Get ready to round: penny’s day all but done

Businesses not ready for Feb. 4 change

The penny is about to drop — with many businesses unprepared and the government having only limited success informing Canadians of the change to, well, change.

The Royal Canadian Mint will stop distributing pennies to financial institutions on Feb. 4 — the same day businesses are encouraged to begin rounding cash transactions to the nearest fivecent increment in a “fair and transparent manner.”

For example, a transaction totalling $1.02 would round down to $1, but a purchase of $1.03 would round up to $1.05.

Transactions paid with cheques, credit cards and debit cards will continue to be settled to the cent. The GST and HST will be calculated on the pre-tax price, not the rounded price. Canadians who hoard pennies will still, however, be able to use pennies indefinitely to pay for purchases.

While the date is just days away, many small businesses are clearly not ready for the penny’s phase-out.

“We’re not prepared in the least,” said Judy Mance, manager of Kameleon Pop-Shop in Ottawa, a store specializing in jewelry and women’s fashion.

Mance said she was unfamiliar with the Feb. 4 transition date or the specifics of when to round up or down.

She noted the family business — located a block from Parliament Hill — hasn’t received any notification from the federal government about the transition.

Nevertheless, she said the business is just as happy to round up or down for customers to avoid having to hand out pennies.

The Conservative government announced in last March’s budget it was ending production of the penny because it costs 1.6 cents to mint, due to rising metal, labour and other manufacturing costs.

The government says the move will save taxpayers around $11 million a year.

To help retailers, charities and consumers, the federal government has created a web portal on the Finance Canada website, including downloadable signage.

The Mint has also launched a social media campaign on Facebook and Twitter to alert Canadians about the transition date. As well, approximately 225,000 printed flyers were placed in Canada Post outlets across the country explaining the changes.

Print, radio, TV and online ads have begun to appear across Canada, and will circulate until the end of March.

Canadian Federation of Independent Business (CFIB) president Dan Kelly said a number of his members aren’t prepared for the transition away from the penny.

“Business awareness is low,” Kelly acknowledged.