Canada’s new lighter weight $1 and $2 coins are due to enter
circulation in early 2012, after receiving final governmental approval
The notice of approval was published Jan. 4 in the Canada Gazette.
The new multi-ply plated steel coins will be similar in appearance
and feel to the current versions.
Though largely driven by the potential to save millions annually,
the changes are coming hand-in-hand with the development of new
anti-counterfeiting technology by the RCM.
Planned anti-counterfeiting technology to make its debut on the
coins includes the use of a lasermark maple leaf on the reverse of
each $1 coin and two “virtual image” maple leafs “between two lines at
the top of the coin and the words CANADA and 2 DOLLARS interspersed
with two lasermark maple leaves each within a circle at the bottom of
the coin.” In addition, edge lettering of CANADA and 2 DOLLARS, with a
maple leaf flanking each side of CANADA, will be used on the $2 coin.
RCM Senior Manager of Communications Alex Reeves declined to
answer questions about the timing of the coins’ release, the RCM’s
cooperation with Canadian vending officials and how the new coins
affect the RCM’s relationship with blank provider Jarden Zinc in
Greeneville, Tenn., which expanded its facility in 2011 to service
global plated coinage demand. The firm has produced blanks for
Canada’s dollar coins since 2005 and will be retained as a secondary
source of supply for the multi-ply plated dollar blanks.
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 for
retrofitting equipment, the move will save a maximum estimated $16
million a year for the Canadian government, according to RCM documents
filed as the RCM sought approval, for a present value of $107.5
million over 10 years.
That estimate of savings is based on a projected demand of 30
million coins of each denomination for each of the next 10 years, with
some of the production needed to replace coins that are withdrawn from
circulation and melted through the metal harvesting program. The RCM
reported in the 2010 annual report that using a multi-ply plated steel
blank for the $1 coins would save 30 cents per coin.
In the request for approval, the RCM sought and received an
amendment to the Royal Canadian Mint Act, which governs the
denomination, composition 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.
The dollar coin is currently composed of bronze-plated nickel or
brass-plated nickel (both alloy variations exist). New dollar 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 will be composed of
aluminium-bronze coated with multi-ply plated brass; the outer ring
will be steel plated with nickel.
The dollar coin will remain “yellow in color,” according to the
RCM, and the shape will 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 will be thinner to allow
for the application of edge lettering.
The dollar 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 RCM is using the introduction of new money-saving alloys as
also an opportunity to bolster the $1 and $2 coins against the
ever-growing threat of counterfeiting. The new security features are
pre-emptive, and not a response to any specific counterfeiting threat,
according to the regulatory filing.
“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,” according to the RCM.
The new lasermark, 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,
“electromagnetic signal,” of both coins. That change is not without
cost to operators of coin acceptance machines.
The RCM acknowledges that introducing the new coins will require
the vending industry to spend an estimated $40 million Canadian to
recalibrate 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 each older
machine and $100 for each newer machine. Any new machines purchased
after the new coins are introduced would already be equipped to accept
the new coins.
The RCM has been working with vending industry representatives
since 2009 to keep them aware of the changes. RCM efforts include
presenting sample tokens to the Canadian Automated Merchandising
Association’s members on multiple occasions, including sending out
samples of the new coins in April 2011.
In addition to deterring counterfeiting, the unique EMS also
enables equipment to sort the old coins from the new, allowing the RCM
to expand its metal harvesting program, 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.
More than 1 billion dollar coins and more than 700 million $2
coins are in circulation, according to the RCM, offering a huge supply
of metal to be melted.
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 will be produced along with other
circulation coins at the RCM’s Winnipeg Mint, and their lighter weight
means savings in transportation costs. ■