By Sarah B. Hood
Coin Toss
New loonies and toonies roll out smoothly
despite predictions of chaos
L
ast May, anyone reading Canadian media
reports would have been justified in
expecting confusion and mayhem at
parking facilities across the country –
not to mention vending machines and transit
terminals. “Recent changes to Canada’s currency
are wreaking havoc on the vending machine
industry,” trumpeted CBC News on May 23.
However, for most parking authorities, the April
10 release of new $1 and $2 coins by the Royal
Canadian Mint (RCM) was essentially business as
usual.
On May 3, CBC referred to the “commuter headache”
caused for commuters using TransLink ticket vending
machines in British Columbia, although (as the outlet further
reported) “B.C.’s transportation authority says it hopes to have
a solution by next week” and “customers have alternatives to using a
new coin in the vending machines, including using debit/credit cards,
purchasing FareSaver tickets and swapping a new coin for an old one”.
There were several reasons for the currency change, including the
risk of counterfeiting. Although some might think it unlikely, “over the
last three to five years, counterfeiting has started to be news for coins;
high-value coins tend to be counterfeited,” says Paul Lefebvre, Executive
Director of the RCM’s Canadian Circulation Business Line. “It’s a concern
worldwide when we go to various coin conferences in the world. We
don’t have a counterfeiting problem in Canada with our $1 and $2 coins,
but the Mint is in the forefront and we always want to be looking head
into the future, so the government thought it was time to address these
concerns and also to address the concerns of cost effectiveness.”
Lefebvre points out that coin counterfeiting can be a serious issue;
in the UK, he says, “For every ten coins, they find three of them are
counterfeit. That is the extreme, but it just goes to show how these
things can get out of control. We’ve been sampling now for several
years; the $2 Canadian coin is counterfeited, but the parts per million are
considered extremely low.”
The new coins have several security features, including a different
metal content, using a Multi-Ply Plated Steel technology that has
been used in the 5-cent, 10-cent, 25-cent and 50-cent coins since
2000. Originally covered by patent
protection (which has now
expired), the process layers other
metals (in this case, copper and
nickel) over a steel core. It would
be potentially possible, but very
challenging, for a would-be
counterfeiter to reproduce the
process.
The new coins are more
durable and cost less to produce.
Furthermore,
says
Lefebvre,
“the supply of that metal is widely
available, and that’s not the case with
alloys. For governments, [metal shortage]
is not a good thing in terms of stabilizing your
costs.” Besides the metal content, the new $1 coins
are micro-engraved with a laser mark of a maple leaf in a circle on the
side with the loon image. The $2 coins have two similar laser marks on
the side showing the polar bear design.
The changes have been in the works for some time. “There was a
budget announcement in March of 2010,” says Lefebvre. “That was
when the government announced its intention to make the change.
Subsequent to that we had had consultations with transit, parking and
telephone authorities and the like.” In January 2012, the Canada Gazette
estimated it would cost about $40 million to upgrade coin-operated
equipment in all the Canadian industries that use it; the expectation was
that the new coins would also save the country $16 million.
For many parking authorities, the transition was seamless. For others,
the process of switching to the new coins is still not complete, in part
because several parties must be involved in the process. In some cases,
says Canadian Parking Association (CPA) Executive Director Carole
Whitehorne, “we’re relying on equipment that’s three parties away to
test the coins to make sure the readers are going to work, and then they
need to get back to the suppliers, who come back to us.” But in most
situations, “when third-party influences affect our industry, we’re ready
to deal with it. The members of the Canadian parking industry respond
well to these types of thing.”
This article was published in the 2nd Quarter 2012 issue of the Canadian Parking Association’s industry magazine - The Parker.
For more information on the Canadian Parking Association, visit www.canadianparking.ca
“Our industry’s goal is to achieve a high level
of customer service,” says Carole Whitehorne.
“We’re doing the best we can to deal with outside
influences that we have little control over.”
Although
some media
in
Toronto
(the
largest
operation
in
North America,
with
3,000
machines) suggested
motorists would have
problems paying for parking
when the new coins were released
“There’s no negative side to this,” says CPA President Gwyn Thomas,
President of Toronto Parking Authority. “Aside from having to reprogram
all the equipment, the new coins work fine. They’re a little bit thinner, but
our equipment detects the coin on its metal content.”
Thomas estimates the Toronto Parking Authority can reprogram
about 300 machines per week. “It’s a lot of work,” he says “It’s a $350 job
per machine; that’s not a big amount of money, but multiplied by 3,000,
the number gets big real fast.” However, he adds, “Our budget is just
over $1 million, and our gross revenues are about $150 million a year,”
so these are costs that can be absorbed.
Ironically, Sudbury, the municipality that was first in the country to
install parking metres back in 1940, was using such dated equipment
that many of the city’s 450 metres had to be replaced. “With our newer
models, we were able to use the dapper and update them, but we had to
replace about 300 metres on the street,” says Gloria Kindrat, Supervisor
of Parking for the Greater City of Sudbury.
“We were coming in to a price increase on March 1, so we knew
we had to update our metres anyway, and we had just gone through
approval to change all the metres over to a two-hour maximum, so we
decided to do it all at once,” she says. “We were done on the street about
March 13, well ahead of the new coin.”
One location that has encountered difficulties is Fredericton, but the
parking authority has managed to nip most of the potential problems in
the bud. The city’s 600 metres were converted within two days. However,
there’s a delay with 20 pay stations in parking garages and surface lots,
and local media leapt on the story.
“The manufacturers gave us one service notice at the end of March
saying they were still working on a solution; here it is, May 28, and we
haven’t had any other communiqué from them,” says Janice Legace,
Parking Service Manager for the City of Fredericton. However, the
machines do take credit cards, $5 and $10 bills, old coins and a city token.
“We’ve posted notices on the machines and provided our staff with
pocketfuls of tokens so they can exchange with our customers,” says
Legace. “The chances they have no other money in their pocket is very
slim to none, but in that very rare case we have our staff out there. Last
week we found 10 loonies and ten twoonies, and that’s all.” Although it
may take some time before the machines are converted, the new coins
are “trickling very slowly, and it’s not like people will have no other coin.”
Similarly, in British Columbia, where media sounded the alarm about
coin-operated machines on ferries, “We have all the parking equipment
on the B.C. ferry sites finished; all the new software has been upgraded,
says Gerald Tottman, a consultant with Parking Development Group.
“Quite a few companies weren’t as proactive, so there is still some
equipment that is not upgraded at this point in time.”
“This is a tempest in a teapot,” says John Lovell, President and CEO
of Zeag Canada Ltd. “The Mint is always issuing new coins. The coin
processing manufacturers were a little bit challenged in getting the
software right, and there were some questions about the metallic
consistency, and I think some in the media jumped on the fact that in the
larger cities some of the machines on the street were not ready for the
new coins. They didn’t take into account the logistics behind upgrading
the equipment.”
“Everything went according to the processes that the Royal Canadian
Mint has in place,” says Jim Taylor, Business Development Manager with
MacKay Meters. “The Mint is extremely organized and punctual – great
to work with; we knew about two-and-a-half years ahead. When they
were available, we paid a deposit and they presented us with coins.
We’ve got more point-of-service devices out there than most people
because they’re single-space metres, but we’ve deployed it in probably
85% of our locations across the country. It took three minutes or less to
reprogram each of those.”
“Our industry’s goal is to achieve a high level of customer service,”
says Carole Whitehorne. “We’re doing the best we can to deal with
outside influences that we have little control over.”
“Life will go on, and in a few months there won’t even be a
conversation about the new $1 and $2 coins,” says Lovell. “We’re seeing
that cash is very much in the minority versus credit or debit cards. That
really is where our company and I think our industry is focusing.” n
This article was published in the 2nd Quarter 2012 issue of the Canadian Parking Association’s industry magazine - The Parker.
For more information on the Canadian Parking Association, visit www.canadianparking.ca