Canada’s nickel could be going extinct just like the penny, and very soon too.
Hendrix Vachon, a senior economist at Dejardins, says that the five-cent coin is becoming increasingly useless due to its low purchasing power and that it will soon be impractical to continue producing it.
The rationale behind the phase out regards a gradual increase in the cost of living and the fact that a majority of people rely on bills or digital methods to make payments.
Over ten years ago, New Zealand got rid of its five-cent coin and it made cash payments much more efficient. If Canada were to follow through with the phase out, all cash payments would have to be rounded up to the nearest 10 cents.
The quarter would also become less important. Vachon says the country to switch to 10-cent, 20-and 50-cent coins as they would have much greater relevance in cash payments.
As technology advances, a cashless society could eventually be the reality anyway.