Last week, the federal government announced it is planning to change the composition of Canadian $1 and $2 coins by using a "less expensive patented multi-ply plated steel technology." Under its plans outlined in Budget 2010, The Mint estimates the new technology to make them, will cut production costs significantly, saving up to $15 million a year. Furthermore, The Mint claims its new coins will work in vending machines. 

CAMA believes both claims are misleading. As importantly, the $15 million the federal government estimates it will save is just a fraction of the extra costs that will ultimately be borne by Canadian businesses and consumers. In addition, local governments will be forced to bear the financial burden related to the conversion of municipally owned and operated parking and transit equipment. 

"Although CAMA appreciates the Royal Canadian Mint's cost saving efforts, we are concerned with its negative impacts on the coin acceptance industry in Canada," said Kim Lockie, President, Canadian Automatic Merchandising Association. "This change delivers no financial benefits to our industry, but rather will add significant expenses to not only our members, but to all Canadian businesses that rely on automatic coin acceptance. Transit authorities, parking lot operators, municipalities, amusement machine owners, retail kiosks, carwash operators, laundry machine operators, toll authorities and lottery associations are just some of the industries that will be negatively affected."

Industry experts agree The Mint's new multi-layer plating technology will cause coin acceptance issues as a result of the not-so-subtle differences between the new steel core coins and Canada's existing coins which have worked flawlessly in vending machines. The result - lost revenue as well as increased service costs for automated vending machine operators nationwide. CAMA estimates this conversion will cost its members significant time and financial resources in bearing the costs associated with software and hardware upgrades.