Article content

OTTAWA, Ont. — The demise of Canada’s one-cent coin next year will cost taxpayers a pretty penny.

Finance Minister Jim Flaherty announced the impending withdrawal of the penny in last March’s budget, saying the government would save $11 million a year in production costs.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Demise of Canada’s one-cent coin to cost taxpayers a pretty penny Back to video

That’s because production of each one-cent coin had cost the Royal Canadian Mint about 1.6 cents.

But a new analysis of costs shows that redeeming the mountain of circulating pennies beginning Feb. 4 will cost taxpayers about $7.3 million a year.

The analysis projects a net cost of about $38.3 million to redeem some six billion pennies expected to be turned in by consumers and financial institutions over the next six years.

Costs include $53 million expected to be paid out to redeem the face value of the coins, as well as another $27 million in handling and administration costs by the Royal Canadian Mint.

Recycling the zinc and copper from melted-down pennies will bring in about $42.5 million in revenue, leaving government in the red at just over $38 million.