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Canada kills the penny in surprise budget announcement

Canada revealed today that it will end production of the penny this year, as detailed in the government's 2012 federal budget.

Canada kills penny 20120330Enlarge
Reportedly due to manufacturing costs, the US Mint may be contemplating discontinuing the penny. On March 29, 2012, Canada announced in its federal budget that it will be ending production of the penny. (Tim Boyle/Getty Images)

Canada has killed the penny.

Production of pennies will end this spring, the Canadian government announced in its 2012 federal budget unveiled Thursday.

Budget documents described the penny as "more of a nuisance than a useful coin," the Canadian Press reported.

And what's more, each penny costs 1.6 cents to produce.

“Pennies take up too much space on our dressers at home,” finance minister Jim Flaherty told the Commons, according to The Globe and Mail newspaper. “They take up far too much time for small businesses trying to grow and create jobs.”

Pennies will still be legal tender, but will slowly disappear from circulation, the CP said. Canadians will have to get used to rounding off cash transactions to the nearest nickel.

The last penny will be minted in April, and the Royal Canadian Mint will stop distributing pennies in the fall of 2012, the Globe said.

Bloomberg reported that withdrawing the penny from circulation will save taxpayers about $11 million each year.

More from GlobalPost: Obama targets pennies and nickels to trim costs

The Royal Canadian Mint has produced 35 billion pennies since it began production in 1908, Bloomberg said.

The Canadian mint described the end of the penny in rather obtuse and bureaucratic terms:

"In Economic Action Plan 2012, the Government of Canada has announced that it will modernize Canada’s currency set by eliminating the penny from Canada’s coinage system," the mint said in a statement.

RIP, Canadian penny.

More from GlobalPost: Millions in Canadian coins, candy spill after truck crash (VIDEO)

Canadian Committee Recommends Axing the Penny
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http://www.globalpost.com/dispatch/news/regions/americas/canada/120329/canada-kills-penny-canadian-pennies-federal-budget