that I stored and forgot about.) Some countries that use the Euro have also experimented with rounding rules to eliminate the need for a physical coin under 2 cents. Inflation from a round-up of prices is unknown and depends on how firms generally set profit-maximizing prices, price elasticity and the reality of increasing prices. The graph here shows the inflation rate in Canada monthly since January 2012 and the date the Canadian penny went away, compared to inflation in the United States in “core” forms, consumer inflation in each country, less food and energy products and services. The discussions and the upcoming policy change have sparked debate among economists about the inflationary implications of pricing in multiples of 5 cents versus 1 cent, as well as the potential efficiency gains. Below is a summary of the considerations to date, and also the possible implications for the North Bay. n Should not be much pressure in the short term on taxable sales or merchants' pricing lists and restaurant menus generally. n When pressure comes, it will be (as an indirect tax when rounding up happens) falling on smaller businesses and lower- income households. This puts another bit of marginal pressure on rental vacancy and wage pressures to keep up with these price changes. With experiments in Canada suggesting little effect over time, the
supposition is that the effects, nationally and locally, will be small, but another small way to pressure lower-income households. Watch for small effects and rounding phenomena to emerge where policy is more pennywise than pound- foolish. g
Dr. Robert Eyler is professor of economics at Sonoma State University and president of Economic Forensics and Analytics in Sonoma County.
In celebration of NBb’s 50th anniversary, here’s a photo of a young(er) Robert Eyler circa 1990s.
December 2025
NorthBaybiz 19
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