Should the US dump the penny too?

Canada is phasing out the penny, with the the Royal Canadian Mint on Monday halting distribution of pennies to banks and other financial institutions. 

That means that the supply of Canadian pennies will gradually decline and eventually go the way of the dodo. But why is our northern neighbor taking the step, and should the U.S. follow in its footsteps?

Canada's reasoning is partly financially driven: Each penny costs the country 1.6 pennies to make. But Shelly Glover, Parliamentary secretary to the minister of finance, noted another couple of reasons in bidding farewell to the penny.

"They demand too much time, for too little return, of our small business owners," she said in a statement. Moreover, pennies "have sat idle for too long in forgotten penny jars and couch crevices."

That's something that most Americans can relate to. Who doesn't have a jar full of pennies sitting on a shelf? And who doesn't find their wallets bulging by the end of the month, since it seems too annoying and slow to count out cents when paying for items with cash? 

Getting rid of U.S. pennies isn't an unknown idea. There's actually a group called the Citizens to Retire the U.S. Penny, which is advocating for the cent's demise within the 50 states. Their reasons are fairly similar to Canada's penny-wise logic. 

"According to the U.S. Mint's 2011 annual report, the current cost of a penny is 2.4 cents per coin," the group's website notes. The group says that the U.S. spent almost $120 million in 2011 to produce $50 million worth of pennies. Of course, that's a drop in the bucket compared with the U.S. government's $3.5 trillion in annual spending.

So how will Canada lose its cents? Canada says consumers will still be able to redeem their pennies at banks or other financial institutions. The government also hints that Canadians may want to donate the coins to charities. 

Even though the government will stop minting the coins, they'll still maintain their value, the country's department of finance said. But it'll be up to businesses whether they want to accept pennies, it added. 

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