Phasing Out of the Penny
As part of the Economic Action Plan 2012, the Canadian 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 As pennies are gradually withdrawn from circulation, price rounding on cash transactions will be required. This will have no impact on cheque payments or electronic payments, such as credit and debit cards, only cash transactions will be affected.
As pennies exit circulation, only cash payments will need to be rounded, either up or down, to the nearest five-cent increment. The Government of Canada will be adopting a rounding guideline that has been used successfully by other countries for its cash transactions with the public. Under this guideline, when pennies are not available, cash transactions will be rounded in a fair and transparent manner
- Amounts ending in 1 cent and 2 cents are rounded down to the nearest 10 cents;
- Amounts ending in 3 cents and 4 cents are rounded up to the nearest 5 cents;
- Amounts ending in 6 cents and 7 cents are rounded down to the nearest 5 cents;
- Amounts ending in 8 cents and 9 cents are rounded up to the nearest 10 cents;
- Amounts ending in 0 cent and 5 cents remain unchanged.
For more information, read Phasing out the penny on the Canada Revenue Agency web site.