Canadian mint claims copyright over pictures of pennies

The Canadian mint sent a legal threat to a folk-singer called Dave Gunning, objecting to his use of photos of pennies in the liner notes on his latest CD, No More Pennies, which eulogizes the Canadian one-cent piece, now discontinued.
My friends in the commonwealth sometimes don't understand what the practical difference is between "Crown copyright" (where the government holds a copyright to the works it creates at taxpayers' expense) and the US system, where government works automatically enter the public domain. But here it is: the right of Canadian artists to create art about the decisions of the Canadian government is contingent on the government's permission -- and is subject to an arbitrary fee levied by the state.
After a good deal of public embarrassment, the mint backed down, but it continues to assert that it holds a copyright in the image of Canadian currency.
On the other hand, if Mr Gunning wants to reissue his CD jacket with pictures of American pennies, he'll be on safe ground.
The Globe and Mail's Brad Wheeler describes Gunning's answer to the mint:

After an initial run of 2000 albums had already been produced, Gunning was notified that he’d need to to pay $1,200 for the rights to the penny image. After Gunning spoke to CBC Radio One’s Mainstreet Halifax about the fee and a “penny drive” to cover the costs, the Mint waived the royalty.
The ubiquitous currency will no longer be circulated in Canada as of Feb. 4, 2013. No More Pennies, Gunning’s 10th album, is, in his words, a “heartfelt tribute to the passing of the penny.” The vanishing of the loosest of loose change is a metaphor for the passing of time.
Although the copyright fee for the album’s initial run of 2,000 albums was waived, the Mint has conditions tied to any future copies of the CD. Gunning has made the requested alterations to the original design and has resubmitted his application for permission to use the one-cent likenesses. The Mint will now decide on what amount, if any, it will charge the musician. “We’re not preventing Dave Gunning from commemorating the penny through his album,” says Christine Aquino, the Mint’s communications director. “The issue is the use of the image, and we’ll be working with him on that.”

Canadian folk singer fighting with the Mint over pennies