In my last platform I spoke of a public bank for Toronto, which comes with many complications. However with the advent of digital currencies, we can avoid the complications with creating a bank that must be incorporated into our monetary system.
Because we cannot rely on senior levels of government for reliable funding, especially for the various social programs needed so more people do not fall through the cracks, Toronto should have its own currency.
A digital currency
With the advent of digital currencies this is much easier than it sounds at first. Toronto can generate as much of a TO dollar as it needs, and it will be controlled as all digital currencies are, through a blockchain maintained by the city.
There are limitations to its uses, we will never be able to pay for infrastructure, or build housing, or import food with a TO dollar, because all those things come from outside Toronto and require CAD. However, it can easily be used for employment, like a youth job guarantee. If such a pilot proves successful, it can be expanded to fund a job guarantee for anyone who is unemployed or underemployed.
Acceptance
The problem with other local currencies, like when a BIA has tried to have its own dollars to spend at local businesses, is that there is no incentive for businesses to accept it. The businesses themselves cannot use it to buy their own goods or pay wages, and most importantly they cannot pay their taxes with it. This is where a TO dollar will be different.
Paying property taxes
When a youth finishes their summer job with the city they will have a digital wallet full of TO dollars they can spend at any retailer in the city. The incentive for retailers is they can pay their property taxes with a TO dollar, and will be gifted an extra 1% for every TO dollar they pay their property taxes with. No retailer is going to turn down an extra 1% off a portion of their property taxes. Retailers might even be incentivized to offer consumers a 0.5% bonus for spending TO dollars, so they can collect even more and still get a 0.5% bonus come tax time.
Exchanging for CAD
Conversely, if that youth finishes their summer job and wants to cash out their TO dollars to go camping up north they can totally do so, but at a 1% penalty. Putting a 1% bonus on paying property taxes with TO dollars and 1% penalty for cashing out TO dollars ensures the majority will be spent in Toronto, circulating in the local economy and generating new economic activity and spending.
Preventing misuse
It is easy with a digital currency to prevent any unscrupulous activity because you can make the currency non-transferable. All a person can do is earn the TO dollars, spend them, businesses can pay their rent with them, and land owners can pay their taxes with them. But you will not be able to give them to another person or pay people to exchange them. If you have earned them you can only spend them or cash them out with the city.
With an over $11 billion yearly operating budget Toronto has plenty of fiscal room for such a program without causing any ill effects, like inflation or boycotts. Starting small with a youth jobs program also makes it manageable and measurable.
The primary thing that makes a currency viable is if it can be used to pay a tax liability. With the city itself generating the currency, disseminating the currency, and collecting it as taxes, it creates a closed loop that will give Toronto more influence to aid the local economy.