Canadians seem to find the penny to be less useful than other coins, according to a recent survey by Desjardins Group.

Overall, it seems that the lower a coin’s value, the less often it is used for purchases. For example, while 66% of Canadians use $1 and $2 coins, that figure drops to 58% for quarters, 50% for dimes and nickels and only 37% for pennies.

When the data is segmented by province, it seems that 40% of Ontarians still use pennies, followed by Quebecers at 39%, residents of Western provinces at 37%, and residents of Atlantic Canada at 35%.

Most respondents (56%) say that they collect pennies to deposit or spend at a later date, or to give them to others (children, church, charities).

This data confirms the analysis of Desjardins Group economists who, in a study released today, propose to withdraw the penny, pointing to other countries, such as Australia and New Zealand, that have already successfully removed their one-cent coins from circulation. In fact, New Zealand has even removed its two- and five-cent coins.

According to Desjardins economists, there are about 20 billion pennies in circulation – close to 600 per Canadian. Regardless of this fact, between 2001 and 2005, the Canadian government has issued an average of approximately 816 million pennies per year. This would prove that, although the coin has lost the vast majority of its purchasing power, consumers tend to hoard pennies or even throw them away, rather than depositing them and putting them back into circulation. Furthermore, the penny is now worth only 5% of its initial value (or 20 times less), whereas workers earn 100 times more than they did a hundred years ago when the penny was first introduced.

Based on various analyses, the economists estimate that keeping pennies in circulation when it appears people are no longer interested in receiving or using them, costs Canadians approximately $130 million per year in production, storage, transportation and various costs. “In a globalized economy such as ours, there are no small economies to help us reduce our costs and be more competitive”, said François Dupuis, vp and chief economist at Desjardins’ Economic Studies Department, and one of the authors of the study.

Dupuis also believes that removing the penny from circulation would not result in increased prices. “Cash transaction amounts would be rounded symmetrically to the nearest 5¢.”

The poll, carried out in 2006, surveyed 658 people from Quebec and Ontario, as well as the Atlantic and Western provinces with a margin of error estimated at +/- 4.0%, 9.5 times out of 10.