Apparently, the United States is not the only country with a cost problem of its lowest denomination coin. In Canada, the press obtained notes from meetings with the Bank of Canada under the Access to Information Act (a similar law to the US Freedom of Information Act) that shows the Canadian cent costs more than one-cent to produce.
The Canadian cent weighs 2.35 grams and is made from .940 steel, .045 copper, and .015 nickel whose costs are subject to market conditions as any other item made from metals. As the economy changes, not only do the costs of materials change, but the costs of doing business changes. While the Royal Canadian Mint has said that the cent costs .008 to produce, reports based on the newly released documents show that the claim is based on the cost of metals and not production costs.
Accounting for labor and transportation costs from December, 2007, when the report was written, it is estimated that the Canadian cent costs an estimated 1.5-cents to produce. Some Canadian politicians are up in arms over the costs and want to “do something” about this without considering that seignorage from other coins more than covers the cost.
It is interesting to hear that other countries are having the same problems as we are here in the United States.