About The Toronto Dollar

Excerpt from article from New Village.net (full article)

Community Currencies at a Crossroads
New Ways Forward

by Tim Cohen-Mitchell

Bringing Businesses, the Public, and Social Services Together

One of the limitations of HOURS and LETS, insofar as their economic impact and broader civic participation is concerned, is their exclusion of community members who do not offer goods and services for trade. In this, these systems more closely resemble the business-to-business nature of commercial barter associations (from which LETS, in fact, drew its inspiration). This point is significant because over 90 percent of Americans of working age are not business owners, but employees. Thus, the purchasing power of local consumers is more likely to be siphoned out of the community and into the external economy than it is to be spent and recycled within the local economy. But community currency organizers are beginning to address this problem while also putting local money to work in bolstering the non-profit service sector community economies.

The Toronto Dollar project , launched early in 1999 in the St. Lawrence neighborhood of Canada's commercial first city, is a promising example of meeting social needs while also promoting local business. According to its organizers, the project seeks to strengthen the neighborhood's identity and autonomy, promote local trade, and provide a locally generated source of funds for charitable organizations tackling poverty and homelessness.

The Toronto Dollar is modeled on the pioneering work of the E.F. Schumacher Society, which helped merchants in Great Barrington, Massachusetts, issue their own scrip ­ the "Berk-Share. Berk-Shares were sold to consumers at a discount through local banks and then spent at full value with local merchants, who later redeemed the notes for cash at the bank.

The Toronto Dollar project sells its notes to the public, but at face value. They are then spent with local merchants, who redeem them for federal notes at an exchange rate of 90¢ Canadian to one Toronto Dollar. The ten cent per dollar difference in the exchange rate is deposited into a savings account and distributed as grants to charitable organizations.

One of the system's organizers, John Flanders, reports that over 100 businesses are now participating, with more joining every week. "So far we have exchanged about 65,000 Toronto Dollars, and have been able to generate 10 percent of that for charitable community initiatives. The participation of the CIBC, a major Canadian bank, and Toronto's First Post Office as exchange bureaus has been "a huge endorsement for the Toronto Dollar project, Flanders says, "especially among those businesses that are on the brink of joining in.