The federal government has given a penny for the thoughts of small businesses and retailers concerned that the planned elimination of Canada’s one-cent coin would disrupt the busy holiday shopping season.

The penny is being given an extended lease on life and will not be removed from circulation until February 4, 2013, the federal finance ministry announced Monday. The government originally planned to stop distributing the penny to banks and other financial institutions in the fall of 2012.

“The revised date was set following initial consultations with small business and retailers who requested the transition date occur after the busy holiday shopping season,” the ministry said in a release. “This will ensure all those participating in the transition will have ample time to prepare their business, train staff, and better inform consumers. It will also allow charities to hold dedicated ‘penny drive’ campaigns outside of existing fall fundraising drives.”

Last May, Finance Ministry Jim Flaherty operated the machine that stamped the last penny made at the Royal Canadian Mint in Winnipeg. The government had announced that it would phase out the penny in its March budget.

“Setting a clear transition date will allow consumers, businesses, charities and financial institutions to plan accordingly in the lead-up to February,” said Flaherty in a statement.

The cost to produce a new penny was about 1.6 cents, making its continued production unfeasible. The savings to taxpayers by eliminating the production of the coin are estimated to be about $11 million per year.

Once the penny stops active circulation — it will remain legal tender — businesses will be expected to round prices on cash transactions to the nearest five cent increment. Transactions with debit and credit cards, as well as cheques, will still be calculated to the cent.

The government estimates that over the past five years, 7,000 tonnes of pennies were produced and distributed annually from the Mint’s plant in Winnipeg.

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