with cash entirely?

I can suggest a two-fold answer to my own question.  First of all, because not everyone has embraced the digital age just yet.  Some people still like to pay with cash now and again, and I even know of some retailers that still don't accept debit.  The second reason is because, if we really did do away with cash, it wouldn't be a great leap for people to start realizing that our entire system of trade, one of the foundations of human society, is built on a fantasy.  It's all just numbers in the computers, with nothing of substance behind it.  And that realization would destroy the foundation upon which the whole system is built and bring it crashing down around our ears, all because Canada decided that pennies weren't worth minting any longer.