Canada column for Sunday, Oct. 30/16
THE CANADIAN REPORT
(c) By Jim Fox
First it was the $1 bill and then the $2 note switching to coins in Canada, followed by the elimination of the penny.
So, could the nickel be facing retirement next?
Not so fast, the government insists as an internal analysis on the pros and cons of keeping the nickel says it will stay for now.
There are “no plans to discontinue the nickel,” said David Barnabe of the finance department, even though New Zealand and South Africa have eliminated the coins over the past decade.
Even as the purchasing power of the nickel “has eroded over time (down 40 percent over 25 years) relative both to prices and incomes,” the analysis found it is still cost effective to mint them.
“As there are virtually no goods or services that can be purchased for a nickel, or several multiples thereof, the coin is generally used only to make change as part of larger transactions,” the study reported.
The nickel entered circulation in 1858 while the penny was dropped in 2013, leaving businesses to round up to the nearest nickel amount.
Some Canadian bankers suggest the nickel won’t be around five years from now.