Government Operations Committee on Feb. 13th, 2007

[Some hon. members]

Oh, oh!

[An hon. member]

Good one.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Okay, I think we'll end it at that.

[The Chair, Liberal, Diane Marleau]

Mr. Nadeau.

[Richard Nadeau, Bloc, Gatineau, QC]

Thank you, Madam Chair.

Good afternoon, Ms. Nadeau, Mr. Neville and Mr. Bennett.

You do 58% of your business in the domestic market, that is to say in Canada. If I understand correctly, Winnipeg is the place where most of the production is done. The market in Ottawa has more commemorative pieces. As for Tennessee, is that one of your plants or a company with which you do business?

[Ian E. Bennett]

It isn't a plant of the Royal Canadian Mint; it's simply a Tennessee plant that produces

multi-plated steel product for us.

[Richard Nadeau, Bloc, Gatineau, QC]

You also said that other coins were produced in India. I'm quite aware that we are in the era of market globalization, but couldn't these plants that supply the Royal Canadian Mint be in Canada?

[Ian E. Bennett]

Yes.

[Richard Nadeau, Bloc, Gatineau, QC]

Are they outside Canada because wages there are lower? I'm a bit surprised to see that the Royal Canadian Mint does business with plants in Tennessee and India. That's not a sin in itself, I assume, and it's a matter of globalization, but...

[Ian E. Bennett]

Globalization is a factor, that's true. It's very important to cut costs in both the private and public sectors. As regards India, we only produce Thai currency there.

[Richard Nadeau, Bloc, Gatineau, QC]

That's a contract that Canada is carrying out. The idea is to produce Thai coins in India. I understand. Perhaps I'm completely beside the point, but, in that case, why not move the Royal Canadian Mint to India or Tennessee? We'd be saving money.

[Ian E. Bennett]

We were not going to move the core of our business outside of Canada.

We're staying here. The Tennessee plant simply enables us to increase our production potential for

multi-ply steel blanks.

[Richard Nadeau, Bloc, Gatineau, QC]

I understand the idea, but I'm surprised.

If I remember correctly, there are approximately 208 countries in the world, and you manufacture coins for 13 of them, including Canada. Of course, Canada produces its own coins, and I assume it alone makes them.

Mr. Wrzesnewskyj talked about open markets earlier. Since 48% of our production is already intended for 12 countries, it is feasible to consider going and exploring elsewhere and doing business with other countries in order to manufacture more coins? For the moment, the market is limited to a given number of countries, but there are nevertheless a lot of opportunities for expansion, even though some countries manufacture their own coins.

[Ian E. Bennett]

Briefly put, yes.

I think there are a lot of opportunities in that area because our costs are lower. Our patent is also a positive factor.

[Richard Nadeau, Bloc, Gatineau, QC]

I suggest that idea because I'm not privy to that information, but who knows? In Europe, some 25 countries share the same currency, the euro. There was some talk of a currency of the Americas. Is it possible to head in that direction? Have you heard anything about that? Would we be saving money by producing a currency for the Americas, that is on a larger scale? Would that simplify matters?

[Ian E. Bennett]

I believe the laws are very strict in the United States. Only Americans can produce their...

[Richard Nadeau, Bloc, Gatineau, QC]

...their own coins.

[Ian E. Bennett]

Yes, precisely.

You're right in saying that the euro is the currency of all those countries, but it is very interesting to note that each country is entitled to put its own effigy on the back of its euros.

[The Chair, Liberal, Diane Marleau]

Pardon me, sir, but your five minutes are up.

[Richard Nadeau, Bloc, Gatineau, QC]

Thank you, Madam Chair.

[The Chair, Liberal, Diane Marleau]

Before continuing, I'd like to ask a few questions. Time is going by, and no one has inquired about this subject.

I want to know how much it costs you to produce a penny. Are there any discussions--and I know there have been some over the years--about getting rid of the penny and the nickel? Are there discussions about bringing forward a five-dollar coin? There have been rumours about that.

[Ian E. Bennett]

It costs us less than a penny to make a penny in Canada. In the United States it costs them more. It doesn't cost us much less than a penny to make a penny these days, but we still have positive seigniorage even on the penny, in terms of our production costs.

On the one-cent and five-cent coins, these are questions that are better addressed to the government. The government has to make the decisions about the currency, whether to continue with the penny or the nickel, and whether to have a five-dollar coin.

My personal view on it--and I don't think they can fire me for this, but you never know--is that the New Zealand guys might be on to something. I don't think it will be soon, but at some stage it might be an occasion to revamp our coinage. If we're going to get rid of the penny--I'm not necessarily advocating that, and certainly the government isn't--then maybe we want to look at the size and weight of the other coins as well and come up with a new palette of coins, as New Zealand did.

Maybe at that time the population will be more willing to consider a change. The polls that have been done show there's a great deal of uncertainty in the minds of Canadians as to whether it's a good idea to get rid of the penny. That's true in the United States as well. It remains quite a controversial subject, which the government will have to struggle with.

[The Chair, Liberal, Diane Marleau]

Mr. Goldring wants to ask a question.

[Peter Goldring, Conservative, Edmonton East, AB]

I can't remember if it was at the Canadian Mint, but there was something about a massive gold coin being struck. Was there a discussion on that? Just how many pounds would that be, and how portable would it be for me to take home a sample?

[Ian E. Bennett]

The government recently gave the Royal Canadian Mint order-in-council approval to produce a coin that would have a legal tender value of $1 million. I'm going to be a little vague here, because my marketing people want to keep it as a surprise when we unveil what this is going to look like.