Canada could soon have some of the highest-tech, most secure coins in the world, iPolitics has learned.

A change being proposed to Canada’s $1 and $2 coins would alter their composition and include several high-tech security features, such as a lasermark, a virtual image, an electromagnetic signal and edge lettering, making the already secure coins even more difficult to counterfeit.

“I would venture to say that our coins would be leaders in the field in terms of high technology and security features,” said Alex Reeves, spokesperson for the Royal Canadian Mint.

But while the move would save the federal government money, it risks initially being costly for some companies.

The government estimates introducing the new coins, which will be composed of multi-ply plated steel alloy rather than a nickel alloy, will save it $16 million on the 30 million coins it produces annually. However, the government says it will cost the vending machine industry $40 million to recalibrate its estimated 200,000 machines across the country to read the new, slightly lighter, coins.

The move could also affect small retailers who use weight-based coin sorting equipment as well as the parking, transit, casino gaming, retail and pay-telephone industries.

The cost to the nickel industry of selling less nickel for Canada’s coins will be offset by gains for the steel industry. In fact, the government says it is the high cost of nickel and the volatility of its price in recent years that has sparked the proposed move.

“The current one- and two-dollar Canadian coins are manufactured from nickel alloy, which in recent years, has experienced increased volatility in pricing, reaching record-high levels,” the government wrote in its proposal. “Over the last decade, the London Metal Exchange (LME) price for nickel has fluctuated over 1,000 per cent and is currently trading at nearly four times higher than it was in 2000.”

Canada has been phasing nickel out of coins for some time. The one, five, 10, 25 and 50 cent pieces produced in recent years have been of multi-ply plated steel alloy. To date, the move has saved the government an estimated $250 million.

What will make the new $1 and $2 coins unique, however, will be their security features, including new lasermark technology developed in Canada.

The $1 coin will continue to be yellow and, so it can easily be identified by the visually impaired, it will remain 11-sided. However, it would have an electromagnetic signal to discourage the use of counterfeit coins, or “slugs,” and a lasermark image will appear on the reverse.

The $2 coin will be even higher-tech. It will continue to be two colours, but will be thinner to accommodate lettering along the edge of the coin. It will have an electromagnetic signal and a lasermark, as well as a virtual image on the reverse.

Eventually, the mint plans to recover the existing nickel alloy coins as part of its Alloy Recovery Program and remove them from circulation.

While Reeves would not say when the new coins will be launched, the proposal says the mint hopes to start making the new coins in the last quarter of this year. It also plans to make samples of the new coins available to the industries most affected by the change six months before they are launched, so they can test and recalibrate equipment.

Reeves expects the new coins will also boost one of the mint’s other sources of revenue: making coins for other countries.

The mint has produced coins for more than 70 countries, including New Zealand, Panama, Paraguay and the United Arab Emirates.

“One of the advantages of developing these new security features is that they are highly marketable to other jurisdictions,” said Reeves.

But while the government says most stakeholders accept the proposed change, it acknowledged that the Worldwide Vending Association opposes using plated steel for higher-value coins because it is concerned that the availability of steel metal discs will make it easier to produce counterfeit coins. The government has been working with the association to try to address its concerns.

Members of the public and industry groups have 75 days to voice their opinions before the government makes a final decision.

elizabeththompson@ipolitics.ca