Irshadgul News report,
Calgary –
Whether they’re rolling around in your car’s cup holder or permanently banished to a couch cushion, coins can be easily taken for granted.
So when the Royal Canadian Mint announced layoffs at its Winnipeg facility last month, it was a reminder that our pocket change doesn’t come by magic. Those loonies and toonies and quarters and dimes are produced by the Mint, a Crown corporation that produces all of Canada’s circulation coins from a state-of-the-art facility in Manitoba’s capital.
Mint believes it is a mission that is still important, even as society’s transition towards digital payments accelerates. The Mint – which also produces international coins for dozens of other countries – has said it believes its recent layoffs will be temporary, and that “the pandemic and ongoing geopolitical tensions” disrupting global markets. 56 job losses have been attributed to the “long-term effects of instability”.
But Mary LeMay, president of the Royal Canadian Mint, acknowledged in an interview that there are also long-term strains on the corporation and its product. Since February 2013, when the mint stopped producing pennies due to rising costs relative to face value, overall demand for Canada’s other circulation coins has declined by about eight per cent per year, she said.
LeMay, who prefers the term “cash-lite” rather than “cashless”, said that even though the Mint’s Winnipeg facility still produces about one billion circulation coins annually, today’s economy is dominated by electronic transactions. cannot be denied.
“It is fair to say that we are moving towards a world where we are going to see increasing digital payments,” Lemay said.
But she said the Mint, which still employs about 350 people at its Winnipeg production center, is planning to transition. She said that the corporation’s goal is not to produce for production’s sake, but to ensure that there are always enough coins to meet demand.
“Our goal is to make sure that we are always making sure that people who want to use the coins are able to do so, when and where they want.”
However, knowing how much is enough has been a challenge in recent years. During the COVID-19 pandemic, as businesses closed their physical doors and Canadians shifted their shopping online, there was an immediate and dramatic impact on coin demand.
“In 2020, we see a 37 percent drop in demand,” Lemay said. “Now it’s starting to come back. But the question we still don’t have the answer to is how far it will go.”
Most data suggests that physical currencies won’t be disappearing anytime soon. While three-quarters of Canadians agree that society will increasingly move away from cash and coins in favor of digital payments in the future, according to a recent survey by Mint, Canadians also value access to physical money. Are. Two-in-three Canadians surveyed reported using cash within the past month.
Irwin Lipnowski, associate professor of economics at the University of Manitoba, said he thinks there will always be some level of demand for the currency.
“I don’t think there will be a case for people only using cards,” Lipnovsky said.
“A lot of people like the idea that they’re paying cash, and they’re using this currency and a way to make sure it’s not counterfeit.”
Low-income Canadians, as well as those living in rural and Indigenous communities, are more likely than urban Canadians to have access to physical money, Lemay said – which is where the Mint’s role as a manufacturer of coins becomes limited. Not in India, but as manager of the country’s coins. Supply arrives.
LeMay noted that unlike the mints of most other countries, the Royal Canadian Mint is also tasked with managing the national coin catalog and ensuring the coins are minted. The corporation works with armored car carriers and financial institutions to understand both current and future demand.
LeMay said, “We have a view of where coins are across the country, and we’re able to predict that. We’re able to move coins … and that allows us to have very efficient coin production.” “
He added that this end-to-end oversight of the national catalog has helped address some of the problems other countries are facing with their coin supply during the pandemic.
For example, the US has repeatedly dealt with coin “shortages”, the result of coins getting “stuck” in the system and failing to circulate through the economy during times of business closures and increased online payments.
LeMay said the overall demand for coins is essentially declining, getting coins into the hands of people who still want to use them — especially in remote and rural areas with limited banking access and inconsistent internet connectivity — and will also become important.
He added that recent events, such as the Rogers outage last summer that took down the Interac payment network, have proven the value of a reliable physical currency. He added that the Royal Canadian Mint is equipped to scale back very quickly should there be a dramatic increase in demand for cash due to a natural disaster or other unforeseen event.
“I think coins and digital payments will co-exist for the foreseeable future, so we have to find a way to do this seamlessly,” LeMay said.
“Should we, for whatever reason, need to produce more coins, we have the ability to do so.”
This report by The Canadian Press was first published on March 10, 2023.