Calgary –
Whether it’s rattling around in your car’s cup holder or disappearing forever into the cushions of your sofa, coins are easy to take for granted.
So when the Canadian Mint announced a series of layoffs at its Winnipeg facility last month, it served as a reminder that the pennies jingling in our pockets don’t magically get there. These Loonies and Toonies, as well as Quarters and Dimes, are produced by the Mint, the crown corporation that produces all of Canada’s circulating coins from his one state-of-the-art facility in Manitoba’s capital city.
This is a mission that the Mint still believes is very important, even as society’s transition to digital payments accelerates. The Mint, which also produces international currency for dozens of other countries, said it believed the recent layoffs were temporary, adding that the loss of 56 jobs was a “due to the pandemic and ongoing geopolitics.” The long-term effects of academic instability are disrupting global markets.
However, Marie LeMay, president of the Royal Canadian Mint, admitted in an interview that there is long-term pressure on the company and its products. Since it stopped producing the coin, overall demand for other coins in circulation in Canada has fallen by about 8% annually, she said.
Lemay, who prefers the term “cashlight” to “cashless,” said that despite the fact that the Mint’s Winnipeg facility produces about one billion coins in circulation annually, electronic transactions are dominating in today’s economy. He said that there is one thing that cannot be denied.
“It is no exaggeration to say that we are moving into a world where digital payments are on the rise,” said Lemay.
But she said the Mint, which still employs about 350 people at its Winnipeg production center, is planning the transition. She said the company’s goal is not to produce for production’s sake, but to always have enough coins to meet demand.
“Our goal is to make it possible for anyone who wants to use their coins to use them anytime, anywhere.”
However, knowing enough quantity has been a challenge in recent years. During the COVID-19 pandemic, there was an immediate and dramatic impact on coin demand as businesses closed their physical stores and Canadians moved their purchases online.
“In 2020, we saw a 37% drop in demand,” said Lemay. “Now it’s starting to recover. But the question we don’t have an answer for yet is how long it will last.”
Most data suggests that physical currencies are not going away any time soon. According to a recent survey conducted by the Mint, three-quarters of his Canadians agree that society will move further away from cash and coins in the future in favor of digital payments, but the Canadian We also value access to physical money. Two of his three Canadian girlfriends surveyed reported using cash in the last month.
Irwin Lipnowski, an associate professor of economics at the University of Manitoba, said he believes there will always be some demand for currency.
“I don’t think we’re going to see people using only cards,” Lipnowski said.
“A lot of people like the idea that they’re paying in cash, they’re using this currency, and they have a way to ensure it’s not being counterfeited.”
Low-income Canadians, as well as those living in rural and Indigenous communities, are more likely to use physical money than urban Canadians, LeMay said. Supply, enter.
Unlike most other national mints, the Royal Canadian Mint is also tasked with managing the national coin inventory and ensuring that coins get where they are needed, LeMay said. The company works with armored car carriers and financial institutions to understand current and future demand.
“We know where the coins are all over the country and we can predict them. will be,” LeMay said.
End-to-end monitoring of the country’s inventory has helped avoid some of the problems other countries have encountered with coin supplies during the pandemic, she added.
The United States, for example, has dealt with recurring “shortages” of coins. This is a result of business closures and an increase in online payments causing coins to become “stuck” in the system and unable to circulate through the economy.
Lemay said that as the overall demand for the coin inevitably declines, the coin will likely find its way into the hands of those who still want to use it, especially in remote and rural areas with limited access to banks and unstable internet connections. He said it would be even more important to deliver
She added that recent events, such as the Rogers outage last summer that brought down the Interac payment network, have proven the value of a reliable physical currency. She said the Royal Canadian Mint stands ready to scale up very quickly if natural disasters or other unforeseen events lead to a dramatic increase in demand for cash.
“I think coins and digital payments will coexist in the near future, so we have to find a way to make that happen seamlessly,” LeMay said.
“If for some reason we need to produce more coins, we have the ability to do it.”
This report by the Canadian Press was first published on March 10, 2023.
