TORONTO — EIGHT years ago, Canada minted a $1 coin, nicknamed the "Loony," for the loon embossed on one side. This week, the country rolled out a $2 coin. The question is: Will Canadians call it a "toonie" or a "doubloon"?
The coin will gradually replace the country's $2 bill, which, unlike its counterpart in the United States, actually gets used. The new coin is two-toned, with a gold center and a silver rim. It has a polar bear on one side and the head of Queen Elizabeth II, who is still Canada's official head of state, on the other.
The reason for changing the bill for the coin is simple. Money. The government estimates it will save $12.5 million a year (Canadian; US$16.8 million). While the coin costs 16 cents to mint versus 6 cents for the bill, the $2 bill lasts only one year versus 20 years for the coin.
Much more than the annual savings to the Royal Canadian Mint is the windfall profit to the federal treasury. When the Mint sends out the coins to the banks, it receives $2 for each from the bank, trust company, or credit union. Since the cost of production is just 16 cents, it leaves the mint with a one-time profit of $1.84.
The federal government hopes to have as many as 60 million of the coins in circulation by the end its fiscal year in March. That is an unexpected bonus of $110 million, which the finance minister, Paul Martin, says will go straight against Canada's budget deficit.
Over the next 18 months, the government expects to issue as many as 300 million $2 coins. The 250 million $2 bills now in circulation should be gone in six months. Commercial banks are collecting the bills and returning them to the central bank for shredding.
One problem for the new $2 coin could be vending machines and parking meters: The coin is too big to fit into the slots.
The vending machines have just adjusted to the $1 dollar coin. An official of the Mint in Ottawa says the coin was designed with the help of people from the vending-machine industry.