What is the Toronto Dollar
The Toronto dollar was a local currency used in certain areas of Canada's largest city, mostly at small businesses in the St. Lawrence Market and in the Gerrard Street east neighborhood. Local stores accepted Toronto dollars as part of an initiative to encourage consumers to shop locally and help fund needed community programs.
A paper currency, designated local outlets made the dollars available, and consumers could spend them with any local merchant that accepted them. The bills can in four denominations: one, five, 10 and 20 dollars.
BREAKING DOWN Toronto Dollar
A Toronto dollar maintained a one-to-one parity with a Canadian dollar, with a fixed exchange rate. Toronto dollars benefited local businesses. Whenever consumers exchanged Canadian dollars for their Toronto counterpart, 10 cents of each Canadian dollar supported local community organizations.
The other 90 cents, meanwhile, added to a reserve fund that existed to support redemptions of Toronto dollars. So while consumers received one Toronto dollar for every Canadian dollar they exchanged, businesses only received 90 cents for every Toronto dollar they redeemed. However, the larger community benefited from 10 percent of proceeds from the exchange.
The Toronto dollar began in 1998 as a way to help fund social programs in the city. Not-for-profit community groups administered the program and, within the next decade or so nearly 150 different organizations accepted the currency.
By 2013, however, the city abandoned the project, with its administrator, Toronto Dollar Community Projects, citing a lack of infrastructure enabling easy exchange and too few volunteers supporting the initiative.
Toronto Dollar in Circulation and Decline
Even five years before the innovative currency project retired for good, the venture ran into challenges. A 2008 Toronto Star article, titled "Decline of the Toronto Dollar" offered a glimpse at a transaction using the community currency.
While it noted that $94,000 had been raised for community groups over the first decade of the initiative, use of the currency declined in 2008, raising barely $4,000 for charity, suggesting the initiative was losing steam.
It described a young cashier "flummoxed" by a customer's request for Toronto Dollars in change, and noted that the store only had a few left in the till. "Once they're sold, we're not getting anymore," the cashier said.
The article said the dollars, which were blue $10 bills and bright pink five-notes, would help fund charity organizations, "a way to add virtue to a vice." But the bills just weren't gaining currency, so to speak. As the manager of St. Lawrence Market said: "It hasn't worked like we would have liked.'"