Finance put out a press release today announcing “Phasing out the penny ... In Economic Action Plan 2012, the Government announced it would phase out the penny from Canada’s coinage system. To help consumers, businesses, charities and financial institutions to plan, a transition date of February 4, 2013 has been set after which the Royal Canadian Mint will no longer distribute pennies. On this date, businesses will be encouraged to begin rounding cash transactions.” I know the whole penny discussion can result in lots of jokes - I will not at this point oblige. I will just remind Finance that the charity sector has revenue of approximatley $207 billion according to the 2010 T3010 information. Fundraising revenue is around $13 billion. Canadian charities receive about $130 billion from various levels of government. If government cuts its support of the charity sector by say 10% of revenue (ie. 13 billion) it will require that charities fundraise 100% more than they fundraise right now to make up the difference. Not much likelihood of that. In other words the charity sector needs long term, predictable, stable and accessible government funding. Yes that is in addition to the pennies!
Here is the press release on “Phasing out the penny”
Here is more information for charities and the penny:
“Frequently Asked Questions: Charities
Why should charities take an interest in the phase out of the penny?
The redemption of pennies presents a fundraising opportunity for charities.
Experience elsewhere has shown that charities can benefit by getting involved in the process of withdrawing low-denomination coins from circulation.
The Government encourages Canadians to consider donating pennies to charities. Charities are welcome to take advantage of the initiative to increase their fundraising through penny drives.
What do charities need to do if they want to host a penny campaign?
Charities should consult their financial institutions before starting any fundraising campaigns related to the phase out of the penny to determine best practices for collecting and redeeming the coins. This will ensure charities and financial institutions are well-prepared to manage a potentially large volume of pennies, and will ease the reimbursement once the campaign is complete.
Are financial institutions required to accept pennies?
The Government expects that financial institutions will facilitate the process of penny redemption by accepting pennies. Financial institutions may wish to support charity initiatives by providing guidance on how best to redeem pennies. The Government recommends that charities consult their financial institutions before starting any fundraising campaigns related to the phase out of the penny.
Will charities need to roll all of their pennies?
Financial institutions are best placed to provide guidance to charities on whether or not pennies must be rolled.
How long will charities have to turn in their pennies?
The penny will retain its value indefinitely. As such, there is no time limit for redeeming pennies. Charities should consult their financial institutions before starting any fundraising campaigns related to the phase out of the penny to determine best practices for collecting and redeeming the coins. “
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.