Sunday July 20, 1993
WHEN MONEY IS TIGHT, TRADING GOODS AND SERVICES IS ONE WAY TO BOOST THE
THEY PLAN TO CREATE JOBS USING BARTERED TIME
Back when times were good, Doug Brennner
couldn't have told you the
difference between a GreenDollar and a loonie. That's because Brenner
had lots and lots of loonies: In 1989, he sold $2.8 million in Ralph
Lauren Polo pants, GUESS shirts, Ocean Pacific bathing suits and what
he calls 'Yuppie-brand-name clothes." His personal income from his
nine retail clothing stores, some with catchy names like
The Boomer Club, was more than $100,000 that year.
But when the recession hit, clothing sales dropped. His business went
into bankruptcy in 1991, throwing 50 staffers into unemployment and
forcing Brenner to begin looking for a way out of the proverbial hole.
It was at a support group for the unemployed earlier this year that he
heard about the GreenDollar system, a form of barter which some see as
an innovative economic shot in Toronto Local Employment and Trading
System, or LETS system. However, GreenDollar systems or LETSystems are
better known in Australia, New Zealand and England.
And they really aren't so new. Toronto author Jane Jacobs, an expert
on the economic role of cities, terms them the most ancient form of
"Money is very convenient," she says. "But when there is not enough
money - as there is in a recession - barter, or local trading with
some kind of local currency or accounting system in place, gets people
using their skills . . . It encourages them to develop new skills. It
also fosters honesty and it brings people in a com-munity together,
neighbors get to know each other. It's a kind of homemade safety net."
One of the founders of the Toronto LETSystem, Dr. David Burman, sees a
connection between it and improved public health.
"It helps create an environment in which people can be well," says
Burman, who has a Ph.D. in community health and is also a Metro
"We've seen the connection between unemployment and heart disease;
we've seen the connection between unemployment and violence. This
helps get people out of that cycle," he says, adding that the system
has the "potential to change the social environment from one of
scarcity in which people are always looking over their shoulders to
one of abundance where people feel like giving.
The Toronto system started three years.. ago with five people. Today,
it has 325 members who exchange among themselves using computer
credits called GreenDollars.
Those using the system can receive real dollars plus Green ones, which
they usually do because taxes are paid just as if one is using real
money. Some transactions may be paid for entirely in green. But again,
according to Revenue Canada, income generated in Greendollars is
taxable if it is earned as part of your usual profession.
"The beauty of this is that people don't have to have any GreenDollars
when they join ... they create GreenDollars themselves by spending
them," says Sat Khalsa, administrator of LETS in Toronto.
"I've been able to go to a chiropractor and have massages," says
Burman who in turn accepts 25 per cent of his fee for dental work in
GreenDollars. Rev. Lindsay King of Willowdale United Church, another
member of the system, recently had a deck built using GreenDollars.
He, in turn, offers counselling.
One can also get a haircut, have the house cleaned, take saxophone
lessons; there is even a a room for rent, $65 pet week - 50 percent
Green - on the LETS Notice board, a list of goods and services, which
every member receives monthly.
Doug Coyle, Ontario director of the GreenDollar system, sees the
concept as similar to that of Canadian Tire offering Canadian Tire
Money to encourage customers to spend at its stores.
A lot of businesses are offering such incentives," he says. Ours is a
kind of community currency, it doesn't go away. It stays in the
community to keep people working.
There is nothing but positive that can come of it says Jacobs.
But she says governments sometimes are reluctant to endorse the system
because it's feared they miss out on local taxes.
"However, what governments fail to see is that the system teaches
people to act on their own behalf and may ultimately help them to
depend less on the government welfare or other types of financial
About the only thing that can go wrong with a LETSystem is that people
stop participating and the system shuts down. That's what happened
with Canada's first LETSystem which British-born Michael Linton formed
on Vancouver Island in 1983.
Linton, who came to Canada in 1975 worked as a physical therapist
until the early 1980s when the recession hit. Faced with unemployment,
Linton recalled a lecture he had attended many years earlier at
Cambridge University in England.
The speaker had talked about how illogical it was for people to be out
of work during recessions because even in tough times, there are
people with skills. There is work to be done. The only obstacle is a
lack of cash.
In other societies, if a road needed to be built and there were
skilled people, they didn't stand around lamenting the lack of money.
They simply got together and built the road. This kind of reasoning
made sense to Linton and to the approximately 700 people who joined
that system over the next three years and ultimately traded $300,000
in goods and services.
"The recession was what got it going," says Linton's wife Shirley. But
by 1986, when it ceased to function, there was enough real currency
around so that people didn't have the incentive to use the system.
"It's a confidence situation," she says. "People really have to be
willing to network to make it work."
Shirley Wade Linton recently started a new LETSystem for women in her
community. Her husband, meanwhile, is in Australia, on a trip paid for
by the Western Australian government, helping l communities establish
The Australian and New Zealand governments have each given some
$50,000 to local communities to begin and promote LETSystems.
In Michigan, Missouri and Florida, state governments are also funding
local Time Dollar systems (similar to the LETSystems), says Khalsa.
Unfortunately, Canadian LETS organizers have not enjoyed the same
success with our governments.
"The government is so obsessed with big issues the overlook small
things like LETSystems," says Khalsa. "There are lingering doubts in
people's minds .... people think this is so great the government is
going to crack down and put a stop to this."
Khalsa says that while Revenue Canada is quite clear on what taxes one
must pay in the system, LETS organizers have no clear idea about what
happens to someone receiving unemployment insurance who earns
GreenDollars. Does one declare them just as one does real currency?
An official with Employment and Immigration Canada told The Star
anyone receiving unemployment insurance benefits would indeed have to
report GreenDollars as income.
"Despite much concerted effort, .. (from LETS organizers in Ontario,
Manitoba and Saskatchewan) we haven't been able to get this resolved
and we haven't been able to get governments to support us," says
Official support would help bring more people into the LETSystem, said
Brenner, who is trying to get backing from the town of Newmarket and
its chamber of commerce.
Although Newmarket Mayor Ray Twinney has given the system his
tentative approval, he says he is waiting for a recommendation from
the chamber before officially endorsing it.
The chamber, which represents 400 small businesses, meanwhile, has set
up a subcommittee to study the issue and is expected to make
recommendations to its membership at a meeting late next month.
Newmarket (pop. 48,000) is feeling the effects of the recession just
as many other towns are, says Brenner who closed three of his stores
in the Upper Canada Mall, the town's largest commercial centre. "Those
stores are still empty today," he says. "Business is slow here."
A lot of Newmarket people work in Toronto and also send their money in
Toronto, all of which hurts Newmarket business, says Brenner. But the
GreenDollar System has the potential to turn that around.
"We're not trying to replace Canadian currency; rather, we're looking
at helping ourselves and helping the local economy," says Brenner.
"People would trade with local people; these GreenDollars can't be
used in Toronto or anywhere else and that helps people here."
Meanwhile Gail Vaughan of the Newmarket office of the Canadian Mental
Health Association says the system has the potential to counteract
some of the "feelings of hopelessness, " in the community,
She's seen the effectiveness of such a system in Spring, Texas, a
bedroom community near Houston, where she, her husband and three
children lived between '79 and'83.
"It was similar to the Newmarket-Toronto situation," she says. "There
was a terrible number of empty stores. It was very hard for small
businesses to compete so close to a major city."
To protect and encourage the local Spring economy, local people
started TRADELINE, which functioned similarly to the GreenDollar
"We knew we might get something cheaper in Houston, but instead of
going there we use TRADELINE," says Vaughan. "It was great. My husband
was able to get a crown for his tooth. We could go out to restaurants,
we had our dryer fixed. We bought a stereo, TV, jewelry and drugstore
items . . . there was no end to what we could do. . . ."
In return, Vaughan's husband did autobody work. She made crafts. When
the Newmarket system gets going, she figures she could do newsletters.
"For young people, It's especially hard not to feel hopeless," she
says. "This encourages people to become entrepreneurs. It gives people
some incentive, some hope that they can do something."
a comment to John Turmel