Canada’s $1 and $2 coins are going high-tech.
The Royal Canadian Mint has received government approval to
replace the current aureate bronze dollars and ringed bimetallic $2
coins with more advanced, lighter and cheaper replacements to save
millions and deter counterfeiting.
The new coins are expected to be released in 2012 after production
of them begins in the last quarter of 2011.
The new multi-ply plated steel coins will be similar in look and
feel to the current versions.
Planned technology to debut on the coins includes the use of a
laser engraved mark or marks on the reverse of each coin. In addition,
a “virtual image” and edge lettering will be used on the $2 coin.
The new technology will also allow the RCM to expand a metal
harvesting program that it began in 2003, pulling millions of tons of
older nickel-composition coins from circulation to be replaced with
new, cheaper coins.
Despite an initial $40 million cost to the vending industry, the
move will save a maximum estimated $16 million a year for the Canadian
government, according to RCM documents filed when the RCM sought approval.
In the request for approval, the RCM sought an amendment to the
Royal Canadian Mint Act, which governs the composition, denomination
and other specifications of Canadian coins, in order to make the changes.
The new coins will be struck from a multi-ply plated steel
composition. The replacement composition was developed by the RCM in
1999 and has been in use for most Canadian coins since 2001.
Multi-ply plated steel coins are made from steel plated with
multiple, alternating layers of copper and nickel.
The RCM said it has struck more than 6 billion 1-, 5-, 10-, 25-
and 50-cent coins in multi-ply plated steel since 2000, saving the
government approximately $250 million.
The $1 and $2 coins are the only two denominations of Canadian
coinage that RCM officials have not converted to a multi-ply plated
steel composition. However, in some instances, the RCM still issues
coins of an old alloy if it has to meet circulation needs and cannot
acquire sufficient plated steel blanks to meet demand.
Changing the alloy hedges against possible spikes in the price of
raw material used to make coins, according to the document.
“Canadian and foreign governments continue to struggle with rising
production costs for coinage, which are mainly driven by the cost of
Over the last decade, the price of nickel (for many years a major
component of most Canadian coins) has fluctuated wildly, and is nearly
1,000 percent above 2000 levels, costs that are expected to remain at
that level “through the foreseeable future,” the RCM asserts.
The $1 coin is currently composed of bronze-plated nickel or
brass-plated nickel (both alloy variations exist). New $1 coins will
have a steel core coated with multi-ply plated brass.
The current $2 coin has an aluminum-bronze center piece and nickel
outer ring. For the new $2 coin, the center piece would be
aluminium-bronze coated with multi-ply plated brass; the outer ring
would be steel plated with nickel.
The $1 coin would remain “yellow in color,” according to the RCM,
and the edge would remain 11-sided.
The $2 coin will continue to have a yellow core and an outer ring
that is white in color, but edge serrations would be thinner to allow
for the application of edge lettering.
The $1 coin, which now weighs 7 grams, will weigh 6.27 grams after
the switch, while the $2 coin, currently 7.3 grams in weight, will be
reduced to 6.92 grams.
The diameters are not expected to change.
The new security features are pre-emptive, and not a response to
any specific counterfeiting threat, according to the regulatory filing.
“Although evidence indicates that there is currently not a
security problem with non-genuine one- and two-dollar Canadian
circulation coins, these features will enhance the security of the new
coins,” according to the RCM.
“The new features present a major deterrent to forgers trying to
duplicate them as it would require a significant capital investment
along with strong technical knowledge to effectively operate the process.”
The new laser-mark, virtual images and edge lettering features
will allow for a visual authentication of the new $1 and $2 coins, and
the cost to produce such features would result in it being prohibitive
for counterfeiters to duplicate, according to the RCM.
Another deterrent to counterfeiting will be the unique EMS, or
“electromagnetic signal,” of both coins.
That change is not without cost.
The RCM acknowledges that introducing the new coins will require
the vending industry to spend an estimated $40 million to recalibrate
their automated coin-acceptance equipment to read the new coins and
still accept the old versions, but that “as part of the industry’s
capital planning, such updates already occur on a somewhat regular basis.”
The cost estimate is based on $300 for recalibrating older
machines and $100 for newer machines. Any new machines purchased after
the new coins make their debut would already come equipped to accept
the new coins.
The cost is a one-time charge, the RCM is quick to note, adding
that “the vending industry represents less than one percent of total
retail trade. The cost savings to the remainder of the Canadian public
as well as the added qualitative environmental and security benefits
outweigh the calibration costs to the vending industry, which should
already be part of their routine capital planning process.”
The RCM has been working with vending industry representatives for
months to keep them aware of the changes.
Their efforts include presenting sample tokens to the Canadian
Automated Merchandising Association’s members.
Representatives of vending and other coin-operated industries will
receive examples of the new coins six months before the coins would
begin circulating for final testing and equipment calibration.
Melting old coins
In addition to deterring counterfeiting, the unique EMS also
allows the RCM to expand its metal harvesting program because
equipment will allow the old coins to be sorted from the new,
according to the RCM.
Millions of pounds of older, nickel-based Canadian coins have been
withdrawn from circulation in the Alloy Recovery Program, which began
in 2003 and generates millions of baseline revenue for the Mint.
The new coins will not pose a problem to those with limited or no
vision, according to the documents.
The new $1 and $2 coins would be produced along with other
circulation coins at the RCM’s Winnipeg Mint. ■