A recent study indicates the popularity of the Canadian nickel or 5-cent coin appears to be decreasing.

One sign of inflation is when small denomination coins and bank notes are discontinued, while higher denominations may be introduced. The United States has tenaciously been holding on to our 1-cent coin, grudgingly allowing a dollar coin to circulate simultaneously alongside the dollar bill and resisting issuing bank notes in excess of $100 face value.

In modern history Canada has been more practical. It wasn’t always that way. Canada introduced its large cent in 1858, reducing the diameter of its cent in 1920, then abolishing the denomination in 2012. In comparison the United States ceased issuing large cents in 1857, continuing to strike the small cent to this day. Canada introduced a silver 5-cent coin in 1858, then changed to a nickel 5-cent piece in 1922. The United States stopped issuing silver 5-cent coins (the half dime) in 1873, having introduced the nickel 5-cent coin in 1866. Canada introduced its silver dollar in 1936, one year after the U.S. ceased producing silver dollars.

Times have changed. Canada no longer issues a 1-cent coin; however, it was quick to drop its dollar bill in favor of a dollar coin nicknamed the Loonie in 1987. A $2, or Twoonie, coin replaced the Canadian $2 bank note in 1996. In comparison, the United States still issues a $2 bank note seldom seen in circulation. The metal content of the Canadian 5-cent coin has been altered several times, the most recent being a nickel-plated steel with copper version introduced in 2003.

Canada may be getting ready for the next step, possibly withdrawing the 5-cent coin due to a declining interest in its use by the public. In 2016 the Quebec-based credit union Desjardins conducted a study that suggested within five years the nation should switch to a mix of 10-, 20-, and 50-cent coins in circulation. (Canada currently has a 25-cent coin. Canada issued a 20-cent coin exclusively in 1858.)

At the time of the study Desjardins economist Hendrix Vachon wrote, “Due to the gradual increase in the cost of living and decreased buying power of small coins, the time will come when the nickel will have to be taken out of circulation.”

Vachon explained that with the 10-cent denomination becoming the lowest in circulation, a 25-cent denomination would no longer make sense. Vachon also suggested a circulating $5 coin rather than a bank note might be practical at some time into the future, however the study saw no reason to switch this denomination to a coin because of new, longer-lasting polymer bills being introduced.

“Eventually, the evolution of buying power could still justify changing to a $5 coin,” Vachon added. He also noted $50 and $100 notes “are likely little used to purchase goods and services and are more likely used for hoarding purposes.”

So far Vachon has not proved to be a numismatic Nostradamus, but it appears Canada may be moving closer to ending the circulation of its 5-cent coin denomination. On June 7, Research Company released a statement in which the company reported, “In the online survey of a representative national sample, 40 percent of Canadians support taking the nickel out of circulation, up four points since a similar Research Company poll conducted in November 2019.”

The statement continues, “Almost half of Canadians (49 percent, -6) oppose abolishing the 5-cent coin, while 11 percent (+2) are undecided. There is a substantial gender gap when Canadians think about the nickel. While 47 percent of men support its abolition, the proportion drops to 33 percent among women.”

The study reviewed the decision to withdraw the 1-cent coin. “More than seven-in-ten Canadians (71 percent, -4) agree with the federal government’s decision to take the penny out of circulation in February 2013. Male respondents are more likely to agree with dropping the 1-cent coin (77 percent) than their female counterparts (66 percent). The level of agreement with abolishing the penny is highest among Canadians aged 18-to-34 (74 percent), followed by those aged 55 and over (72 percent) and those aged 35-to-54 (65 percent).”

Research Company President Mario Canseco said the recent 2022 study results are based on an online study conducted from May 22 to May 24 using 1,000 adults in Canada. The data has been statistically weighted according to Canadian census figures for age, gender, and region. The margin of error is “+/- 3.1 percentage points, 19 times out of 20.”