The history of the penny

A short history of the Canadian penny

For a century and a half, the penny was the smallest promise Canada made: one cent, honoured everywhere. It sat in jars on kitchen counters, waited in "take a penny, leave a penny" trays beside cash registers, and turned up in coat pockets years after anyone remembered putting it there. Its story is longer than the country's.

The first Canadian cent arrived in 1858, nine years before Confederation. At that time, the Province of Canada adopted decimal currency and ordered coins from the Royal Mint in London. They struck ten million one-cent pieces featuring Queen Victoria, but this was too many. Copper tokens and coins were already in circulation, so the government overestimated how many cents Canadians required. This oversupply lasted so long that the new Dominion of Canada did not issue its own cent until 1876, nearly a decade after Confederation.

The coin became fully Canadian in stages. In 1908 the Royal Canadian Mint opened in Ottawa, and cents were finally struck at home. In 1920, with copper prices rising, the large cent shrank to the small coin generations of Canadians would recognize. And in 1937 the penny got the face it would wear for the rest of its life: George Kruger Gray, a prolific British coin designer, drew two maple leaves joined to a small twig. The maple leaf had appeared on the cent before, but only as a supporting player; Kruger Gray's big, realistic leaves made it the star. The maple-twig design stayed on the penny, essentially unchanged, until the very end. It was interrupted only once, in 1967, when Alex Colville's rock dove marked the centennial of Confederation. In 1982 the coin picked up a twelve-sided edge to help people with low vision tell it from a nickel. Underneath the design, its metal quietly changed as the Mint chased falling costs on a coin worth one cent: from nearly pure copper, to copper-plated zinc in 1997, to copper-plated steel in 2000.

Economic factors led to the retirement of the penny. By the early 2010s, it cost about 1.6 cents to make each new one-cent coin. This was roughly 0.6 cents more than its actual value. Supplying pennies to the economy cost the Government of Canada about $11 million a year. Canadians kept pennies in drawers and jars instead of spending them. These small coins created handling costs for banks, retailers, and charities. They also caused an environmental cost through mined metal while providing very little buying power.

The federal budget, Economic Action Plan 2012, announced on March 29, 2012, that Canada would remove the penny from its coinage. Five weeks later, on May 4, 2012, Finance Minister Jim Flaherty used a coining press at the Royal Canadian Mint's Winnipeg plant to strike the last Canadian penny. The Bank of Canada received that final coin. It is now on display in the permanent gallery of the Bank of Canada Museum in Ottawa. The Mint stopped all penny distribution on February 4, 2013.

What followed was quieter than many people feared. The cent stayed, and stays, Canada's smallest unit for pricing, so nothing changed on price tags, and cheques and card payments are still settled to the exact cent. Only cash changed: when a cash total ends in an awkward amount, it is rounded up or down to the nearest five cents, and only on the final bill, after tax. The pennies themselves lost nothing. The Government of Canada was explicit that the penny retains its value indefinitely and can still be used in cash payments with businesses that choose to accept them; the coins remain legal tender, and rolled pennies can be redeemed at financial institutions to this day.

The great return followed. The Mint estimates that about 35 billion pennies were struck between 1908 and 2012. If laid end to end, they could circle the Earth sixteen times. Roughly six billion pennies were thought to be in circulation when the elimination was announced. After the budget announcement, coin deposits at banks rose to about five times normal annual levels. These levels did not settle until late 2013. More than 3.5 billion pennies returned in the first year alone. Moving them required some 1,200 tractor-trailer loads. Over 14 million kilograms of coins went to metal processors to be melted down. The copper and zinc were recovered for new uses. The penny did not vanish; it was turned into other things.

The penny performed its usual role well: small amounts of good at scale. Budget documents suggested Canadians donate their saved jars of pennies to charity, and the country responded. The most notable event was the We Create Change penny drive. This program was run by Free The Children with RBC. Students at thousands of schools collected more than 140 million pennies, which is about $1.4 million. These funds supported clean water projects. A single bag of pennies worth $25 provides one person with clean water for life. It was a suitable final act for a coin that people had dropped into church plates, school fundraiser jars, and collection boxes for decades. One cent was almost nothing on its own, but together they built wells.

That is the inheritance the penny leaves behind. Not the metal, which the Mint has well in hand, but the habit: the idea that the smallest unit of generosity still counts, that spare value left in a jar can add up to something real, and that a token passed hand to hand can carry goodwill far beyond its face value. The Paper Penny picks up exactly where the copper one left off. It keeps the penny's oldest job, a small and honest marker of thanks, luck and giving, passed from one neighbour to the next, without asking anyone to mine, mint or truck a single gram of metal. The coin is retired; the cent, and the sentiment, are not. Paper Penny exists to keep that last part in circulation.

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