Local economy need a boost? Start your own currency

Salt Spring Island has plenty to distinguish it: natural beauty, a thriving arts scene, a funky local history. and, for 15 years, the tiny British Columbian island has had its own currency.

And before you write it off as being some West coast hippie idea, Michael Gallant argues the hyper-local currency is evidence of the community's strong social fabric. 

The economy is a very social system and supporting our neighbours and fellow human beings - which works on a smaller island especially,- Michael Gallant

The president of the Salt Spring Island Monetary Foundation says Salt Spring Dollars are meant to keep money in the local economy.

The bills are printed in denominations of $1 to $100, are accepted at par with Canadian currency, can be purchased online, or withdrawn from an automated machine using a credit card.

Salt Spring Dollars create a "hot potato" effect in the local economy, he explained, because people cannot bank the money for interest or spend it off-island.

"Community currencies have been shown to actually, when they are working properly, do more economic work then national dollars, that is they circulate more times and faster," says Gallant, "they are going to be less conservative with it, they are going to be a bit more free."

There's a charitable effect too. The money can be redeemed for Canadian dollars, less a five per cent fee that is donated to an island charity of the redeemer's choice.

And when tourists leave without redeeming their Salt Spring Dollars, the local economy profits. (Think about who benefits from unused gift cards)

According to Gallant, people who use the currency buck the global trend to source goods on the open market at the lowest price.

"It's really a big education to get people to buy local because typically buying local costs more," he says.

"You're taking your global currency...and you're converting it into a local currency, so in a way it's a voluntary reduction of global purchasing power and by doing that you are really just making a statement that [you] support local." 

And Gallant says Islanders are insulated against international market uncertainty. 

"We do have a secret location with quite a value of dollar bills printed up just in the event of a global economic crash."