Penny losing currency with Canadians

A majority of Canadians want to get rid of all those pennies jingling in their pockets, according to a new poll, and if they get their way the country’s economy stands to benefit, says currency analyst David Watt.

The poll, conducted by Ipsos Reid for canada.com, tracks the results of an identical survey conducted in 2008 and reveals that 60 per cent of Canadians want to abolish the one-cent piece, a four-point increase over the last two years.

Watt, a vice-president for RBC Capital Markets, says that the Canadian economy could benefit if the government decides to heed the call: production costs for the penny would be saved and, more importantly, it would put more money back into circulation.

Watt explained that many people hoard pennies, keeping them in jars at home or in a box in the basement. If the government decided to give people cash in exchange for their old pennies, that money might be spent or put it in a bank account. Either way, the money is back in the economy, he said.

Canadians shouldn’t worry about retailers sneaking in price increases either, Watt says.

“It’s a fearmongering argument,” he said. “There may be some retailers that round up more often than round down, but I can’t see it as a big aggregate issue.”

According to the poll, opinions on the penny vary by geography, which is something Sean Simpson, senior research manager at Ipsos Reid and lead author of the poll, cannot explain.

Quebecers (71 per cent), are most likely to want to abolish the penny, followed by Atlantic Canadians (62 per cent), Alberta (59) and British Columbia (58). Fifty-six per cent of Ontarians support the idea, while Canadians living in Manitoba and Saskatchewan are least likely to want to drop the one-cent piece (55 per cent).

“Quebecers are anomalous in a lot of ways,” Simpson said. “Sometimes results of surveys are not easily explainable and this is one of those instances.”

The poll shows that men (70 per cent), are more likely to dislike the penny compared with women (51 per cent).

Simpson said two reasons can explain this: men usually don’t have purses and have to carry cumbersome change in their pockets, and men tend to be more free-spending with their money.

“They don’t count their pennies as much,” he said.

The poll also shows the younger a respondent, the less likely they wanted to get rid of the penny. Sixty-seven per cent of those age 55 and over wanted the penny gone, versus 52 per cent of people age 18-34.

“People 55 and over were alive when the penny was worth a lot more than it is now, it was a useful piece of currency,” Simpson explained. They want to get rid of it more perhaps because they have a greater appreciation how much value the penny has lost, he said.

Another result that left Simpson wondering is why those earning under $30,000 are 62 per cent in favour of abolishing the penny. Two years ago, this cohort was evenly split —which he thought made sense, considering poorer people tend to make every penny count, he said.

The poll of 1,017 adults from Ipsos Reid’s Canadian online panel was conducted June 10-14. The poll is said to have a margin of error of 3.1 percentage points, 19 times out of 20.

Source: Postmedia News