Steel yourself, Canada, new one-dollar and two-dollar coins are about to become the latest version of the proverbial plugged nickel.
In an effort to save taxpayers about $16 million annually, new versions of the loonie and toonie will be introduced this spring made from steel, replacing the more expensive nickel found in the current versions of the coins.
A detailed summary of the change filed by the federal government in the Canada Gazette last month says the new coins will be slightly lighter, cheaper to produce and ship, and harder to counterfeit.
They're also going to cost Canada's coin-operated industries about $40 million in recalibration costs to make vending machines recognize the new coinage, says the government.
And businesses who count their coins by weight will have to first separate the old currency from the new.
The new coinage was announced in last year's federal budget but only received final cabinet approval late last month.
The roll-out has been delayed in part because some manufacturers in the vending industry weren't ready to handle the new coins, according to Kim Lockie, the past president of Canadian Automatic Merchandising Association.
"It only delayed it, it didn't postpone it," said Lockie, a Fort McMurray, Alta., businessman whose company has 1,200 machines that required reprogramming — a three-month project.
"We just have to be ready as operators to be able to accept that."
Lockie, who spent last year as his industry association president dealing with the mint, said operators never like eating the cost of currency changes, but the process has been handled well by the government.
"It's going to happen anyway so if we can partner we can both come out ahead — I can have ample leeway time to get my machines programmed," he said in an interview.
The Canada Gazette says the current coins cost about 30 cents each to produce, while Kim says he's been told the new loonies and toonies will cost between four cents and six cents apiece.
A spokesman for the Royal Canadian Mint had little so say, because a major media roll-out is planned nearer to the coins' actual release. Alex Reeves did confirm the new coins are about to go into production and should be in circulation in "early spring" — likely late March or April.
When the new coins were first proposed, the expectation was that they would weigh exactly the same as the old versions.
Consumers likely won't notice the weight difference, but the Canada Gazette states that a truck load of the new loonies will weigh 980 kilos less than the old version, and 286 kilos less for a truck full of toonies, thus "improving fuel efficiency of transportation and reducing the carbon footprint of delivering coins to the Canadian public."
More than one billion loonies have been produced by the Royal Canadian Mint since the coin was introduced in 1987, while some 700 million toonies have been minted since 1996.
The mint produces about 30 million of each coin annually, and the government says the elimination of the nickel element will reduce nickel demand by about 539 metric tonnes a year — just a tiny fraction of Canada's domestic output.
The current loonie is made from bronze-plated nickel, while the toonie has a ring of pure nickel around a copper alloy centre. The new coins will use the same multi-ply plated steel technology used in the penny, nickel, dime and quarter.
The change comes as nickel prices have fluctuated by as much as 1,000 per cent in recent years, according to the government, creating both supply and cost issues.