The US could ditch the penny: What happened when Canada did it?

(NEXSTAR) — Weeks after the Department of Government Efficiency (DOGE) set its sights on the penny, President Donald Trump called on the Treasury Department to stop minting new one-cent coins, calling them “wasteful.”

The most recent report from the U.S. Mint shows it costs roughly 3.69 cents to make one penny. Fiscal year 2024 marked the 19th consecutive year that the penny (and the nickel) “remained above face value” when it comes to production costs.

It’s unclear if Trump is hoping the country can function fine with the millions of pennies already out there — The New York Times Magazine reported in 2024 that there are roughly 240 billion pennies waiting to be spent — or if he wants to do away with the one-cent coin altogether.

It wouldn’t be the first time the U.S. has done away with a coin. In 1857, Congress discontinued the half-cent coin. The U.S. could also turn its eyes to the north for advice. 

Canada parted ways with its penny in the early 2010s for the same reasons the U.S. has expressed regarding its penny. At the time, however, it cost 1.6 cents to produce one new penny, vastly less than what the U.S. is paying now, but enough to spur the government to do away with the coin.

The Royal Canadian Mint worked with financial institutions and charities to begin collecting the nation’s pennies, essentially putting the distribution process in reverse, Alex Reeves, then the Senior Manager of Communications for the Mint, told PBS News in 2014.

Armored cars, typically tasked with transporting coins and paper dollars around, were tasked with bringing the billions and billions of pennies to sorting facilities. There, the different coins would be sorted based on their metals (older pennies contained more copper while newer pennies relied on zinc or steel).

Once sorted, pennies could be melted down to extract their valuable metals. At the time, PBS News reports, Canadian officials estimated that selling the melted-down metals could bring in $42.5 million — that’s roughly $56.5 million in today’s dollars, or about $39.5 million in U.S. dollars. 

Canadians were able to help in the process, bringing their pennies to coin collectors and banks to swap them out.

Despite the return the Canadian government was expecting, it was paying its residents a penny for a penny during the process. Still, in the first three years of the process, the Royal Canadian Mint removed at least 6 billion pennies. 

Now, if you’re paying with cash in Canada, purchases are rounded to the nearest nickel (a $19.82 purchase becomes $19.80 while $19.83 becomes $19.85). Payments with checks or debit or credit cards are not rounded.

Australia, Norway, Switzerland, and the United Kingdom previously removed their lowest denomination coins. 

Spoiler alert: there’s likely little reason to start hoarding your pennies. Ten years after Canada stopped minting the penny, collectors said the novelty value of the coin did not skyrocket. 

Todd Sandham, owner of a coin and jewelry shop in Ontario, told Canadian outlet CTV News in 2023 that even someone who brought in a jar of pennies to sell would “get about a penny and a half for them.” 

It’s unclear how the penny-pinching process could play out in the U.S. Zinc lobbyists have long opposed the end of the penny and efforts by Congress to change its size, metal content, and existence have all failed in recent years.

Still, in a 2022 report from the Federal Reserve, officials warned that “drastically reducing or ending the production of the penny,” as Canada did, could lead to a “significant flowback of coin from consumers and businesses seeking to turn in their pennies.”

The same report suggested, however, that reducing penny production could save the Mint up to $100 million annually. For context, that’s less than 1% of the $2 trillion Elon Musk claimed DOGE could cut in the “best-case outcome.”