Evidence of meeting #70 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site.) The winning word was clauses.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Gordon Boissonneault  Senior Advisor, Economic Analysis and Forecasting Division, Demand and Labour Analysis, Economic and Fiscal Policy Branch, Department of Finance
Sue Foster  Acting Director General, Policy, Appeals and Quality, Service Canada
Margaret Strysio  Director, Strategic Planning and Reporting, Parks Canada Agency
Stephen Bolton  Director, Border Law Enforcement Strategies Division, Public Safety Canada
Michael Zigayer  Senior Counsel, Criminal Law Policy Section, Department of Justice
Garry Jay  Chief Superintendent, Acting Director General, HR Workforce Programs and Services, Royal Canadian Mounted Police
Jeff Hutcheson  Director, HQ Programs and Financial Advisory Services, Coporate Management and Comptrollership, Royal Canadian Mounted Police
Darryl Hirsch  Senior Policy Analyst, Intelligence Policy and Coordination, Department of Public Safety
Ian Wright  Executive Advisor, Financial Markets Division, Financial Sector Policy Branch, Department of Finance
Nigel Harrison  Manager, Legislative and Parliamentary Affairs, Department of Fisheries and Oceans
David Lee  Director, Office of Legislative and Regulatory Modernization, Policy, Planning and International Affairs Directorate, Health Products and Food Branch, Department of Health
Anthony Giles  Director General, Strategic Policy, Analysis and Workplace Information Directorate, Department of Human Resources and Skills Development
Bruno Rodrigue  Chief, Income Security, Federal-Provincial Relations and Social Policy Branch, Department of Finance
Gerard Peets  Senior Director, Strategy and Planning Directorate, Department of Industry
Suzanne Brisebois  Director General, Policy and Operations, Parole Board of Canada, Public Safety Canada
Louise Laflamme  Chief, Marine Policy and Regulatory Affairs, Department of Transport
Judith Buchanan  Acting Senior Manager, Labour Standards Operations, Human Resources and Skills Development Canada
Mark Hodgson  Senior Policy Analyst, Labour Markets, Employment and Learning, Department of Finance
Stephen Johnson  Director General, Evaluation Directorate, Strategic Policy and Research Branch, Department of Human Resources and Skills Development
James McNamee  Deputy Director, Horizontal Immigration Policy Division, Department of Citizenship and Immigration
Graham Barr  Director General, Transition Planning and Coordination, Shared Services Canada

6 p.m.

Some hon. members

Oh, oh!

6 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

No, I'm not talking about you, Bev; I'm talking about the lowly penny.

I personally am relieved that the jig is up for the lowly penny. It's been an aspiration of mine for a long time. But I'm not here to praise the government or the minister quite so much; I want to qualify my remarks, if I may.

By way of introduction, I do acknowledge—in the same vein that a broken clock is correct twice a day, I suppose—that the government is doing the right thing in this regard. The penny has no commercial value. It costs more to produce than it's worth, and it doesn't circulate in the way currency is supposed to circulate. We all know it winds up under your bed in a cookie jar or an ice cream pail more often than not.

In fact the penny has been an expensive nuisance for as long as most of us can remember. People don't even pick them up off the street any more. If you give a handful of pennies to a homeless guy, you get the stink eye instead of a thank you.

Mr. Chairman, I was shocked to learn that there are 30 billion pennies in circulation currently; that's billion with a b. Every year, the Royal Canadian Mint has been minting one billion more. It's an absurd situation, given that they cost more to produce than they're actually worth. Last year—I suppose getting into the spirit of restraint—they only produced 500 million new pennies.

To begin with, I want to address people's potential fears about rounding. In other jurisdictions where they have reduced the lowest denomination, be it a penny or a centavo or a peso, they've introduced a rounding formula. The empirical evidence has been that it's revenue neutral. People need not be concerned that merchants will round up all the time, to the disadvantage of the consumer.

People should also realize that the rounding only takes place on the final total purchase. If you're buying 50 items or 20 items in the grocery store, you're not rounding each individual item; you're only rounding the total figure.

I think that's important for committee members to realize as they're recommending yea or nay on this clause. The general public doesn't have to be afraid of rounding. In those jurisdictions, it's determined to be revenue neutral.

What I want to criticize, and I think the committee members should be aware of this as a reservation, is that the minister only went half way. This clause, as I understand it, only causes the Royal Canadian Mint to cease production of pennies; it doesn't take pennies out of the currency of the realm. I guess I would ask for confirmation from the witnesses that this is in fact the case.

In other jurisdictions, when they've eliminated the lowest denomination they would give, say, a two-year grace period, to give people time to gather them up and cash them in. But after a certain period of time that coin is no longer accepted as currency.

Am I correct in that interpretation?

6 p.m.

Conservative

The Chair Conservative James Rajotte

Mr. Wright, please.

6 p.m.

Ian Wright Executive Advisor, Financial Markets Division, Financial Sector Policy Branch, Department of Finance

It's been a bit mixed across different jurisdictions. Some countries did remove what we call “legal tender status”, so although redeemed or pulled out of circulation, one would continue to use the penny as the smallest denomination. Electronic transactions, cheques, debit cards, and those sorts of transactions would still be settled to the penny. That is correct.

6 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Yes. But if you show up at a store with a one-cent piece in Australia or New Zealand, the merchant doesn't have to take that as currency because they are no longer considered legal tender. They still price things to the one one-hundredth of a dollar, but if you try to use that penny, it's not recognized, right? Am I not correct? It's just a piece of metal.

6 p.m.

Executive Advisor, Financial Markets Division, Financial Sector Policy Branch, Department of Finance

Ian Wright

Even under the current laws as they stand now, an exchange between a retailer and a customer is a voluntary transaction. The retailer, even now, can refuse to accept as part of that exchange.... As I think you've seen when you go into some Tim Hortons and stores like that, they'll refuse to take $50 bills or $100 bills. We're not impacting upon that part of the exchange that's going on.

Legal tender is a rather narrow definition that looks at settlement of debts. It's the ability to put forward for payment for the settlement of a debt. We're not dealing, in this instance, with the more technical definition of legal tender.

6:05 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

I think I understand. I think you're being unnecessarily complicated in your response. As I understand it, ten years from now you can still spend pennies if you so choose.

6:05 p.m.

Executive Advisor, Financial Markets Division, Financial Sector Policy Branch, Department of Finance

Ian Wright

That's correct. The intent is to maintain the value of the penny.

6:05 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

That's right. That's what I'm critical of. I believe the penny should have been taken out of circulation altogether.

I also believe it should have been the one-cent piece and the five-cent piece, and that the lowest denomination should be the ten-cent piece and all coinage should be in multiples of ten--the 10¢, the 20¢, the 50¢, the one and the two.

I had hoped that when the minister modernized our coinage and our currency, he could have taken that obvious next step at the same time.

In praising the government for taking this logical step that could save the economy as much as $130 million a year, when you factor in the manufacture, the handling, and the cost to the economy in lost productivity for counting out pennies at the cash register and keeping everybody waiting while these things go, I don't understand why we didn't go all the way and simply eliminate the penny as legal tender in this country.

Thank you, Mr. Chairman.

6:05 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you very much, Mr. Martin.

I have Mr. Brison, and then Ms. Glover.

6:05 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

I agree with much of what Mr. Martin said, but I think part of what he said.... I say this as a friend and colleague of Mr. Martin. I don't want Canadians watching this to believe that this committee and its members are out of touch with the realities they face. Not all members were raised with the wealth and privilege that Mr. Martin is describing in terms of the profligacy that he describes of disposing of pennies in a wanton way.

There are places where I grew up--in Cheverie, Hants County, Nova Scotia--where my 88-year-old father continues to roll his pennies. He worked--I think it was 1945--for the Bank of Commerce. He was a bank manager for the Bank of Commerce when he started the habit of rolling pennies, and today, at the age of 88, he continues to roll his pennies.

So I would urge, Mr. Martin, if you have any extra pennies, please send them to Clifford Brison, Cheverie, Hants County, Nova Scotia, B0N 1G0, because my father and mother will gladly take care of them. They'll roll them, in fact; you don't even have to do that.

6:05 p.m.

Conservative

The Chair Conservative James Rajotte

And that's how he pays for his meals at Bâton Rouge.

We'll go to Ms. Glover.

6:05 p.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Thank you, Mr. Chair.

I want to take a moment to address this, because the penny is in fact made in my riding of St. Boniface. The folks at the Royal Canadian Mint there have done a fantastic job in moving toward implementing these changes, etc.

But I do want to say, with regard to taking pennies out of Canadians' pockets, as suggested by Mr. Martin, on this side we don't do that. We are encouraging Canadians, and I want to put this on the record, to consider donating their pennies to charities. That is why I think it's so important that we did not do away with the value of the penny, because Habitat for Humanity and women's heart health and all these charities are going to benefit from people who want to discard their pennies, such as Mr. Martin. It really is going to go to a good cause.

I'm taking this opportunity to encourage Canadians to donate their pennies to these charities, because they really are good causes and can use the extra money--Mr. Martin included.

Thanks.

6:05 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Ms. Glover.

I have Mr. Jean and Mr. Van Kesteren.

6:05 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Thank you, Mr. Chair.

I want to say that even being part of the government, I, like Mr. Martin, with less opportunity to be boisterous and obnoxious, have been able to send many letters—

6:10 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

You can hold your own at being obnoxious.

6:10 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Not as part of government, I can't.

6:10 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

[Inaudible--Editor]

6:10 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

I appreciate that, Mr. Martin. Thank you.

I would like to say that I have written several letters to the Minister of Finance to ask him to get rid of the penny. I think this is one of the best moves the government has done in this budget, simply because of the waste of time. As a retailer I've seen the tremendous waste of time and absolute inefficiencies of this, and to add to the government's agenda of productivity is a great move. I would commend Mr. Martin for coming on board for this before I was even on board.

I would like to say this is a great move by the government and a great move for Canadians in the area of productivity.

6:10 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Jean.

We'll go to Mr. Van Kesteren, please.

6:10 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Maybe just to wrap up, I also want to commend Mr. Martin for his foresight on the penny. I just want to give him a little tip. If you collect pennies from 1996 and earlier, they're worth 3¢ a piece. You can make a little bit of extra money, and at the same time, you can get rid of those pennies, as well. It is 3¢ before 1996.

6:10 p.m.

Conservative

The Chair Conservative James Rajotte

Okay, thank you.

I'll go back to Mr. Martin.

6:10 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Thank you for those helpful comments.

In closing, we should point out that Canadians would be interested to know that pennies before 1996 were in fact, I believe, 98% copper. Today they're only 4% copper. They're 96% steel and other alloys, I believe.

If you can find a 1936 dot, don't throw it away, and don't use it as ballast in your boat. I think that one's worth a lot of money. It is 1936 with a little dot under the date. It is worth thousands of dollars.

Thank you, Mr. Chairman.

6:10 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Martin, and good luck with your crusade against the nickel now.

(Clauses 388 and 389 agreed to)

6:10 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

I thank our officials for being here.

We'll now move to division 17, clauses 390 to 410, Federal-Provincial Fiscal Arrangements Act. We have two amendments here.

We'll have our general discussion first. We'll start with Mr. Caron.