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Great Canadian Innovations

Canada’s Mint condition

Focusing on innovation in the creation of currency, the Royal Canadian Mint aims to give foreign producers a run for their money

An employee reaches into a drum of rejected nickel plated blanks roll along a conveyor belt at the Royal Canadian Mint in Winnipeg Tuesday, April 4, 2017.

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Deep inside a Winnipeg factory, past the pumping presses, past the gurgling acid baths and past the tumbling vats of corn-cob grit, there’s a room where the Royal Canadian Mint is crafting its latest weapon in the global race to make money.

The two-tone toonies are different in this chamber than the ones you probably have in your pocket. The Queen is still there, of course, but the polar bear’s scampered off the other side. Instead, the brass core depicts a quiet night in a boreal forest, two paddlers steering their canoe under a sky awash in northern lights.

It’s the next bit that’s got the Mint excited.

Two dollar coins are tested before being painted with glow in the dark paint at the Royal Canadian Mint in Winnipeg Tuesday, April 4, 2017.

The freshly painted two dollar glow in the dark coin is inspected by production operator Rene Tetrault at the Royal Canadian Mint in Winnipeg Tuesday, April 4, 2017.

Robotic arms pluck the toonies off a conveyor belt, orient them just so, and then it’s stamp-stamp-stamp-stamp-stamp as little pink marshmallows dab five layers of paint to each coin. The pièce de résistance: each toonie’s aurora borealis now glows in the dark.

It’s the first time the Mint has added fluorescence to a circulation coin – they estimate about one in 10 Canadians will hold one of these when they’re out in the wild – and, believe it or not, it’s the institution’s latest innovation in a global chase for security, durability and profit.

The Royal Canadian Mint in Winnipeg. The Mint in Winnipeg is responsible for the production of all Canadian coins that are put into circulation.

The Royal Canadian Mint was founded in 1908, first as a branch of Britain’s Royal Mint focused on refining the gold coming out of the West. As operations expanded over the years, the Mint outgrew its Ottawa plant and, in 1976, opened a second production facility in Winnipeg. Now the Ottawa plant focuses on specialty coins and bullion products, while the Winnipeg factory churns out up to 20 million coins a day for circulation.

Brad Everton, Winnipeg’s senior manager of applied research, started in 2000, the year the Mint rolled out one of its most important innovations: multiply plating. Instead of making nickels out of pure, well, nickel, the five-cent pieces are made of mostly steel with very thin alternating coats of nickel and copper. Steel is cheaper, which takes some pressure off of taxpayers, and the special arrangement of metals creates a unique electromagnetic signature that is harder for counterfeiters to fake.

“We have to keep being efficient, we have to keep competing and we have to keep looking for new ways to make coins more secure,” Mr. Everton said.

The technological innovations also help the Mint make money (as a business) by producing coins for foreign countries. That business line is competitive, with thin profit margins, but offering features such as enhanced security or glow-in-the-dark paint help the Canadian Mint differentiate itself from its global rivals, such as the British Mint.

Foreign currency production was worth $63.1-million to the Mint in 2016, an average year for a business line that has proven volatile – dipping as low as $25-million and as high as $115-million in the past decade.

Rolls of steel sit on the factory floor and it is expected to make about 300,000- 400,000 nickels from each roll at the Royal Canadian Mint in Winnipeg Tuesday, April 4, 2017.

The Mint celebrates its foreign clients with dozens of flags that line the drive on the way into the Winnipeg plant. On a recent visit to the factory, wooden crates filled with Madagascar ariaries were stacked in a loading bay out back, awaiting their eventual journey across the ocean in a cargo ship. Foreign clients include Indonesia, the United Arab Emirates and Jamaica, as well as dozens of others The Globe and Mail was asked not to make public because, in some instances, the citizens of those countries don’t know where their own coins come from.

Sandra Hanington, master of the Mint, says the Crown corporation has a roving band of salespeople who travel and build business relationships with foreign clients around the world.

“It starts way at the beginning when [foreign banks] have got a twinkle in their eye about producing a coin or … changing the way their coins are made,” Ms. Hanington said.

“It gives us an opportunity to persuade them that the way we make coins is the way that they should be issuing their [specifications] for the tender. So there’s an influence process.”

But as the Mint continues working on new technologies, it’s had to innovate as an institution – and that journey hasn’t always been smooth.

In 2009, the Mint tried to get into the digital payment game by creating the MintChip platform. Canadians, after all, have been slowly moving from physical methods of payment to electronic ones. But they sold the property seven years later to a Toronto startup in order to focus on the core business of coining.

Around the same time, the Mint’s board approved a $62-million expansion of its Winnipeg plant to increase its capacity to produce foreign coins and to establish a research-and-development “centre of excellence.” Just a few years later, in 2015, the board decided it wouldn’t make the money back from that investment and wrote down the cost on its books – leading to a rare operating loss on the year.

Blanks enter an oven to heated to 800 degree celsius to anneal the metal at the Royal Canadian Mint in Winnipeg Tuesday, April 4, 2017.

Still, with change can come opportunity. The former Conservative government eliminated the penny from Canada’s coinage in 2012, which took customers, retailers and bankers some time to adapt. An internal Finance Department report from 2015 obtained by The Globe shows the government has considered eliminating the nickel, too.

The Mint has since recovered 6.3 billion pennies from circulation, sold them for scrap metal and sent the proceeds to government coffers, according to its most recent annual report.

And Ms. Hanington, the Mint president, says there’s been an upside for their foreign clients now that Canada no longer coins the penny: there’s more space on the production lines for them.

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