You may have heard the ads from the Canadian mint to sell $20 silver coins honouring Bugs Bunny.
But what better way to make money . . . than to make money?
That’s what sets the Canadian Mint apart from other federal institutions.
By law, the mint conducts its business “in anticipation of profit.”
Silver has been used in coins from the first drachma in Greece 3,000 years ago. Silver has hundreds of widely varied uses. It’s an antibiotic and antifungal that is used to defeat surgical infections - and smelly socks. This year, 100 million ounces of silver will be used to make solar panels.
The Bugs Bunny coin honours the 75th anniversary of the wabbit. This has important historical significance for the Canadian Mint because in 1940, Elmer Fudd – playing the part of a Mountie - tracked Bugs across “the frozen tundra” of Canada.
There are also complementary mint coins being offered this summer for Tweety Bird, Sylvester the Puddy Cat and Daffy Duck. Seriously.
That wascal Mike Duffy will not complete the set, a missed opportunity. Maybe a whole series on cartoon senators?
The first rule of collectables is that they don’t have to make any sense. Value is determined by the bank account of the beholder.
Example: a 1909 baseball card of Honus Wagner sold last year for $2.1 million.
The mint has produced 350,000 of the Bugs coins, with the queen on the reverse. The queen is probably not amused.
It’s the largest offering of any $20 coin; 100,000 more than the other such themed coins, including the 250,000 stamping of the Farewell to the Penny Silver Coin. There is no shortage of imagination at our mint.
The $20 Bugs coin is legal tender, although stores aren’t required to accept it. It’s illegal to melt down any Canadian coin, but there wouldn’t be any point with the Bugs coin.
The Bugs coin is advertised as 99.99 per cent fine silver. That may be a bit misleading. The coin weighs one-quarter of an ounce. With today’s price of about $19 for an ounce of pure silver, that means the silver in the $20 Bugs coin is worth about $4.75.
No wonder the mint makes a profit, about 400 per cent gross profit in this instance. And what other company can just melt down its unsold products and start over with no cost for new materials?
If a person wants to play this market for their own profit, it’s obviously best to buy bullion bars or silver account certificates with a bank.
In the first quarter of this year, the mint had total revenues of $640.1 million (about $2.6 billion annualized), although most of that comes from the sale of bullion and gold and silver receipts that trade on the Toronto Stock Exchange.
Canada’s mint also makes coins for 89 countries. If you go to Mexico this winter, that five peso coin was likely made in Canada.
The mint’s profit made on coins this year has declined. Remember its profit mandate? It was also making a profit on producing loonies and toonies made for the government until, in a rare moment of clarity in 2014, the Conservatives had a “what the hell?” moment.
Our mint can no longer profit on money made for our government, which owns our mint.
Times got even tougher for the mint last spring when executives and staff were exposed for tacking on a lot of fun time after conferences they were attending, spouses included.
(Yes, I know, all conferences are fun time too).
Following a get together last year in Mexico City, 11 mint staff and executives unwound from the conference ordeal at beach resort near Cancun for three days. The itinerary for the "post-conference tour" included a beach party, gala dinners and a trip to some Mayan ruins.
In previous years, personnel went on post-conference trips to Australia's Great Barrier Reef, a Thai beach resort and the Australian countryside.
The government was upset. With uncharacteristic speed for dealing with bureaucratic gluttony, a kibosh was put on expensing the after-conference tours.
Said Finance Minister Joe Oliver: “That’s all, folks!”
— Chuck Poulsen can be reached at firstname.lastname@example.org.