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Canada ditches the penny

globaltvedmonton.com

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Re: Canada ditches the penny

#31

Post by quink »

seanmccann wrote: post #6

If the customer has the pennies, they can use them. Payments with debit or credit cards, or cheques, can also be to the penny. But if the customer is paying cash and doesn't have the pennies, the total will go up or down to the nearest nickel. For example, $1.02 will become $1 and $1.03 will be $1.05. Something just feels wrong about rounding. The customer would always get screwed. They should solve this problem by u…

> They should solve this problem by using the federal sales tax to round up/down. $1.25 + 5% = 5¢ of tax instead of 6.25¢.

I see nothing but confusion there.

$1.25 + $0.05 = $1.30. After rounding, $1.30.

$1.25 + $0.0625 = $1.3125. After rounding, $1.30.

> It would be a tiny incentive to use cash rather than credit cards (which cost the merchant 2-4%)

Dealing with cash instead of credit cards is also a similarly percentaged inconvenience - that's why they're getting rid of the penny in the first place!

Re: Canada ditches the penny

#32

Post by excuse-me »

brunoqc wrote: post #16
UnFleshedOne wrote: post #9

Earlier quoted context omitted.

No, the prices are before tax. I think there is even a law against showing prices with tax for whatever reason.

I thought they don't include tax so they don't have to change it every time the tax rate change.

Showing before tax prices (almost) makes sense in the US where every other street has it's own local tax rates. But Canada only has federal and provincial taxes so I suspect it's just to make the price look better - especially if you are comparison shopping with the US

Re: Canada ditches the penny

#33

Post by mcantelon »

dstein wrote: post #30
mmastrac wrote: post #3

This line-item is basically a smokescreen for cutting all sorts of other important things (like the research tax credit, SR&ED; various social programs; the budget for our national broadcaster, the CBC; and the salary of the Chief Electoral Officer): http://www.reddit.com/r/canada/comments/rjrfn/the_budget_5_b... Amusingly this particular cut was actually a private member proposal from the NDP (the left-most mainstre…

from reddit: SR&ED is [reorganized.] Whew, so it's not completely axed. If anything Canada needs significantly more investment and tax programs like this. Brain drain has always been a problem for Canada because of the lack of investment from the government and the lack of tech-oriented VC.

From skimming the news it seems like it's cut significantly.

>The changes include a cut in 2014 to 15 per cent from 20 per in the tax credit rate and a restriction on which expenditures count toward the credit. For example, capital expenditures – buildings, equipment and product prototypes – will no longer be eligible. The amount of eligible overhead expenses and subcontracted R&D will also be reduced.

http://www.theglobeandmail.com/report-on-business/economy/gr...

Bad news for Canada's tech innovators.

Re: Canada ditches the penny

#34

Post by baltcode »

This is simply patching over the underlying problem - dilution in the money supply. There is no reason why countries like the US and Canada who have only become a lot wealthier in the last 200 years should have such inflation. Stop printing money, and the penny will remain valuable!

Re: Canada ditches the penny

#35

Post by ced »

dfc wrote: post #29
ced wrote: post #25

Earlier quoted context omitted.

Moreover one of the best things for consumers was when the stock market changed quotes from fractions to cents. Why?

Because it gave an advantage to market makers and large institutional traders. I can look for some of the research if you are interested... This is from the SEC at the time: http://www.sec.gov/news/testimony/ts092000.htm It should be a good starting point if you are interested. There was also a NYT article that was very succinct but I can not find the citation at the moment. EDIT: I'm at a loss for why this was downv…

I still don't understand how that is a win for consumers. If anything, my limited experience with the stock market tells me that market makers and HFT have been stealing cents on most transactions made by individuals since we've made the switch.

Re: Canada ditches the penny

#36

Post by cperciva »

dstein wrote: post #30
mmastrac wrote: post #3

This line-item is basically a smokescreen for cutting all sorts of other important things (like the research tax credit, SR&ED; various social programs; the budget for our national broadcaster, the CBC; and the salary of the Chief Electoral Officer): http://www.reddit.com/r/canada/comments/rjrfn/the_budget_5_b... Amusingly this particular cut was actually a private member proposal from the NDP (the left-most mainstre…

from reddit: SR&ED is [reorganized.] Whew, so it's not completely axed. If anything Canada needs significantly more investment and tax programs like this. Brain drain has always been a problem for Canada because of the lack of investment from the government and the lack of tech-oriented VC.

I was hoping for SR&ED to be completely axed. It's a huge monstrosity of paperwork, to the point that small businesses pay 30% of their tax credits to consultants who fill out the forms for them and large businesses hire teams of people for the sole purpose of tracking and classifying SR&ED expenses so that the tax credits can be claimed. I suspect that Tarsnap is eligible for some SR&ED credits, but it's simply not worth the time and headaches it would cost me to claim them.

If Canada wants to encourage innovation, they should set up a system which rewards people for doing new and innovative things, not a system which rewards people for being good at filling out forms.

Re: Canada ditches the penny

#37

Post by maaku »

_frog wrote: post #24
taitems wrote: post #20

Just as a point of interest, Australia removed the 1 and 2 cent coins from circulation back in 1992. Prices have been rounded to the nearest 5 cent value when paying with cash ever since. A comment on this thread said that it's madness, but it's all someone my age has grown up with.

As a fellow Australian the pennies aren't what I found most bizarre about US and Canadian currency, I more often found myself getting tripped up by the fact that listed prices in US and Canadian stores never include sales tax.

At least in the US, sales tax is assessed locally, so it can vary even within a particular region. Dealing with fixed prices and additional sales tax is the only reasonable way to run a business that crosses multiple localities.

Re: Canada ditches the penny

#38

Post by cperciva »

_frog wrote: post #24
taitems wrote: post #20

Just as a point of interest, Australia removed the 1 and 2 cent coins from circulation back in 1992. Prices have been rounded to the nearest 5 cent value when paying with cash ever since. A comment on this thread said that it's madness, but it's all someone my age has grown up with.

As a fellow Australian the pennies aren't what I found most bizarre about US and Canadian currency, I more often found myself getting tripped up by the fact that listed prices in US and Canadian stores never include sales tax.

When Canada introduced its federal Goods and Services Tax in the early 1990s, the government wanted to have it included in advertised prices; but under Canada's constitution the regulation of business advertising is a matter of provincial jurisdiction, and the provinces didn't want to play ball.

Re: Canada ditches the penny

#39

Post by mindslight »

msbarnett wrote: post #4
kitcar wrote: post #2

I wonder how this will affect sales taxation, as the tax rate isn't a multiple of 5 in all provinces, and hence the amount of tax collected on a purchase will have to be either be rounded down or up.

"If the customer has the pennies, they can use them. Payments with debit or credit cards, or cheques, can also be to the penny. But if the customer is paying cash and doesn't have the pennies, the total will go up or down to the nearest nickel." I gather that's post application of sales tax.

Presuming a uniform distribution of price endings, existing pennies are then worth 1.43 cents (you only spend them when the price is congruent to (0.03 or 0.04) mod 0.05).

Re: Canada ditches the penny

#40

Post by waqf »

sanswork wrote: post #19
seanmccann wrote: post #6

If the customer has the pennies, they can use them. Payments with debit or credit cards, or cheques, can also be to the penny. But if the customer is paying cash and doesn't have the pennies, the total will go up or down to the nearest nickel. For example, $1.02 will become $1 and $1.03 will be $1.05. Something just feels wrong about rounding. The customer would always get screwed. They should solve this problem by u…

They don't have pennies in Australia and they just round up or down to the nearest 5c interval. I assume they will do the same in Canada.

To be precise, that's only true if you pay in cash. Pay with plastic in Australia and you're charged by the cent.
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